Longer-Term View Adds Context to Census Poverty Data

Posted September 13, 2017

Incomes for a typical USA household, adjusted for inflation, rose 3.2 percent from 2015 to 2016 to $59,039, the Census Bureau said. The lack of meaningful raises has left many people feeling left behind economically, a sentiment that factored into the 2016 elections.

Household income in the world's largest economy rose for the second straight year in 2016 while poverty also continued to decline, according to government figures Tuesday.

The Census data said it changed its income questions in 2014, which makes it hard to make comparisons before that year.

The official poverty rate varies depending on household size and income.

Family households have a real median income of $75,062, and non-family households bring in $35,761. In addition, the number of people without health insurance went from 29 million to 28 million between 2015 and 2016.

The median USA household income for the year was $59,039, up 3.2 percent in inflation-adjusted terms from the prior year and the second consecutive increase. Median income declined and the poverty rate rose during former President Obama's first term as the nation struggled to recover from the Great Recession before starting to improve in his second term. The median income for white households in 2016 was about $65,000; it was $39,500 for black households.

That's only the "official" poverty rate, though, which only takes into account before-tax income. There are just seven states that now have 12% or more of their population uninsured, down from 31 states in 2013, ahead of the introduction of Barack Obama's Affordable Care Act.

In a stark reminder of the damage done by the Great Recession and of the modest recovery that followed, the median American household a year ago finally earned more than it did in 1999. Americans in the top 5 percent took home more than $375,000 in income past year, compared with just $12,943 for those in the bottom quintile.

It showed that Social Security benefits lifted 26.1 million people out of poverty, while refundable tax credits helped 8.2 million people and food stamps prevented 3.6 million from being in poverty.

"While these numbers reflect incremental improvement, they have not cancelled out peoples' experience with the most recent economic downturn".