September 13, 2016 | No Comments
U.S. incomes saw their largest single-year boost last year in nearly half a century, according to a new Census Bureau report that could boost Hillary Clinton’s campaign while undercutting Donald Trump’s message of Americans being left behind.
Median household income increased 5.2 percent in 2015, to $56,516, the census said. This was the first annual increase of any kind, after inflation, since the Great Recession of 2007-2009, and the largest recorded annual increase since the data series started in 1967.
Hillary Clinton immediately retweeted a favorable comment on the findings by the University of Michigan economist Justin Wolfers — adding, mischievously, a 2004 quote from Trump: “It just seems that the economy does better under the Democrats than under the Republicans.”
In a blog post, Jason Furman, chairman of the White House Council of Economic Advisers, said the report “shows the remarkable progress that American families have made as the recovery continues to strengthen.”
According to the report, last year’s median household income was up $2,798 from an inflation-adjusted $53,718 in 2014.
The income hike isn’t likely to impress Trump, who insists — without citing any evidence, and contrary to virtually every independent expert — that the federal government’s economic statistics are rigged. In an economic speech last month, Trump said the 5 percent unemployment rate was “one of the biggest hoaxes in American politics,” and on Monday he told CNBC that Federal Reserve Chair Janet Yellen was keeping interest rates low “because she’s obviously political and doing what Obama wants her to do.”
But Tuesday’s good news was difficult to refute. Scott Winship, a fellow at the conservative Manhattan Institute, tweeted that 2015’s household income, although still “0.3 percent lower than in 2007,” was still “higher than in any other year.”
“We’re hardly better off than the Clinton era,” Winship tweeted, “but richer than ever before and than practically all societies in world history.”
Jared Bernstein, former chief economic adviser to Vice President Joe Biden, said, “This is the kind of report you’d expect as the economy moves closer to full employment.”
Some doubt lingers whether incomes are rising as fast in 2016 as they did in 2015. Gross domestic product grew more robustly in 2015 than it has thus far this year. The Commerce Department reported last month that real GDP grew an anemic 1.1 percent in the second quarter of 2016. That was higher than the first quarter of 2016’s 0.8 percent but below the fourth quarter of 2015’s 1.4 percent.
On the other hand, wages — as distinct from income, which includes investment gains — have been rising more briskly in 2016 than they did last year. The left-leaning Economic Policy Institute calculates that wage growth was up 2.51 percent in August over the previous year. In August 2015 wage growth was up 2.08 percent.
The census report even delivered mildly favorable news on the intractable problem of income inequality, reporting a 4.7 percent decline in the ratio of household income at the 90th and 10th percentiles. The ratio also declined in 2014. Other inequality measures showed no statistically significant change.
The most lopsided increases in income inequality over the past two decades have occurred in income share for the top 1 percent versus the bottom 99 percent. In June, Berkeley economist Emmanuel Saez reported that although “income inequality remains extremely high,” the recovery “now looks much less lopsided than in previous years,” with incomes for the bottom 99 percent up 3.9 percent in 2015. That, Saez said, was “the best annual growth rate since 1999.”
According to Tuesday’s report, Hispanic households saw a 6.1 percent increase in real median household income in 2015, non-Hispanic white households saw a 4.4 percent increase, and black households saw a 4.1 percent increase. Asian households did not see a statistically significant change in real median household income.
Men and women working full-time, year-round, saw their first significant annual increase in real median earnings since 2009. Men in that group experienced a 1.5 percent increase between 2014 and 2015, while women working full-time experienced a 2.7 percent increase. The female-to-male earnings ratio was 80 percent, close to the 2014 ratio.
In addition, the Census Bureau reported that the poverty rate declined to 13.5 percent — a 1.2 percent decrease from the previous year’s 14.8 percent and the largest annual decline since 1968.
The supplemental poverty rate, another poverty measure that considers government assistance programs for low-income families, declined to 14.3 percent, down 1 percent from the previous year’s 15.3 percent.
Elise Gould, senior economist at the Economic Policy Institute, attributed part of the decline in poverty rate to recent minimum wage hikes at the state and local level and federal assistance programs like the Supplemental Nutrition Assistance Program, or food stamps.