Census Bureau: Poverty Rate Down, Median Incomes Up
- Author: Anthony Vega Sep 14, 2016,
Sep 14, 2016, 1:58
Last year's surge was the first statistically significant annual rise in median household income since 2007. The latest yearly increase occurred in 2007, before the housing bust and financial crisis put us all through an economic thresher.
Black households increased by 4.1%.
About 43 million Americans still lived in poverty in 2015, but the report notes that that's about 3.5 million fewer people than in 2014.
The proportion of Americans in poverty also fell sharply a year ago, to 13.5 per cent from almost 14.8 per cent.
The early years of the recovery were driven primarily by relaxed monetary policy and a booming stock market - things that drove financial gains nearly entirely to big businesses and wealthy Americans. Incomes also increased for immigrants as well as women and men that work full-time.
"This shows the importance of robust labor markets", Jared Bernstein, a former top economic adviser to Vice President Joseph R. Biden Jr., told The New York Times. That said, these new data offer a strong indication, and some useful context, on how American families are really doing.
The lowest poverty rate is among senior citizens, in large part because of Social Security.
Concerns about income growth have hung over the USA presidential election, with many Americans expressing dissatisfaction with an economy that has managed only a sluggish expansion since the 2007-2009 recession.
Income stagnation had become a hallmark of the post-recession years, hobbling families who were facing higher expenses for everything from education to housing while their earnings went sideways. However, accounting for inflation, 2015 median household income is about 2.4% lower than the median household income peak from 1999.
"We're digging ourselves out of a pretty deep hole", said Dr. Mishel. While good news at last, it remains to be seen whether the economy can deliver additional years of household income growth.
Taking such programs into account, the Census Bureau put the 2015 so-called supplemental USA poverty rate at 14.3 per cent, one percentage point lower than in 2014. Tom Hirschl, sociologist and co-author of "Chasing the American Dream: Understanding What Shapes Our Fortunes", says the problem with these estimates is that they only provide a snapshot of who is poor in any given year, and not over the long term.
Noncitizens, who tend to earn less and have higher workforce participation rates than native-born workers, saw some of the largest increases in incomes previous year. White households saw a 4.4 percent increase to $62,950, while Hispanic homes benefited from a 6.1 percent jump to $45,148.
Tuesday's numbers hint at how both sustained declines in unemployment and minimum-wage increases by states and local governments in recent years are lifting household incomes.