Subscribe to INT Podcast
|November 21, 2017|
Middle-class income hit highest level on record in 2016
America's middle class had its highest-earning year ever in 2016, the U.S. Census Bureau reported Tuesday.
Median household income in America was $59,039 last year, surpassing the previous record of $58,655 set in 1999, the Census Bureau said. The figure is adjusted for inflation and is one of the most closely watched indicators of how the middle class is faring financially, as the Census surveys nearly 100,000 homes.
The real median income of non-Hispanic White, Black, and Hispanic-origin households increased 2.0 percent, 5.7 percent, and 4.3 percent, respectively, between 2015 and 2016. This is the second annual increase in median household income for non-Hispanic White, Black and Hispanic-origin households.
For Asian households, the 2015 to 2016 percentage change in real median income was not statistically significant. (The differences between the 2015-2016 percentage changes in median income for non-Hispanic White, Black, Hispanic, and Asian households were not statistically significant.)
The Census said the uptick in earnings occurred because so many people found full-time jobs, or better-paying jobs, last year.
America's poverty rate fell to 12.7 percent, the lowest since 2007, the year before the financial crisis hit. The percent of Americans without health insurance for the entire year also dropped in 2016 to just 8.8 percent, the lowest ever, largely thanks to expanding coverage under the Affordable Care Act.
"Today’s Census report is unambiguously good news: On income, on poverty and on health insurance," said Bob Greenstein, founder and president of the Center on Budget and Policy Priorities, a left-leaning think tank.
Economists hailed the news as evidence the recovery is finally taking hold after years of frustration for the middle class, which watched the stock market soar while the average American's income barely budged. Donald Trump tapped into this anger in the 2016 campaign, often saying people were no better off economically than they were in 2000.
Almost everyone saw an increase in income last year, Census officials said. They cautioned, however, that the Census changed its methodology in 2014, so they are hesitant to definitively say it's the highest median income ever. Still, they touted the strong gains in the past two years as "significant." Incomes rose the most from 2014 to 2016 of any two-year period since the 1960s, CBPP found.
"This is a really great report card on what the Obama administration accomplished," says Peter Atwater, president of Financial Insyghts.
The challenge for Trump is to make sure incomes keeping going up and poverty keeps going down during his tenure. "We don't want this to be as good as it gets," Atwater said.
Inequality is still vast in America, with big disparities by race and class. Median income for African-American households was only $39,490 last year, far lower than $65,041 for whites. Asians fared the best, earning $81,431. The rich also continue to get wealthier, while the nation's poorest families -- the bottom 20 percent who earn $24,000 or less -- remain worse off financially than they were in 1999.
"It's welcome news, but we're not popping champagne corks yet," said economist Elise Gould of the left-leaning Economic Policy Institute. She believes "we need a few more years of gains" to really say the average American is getting ahead. (Source: The Washington Post)
Story Date: September 13, 2017