Median Incomes Climbing for First Time Since 2007
After a lost decade, Americans finally have begun making real gains, according to a report released Tuesday by the U.S. Census Bureau.
The agency released data on income, poverty, and health insurance for 2016. The highlights include:
Last year, the Census Bureau reported that the median household income rose 5.2 percent between 2014 and 2015, the first gains since 2007. The financial collapse the following year triggered the Great Recession, the effects of which lingered for most of Obama's presidency and hammered the middle class.
It also was the first year since the recession that the poverty rate was no statistically different than it was before the crash in 2007.
The income gains were fairly broad. For the second year in a row, median income rose for households headed by Hispanics, non-Hispanic whites, and blacks. Asian-Americans had the highest median income of any group, $81,400, but it was not statistically different than the previous year.
Households gained the most on the Northeast and West, but the median income was essentially flat in the Midwest and actually declined in the South.
“These are two consecutive years of strong income gains,” Trudi Renwick, chief of the Poverty Statistics Branch, told reporters Tuesday.
The 2016 median income figure is the highest ever, although census officials cautioned that direct comparisons to data before 2014 are not possible because the bureau changed the questions asked in the Current Population Survey that year to get more detailed and precise information on income.
The strong back-to-back growth in median income drew skepticism from some experts. Peter Morici, an economic policy expert at the University of Maryland, said the income gains do not jibe with persistently slow increases in the Gross Domestic Product.
“That seems like an awful lot to me considering the economy grew so little,” he said. “It really makes you wonder if someone’s cooking the books … I find it all very implausible.”
Stephen Moore, an economist who served as an adviser to Donald Trump’s 2016 presidential campaign, said it could be that the income numbers in 2015 and 2016 are a lagging indicator that reflects the economic turnaround from recession to growth in the early years of the Obama presidency.
But Moore added the disparity is puzzling.
“I’m a little mystified by the numbers,” he said. “That is a paradox.”
Josh Bivens, director of research at the Left-leaning Economic Policy Institute, told reporters on a conference call that it is not shocking that the GDP and income figures would diverge because money income accounts for only about 60 percent of the GDP. The census figures do not include things such as employer contributions to health insurance and government transfer payments.