Dear Commons Community,
The Census Bureau reported on Tuesday that the median household’s income in 2015 was $56,500, up 5.2 percent from the previous year — the largest single-year increase since record-keeping began in 1967. As reported in the New York Times:
Americans last year reaped the largest economic gains in nearly a generation as poverty fell, health insurance coverage spread and incomes rose sharply for households on every rung of the economic ladder, ending years of stagnation.… The share of Americans living in poverty also posted the sharpest decline in decades.
The gains were an important milestone for the economic expansion that began in 2009. For the first time in recent years, the benefits of renewed prosperity are spreading broadly.
The data was released into a heated presidential race, where Democrats seized on the statistics to promote Hillary Clinton’s candidacy and undercut Donald J. Trump’s dark assessment of the nation’s well-being.
“It has been a long slog from the depths of the Great Recession, but things are finally starting to improve for many American households,” said Chris G. Christopher Jr., director of consumer economics at IHS Global Insight. He said the gains had continued this year.
The economic recovery, however, remains incomplete. The median household income was still 1.6 percent lower than in 2007, adjusting for inflation. It also remained 2.4 percent lower than the peak reached during the boom of the late 1990s. The number of people living in poverty also remained elevated, although it shrank last year by about 3.5 million, or roughly 8 percent.
Mark R. Rank, a professor of social welfare at Washington University in St. Louis, said the new data “is obviously good news.” But he noted that poverty and income inequality in the United States remained more extreme than in most developed countries. “It would take a lot to move that needle,” he said.
The Census Bureau also reported that the share of Americans with health insurance continued to increase. It said that only 9.1 percent of the population had no health insurance last year.”
However, before we all jump for joy, another sort Times piece this morning paints a more modest enthusiasm for the Census Bureau’s report.
“While the economy finally is moving in the right direction, the real incomes of most American households still are smaller than in the late 1990s. And large swaths of the country — rural America, industrial centers in the Rust Belt and Appalachia — are lagging behind.
“We ain’t feeling too much of all that economic growth that I heard was going on, patting themselves on the back,” said Ralph Kingan, the mayor of Wright, Wyo. “It ain’t out in the West.”
That bleak reality helps to explain why the good news the Census Bureau issued Tuesday about a rise in household income was greeted gleefully by economists but is unlikely to change the complexion of the presidential race.
The recent upswing is real. While economic growth has been modest, the expansion is now in its eighth year. The economy has added millions of jobs and incomes increased last year for households on every rung of the economic ladder. The economic gains have been particularly strong for people who live in the nation’s large metropolitan areas and for those who have college degrees.”
Overall I take the above to indicate that the economy is moving in the right direction but that more needs to be done especially among non-college graduates and those living outside major metropolitan areas.