Amer­i­can house­hold in­come fi­nally topped 1999 peak

Porterville Recorder - - NEWS - By CHRISTO­PHER RU­GABER

WASH­ING­TON — In a stark re­minder of the dam­age done by the Great Re­ces­sion and of the mod­est re­cov­ery that fol­lowed, the me­dian Amer­i­can house­hold only last year fi­nally earned more than it did in 1999.

In­comes for a typ­i­cal U.S. house­hold, ad­justed for in­fla­tion, rose 3.2 per­cent from 2015 to 2016 to $59,039, the Cen­sus Bu­reau said. The me­dian is the point at which half the house­holds fall be­low and half are above.

Last year’s fig­ure is slightly above the pre­vi­ous peak of $58,665, reached in 1999. It is also the first time since the re­ces­sion ended in 2009 that the typ­i­cal house­hold earned more than it did in 2007, when the re­ces­sion be­gan.

Trudi Ren­wick, the bu­reau’s as­sis­tant di­vi­sion chief, cau­tioned that the cen­sus in 2013 changed how it asks house­holds about in­come, mak­ing his­tor­i­cal com­par­isons less than pre­cise.

Still, the Cen­sus data is closely watched be­cause of its com­pre­hen­sive na­ture. It is based on in­ter­views with 70,000 house­holds and in­cludes de­tailed data on in­comes and poverty across a range of de­mo­graphic groups.

Elise Gould, a se­nior econ­o­mist at the Eco­nomic Pol­icy Institute, said that ad­just­ing for the change in method­ol­ogy, me­dian in­come still re­mains be­low its 1999 peak. Yet she added that the cen­sus re­port shows that Amer­i­can house­holds have made sig­nif­i­cant eco­nomic progress in 2015 and 2016.

“We are def­i­nitely pulling our­selves out of the deep hole of the Great Re­ces­sion,” Gould said on a con­fer­ence call with re­porters.

Me­dian house­hold in­come rose $4,641, or 8.5 per­cent, from 2014 through 2016. That’s the best two-year gain on records dat­ing to 1967, ac­cord­ing to an­a­lysts at the Cen­ter on Bud­get and Pol­icy Pri­or­i­ties.

Yet that im­prove­ment comes af­ter a steep re­ces­sion and a slow re­cov­ery that left most Amer­i­can house­holds with barely any in­come in­creases. The lack of mean­ing­ful raises has left many peo­ple feel­ing left be­hind eco­nom­i­cally, a sen­ti­ment that fac­tored into the 2016 elec­tions.

The re­port also showed that in­come in­equal­ity wors­ened last year, ex­tend­ing a trend in place for roughly four decades. Av­er­age in­comes among the wealth­i­est 5 per­cent climbed 5.5 per­cent to $375,088. Av­er­age in­comes for the poor­est one­fifth of house­holds, mean­while rose 2.5 per­cent to $12,943.

Other mea­sures of Amer­i­cans’ eco­nomic health im­proved. The poverty rate fell last year to 12.7 per­cent from 13.5 per­cent, Cen­sus said. The num­ber of peo­ple liv­ing be­low the poverty line de­clined 2.5 mil­lion to 40.6 mil­lion.

That brings the pro­por­tion of house­holds liv­ing be­low the poverty line back to pre-re­ces­sion lev­els, though it re­mains about one and half per­cent­age points higher than its low­est point, in 2000.

A fam­ily of four with an in­come be­low $24,563 was de­fined as poor last year.

And the pro­por­tion of Amer­i­cans with­out health in­sur­ance fell to 8.8 per­cent, the re­port showed, down from 9.1 per­cent. It is the low­est pro­por­tion on record.

The Cen­sus re­port cov­ers 2016, the last year of the Obama ad­min­is­tra­tion.

Robert Green­stein, pres­i­dent of the CBPP, ar­gued that the agenda be­ing pur­sued by Pres­i­dent Don­ald Trump and con­gres­sional Repub­li­can lead­ers would re­verse those gains.

The in­come gains re­flect mostly a rise in the num­ber of Amer­i­cans with jobs and in peo­ple work­ing full time, the agency said. That means house­holds were more likely to in­clude a full-time worker. It also sug­gests that pay raises for those who al­ready had jobs re­mained mea­ger.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.