 |
| The Gadsden Green Housing Complex in Charleston, S.C. The income of the typical American household increased 5.2 percent in 2015, the first real increase since 2007, the United States Census Bureau said Tuesday. Travis Dove for The New York Times |
NY TIMES [Condensed]
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 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, the Census Bureau said on Tuesday. The share of Americans living in poverty also posted the sharpest decline in decades. The official poverty rate declined to 13.5 percent from 14.8 percent in 2014, the sharpest decline since the late 1960s.
Income grew most for the lowest-earning workers and least for the highest-earning ones, though all income groups saw improvement.
“The highest income growth was in the bottom fifth" of workers, "which is very welcome news,” said Lawrence Mishel, president of the liberal Economic Policy Institute think tank. Furman, of the White House, credited wage-boosting policy initiatives for some of that increase: “The fact that millions of workers have gotten a raise, as states have raised minimum wages, has definitely had an effect there," he said.
Incomes increased for men and for women - with the income gap between the two genders narrowing slightly.
On health care, states that expanded Medicaid under the Affordable Care Act continued to see a decline in their uninsured rate, widening a coverage gap with those states that did not expand the program.
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.
 |
| Men’s earnings from work increased 1.5 percent, according to the United States Census Bureau, but their incomes are still lower than in the 1970s. Spencer Platt/Getty Images |
EDUARDO PORTER, NY TIMES [Condensed ]
And yet this positive news — while clearly undermining Donald J. Trump’s unbridled pessimism about the American economy — does not justify unbridled celebration, either. The next question is why did it take such a long time for things to look good?” said Arloc Sherman of the Center on Budget and Policy Priorities, a left-leaning policy analysis group. As Sheldon H. Danziger of the Russell Sage Foundation put it, it’s great news that men’s earnings from work increased 1.5 percent. But they are still lower than in the 1970s.
The answer does not just involve sluggish growth. It is also about its distribution. Gains may be finally trickling down to those at the bottom of the ladder. But the numbers still offer a lopsided picture, with a gargantuan share of income rising to the top. While the bottom fifth of households increased their share of the nation’s income, by the census’s definition, to 3.4 percent from 3.3 percent, the richest 5 percent kept 21.8 percent of the pie, the same as in 2014.
The data, which measured how Americans were doing six years into the economic recovery, show that incomes in the middle, measured in 2015 dollars, were still 1.6 percent below the previous peak of $57,423 a household, which was attained in 2007, just before the economy sank into what has come to be known as the Great Recession.
And, except for the long expansion that ran from 1991 through 2000, it has been getting worse. The economic growth from late 2001 to about the end of 2007 never even managed to deliver incomes above the previous peak for the typical household, reached near the end of Bill Clinton’s presidency. The expansion underway today may not get there, either. Today, median household incomes are still 2.4 percent below the absolute peak they hit in 1999.
At the bottom of the ladder, households at the 10th percentile — those poorer than 90 percent of the population — are still a bit poorer than they were in 1989. Americans have managed to develop an internet economy, invent social media and build driverless cars since then, but not to improve the lot of those at the bottom.
The current census data does suggest that growth can ultimately bring prosperity to average Americans. Still, it also points to the persistence of wide inequality as being at the center of the story.
Across the entire bottom 60 percent of the distribution, households are taking home a smaller slice of the pie than they did in the 1960s and 1970s. The 3.4 percent of income that households in the bottom fifth took home last year was less than the 5.8 percent they had in 1974. With their share shrinking with almost every economic cycle, it is hardly a surprise that it takes longer for them to experience any income gains at all. Growth, alone, is not adding to their prosperity as it once did.
By contrast, households in the top 5 percent have profited nicely from America’s expansions. In 2015, they took in $350,870, on average. That is 4.9 percent more than in 1999 and 37.5 percent more than in 1989.- While the economy is moving in the right direction, the real incomes of most American households are smaller than in the late 1990s, and Donald J. Trump’s message of economic decay is resonating. The recent economic upswing mostly benefits large metropolitan centers, not rural areas, industrial centers and Appalachia.