Median household income tops 1999 peak

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.

“We are definitely pulling ourselves out of the deep hole of the Great Recession,” said Elise Gould, a senior economist at the Economic Policy Institute.

Median household income rose $4,641, or 8.5 percent, from 2014 through 2016. That’s the best twoyear 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 one-fifth of households, meanwhile 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 less than $24,563 was defined as poor last year.

By the government’s standard yardstick, California’s 14.5 percent average poverty rate over three years -- 2014, 2015 and 2016 -- was only slightly higher than the national 13.7 percent rate, and well behind the 20.8 percent in Mississippi and 20.6 percent in Louisiana.

But California had the highest poverty rate of any state in the nation, 20.4 percent, using the U.S. Census Bureau’s Supplemental Poverty Measure, trailing only the District of Columbia’s 21 percent, according to figures released Tuesday. The national rate under that measure was 14.7 percent, while the rates were 16.9 percent for Mississippi and 18.4 percent for Louisiana.

Unlike the Census Bureau’s official poverty measure, which estimates rates by analyzing an individual or family’s cash income, the supplemental measure, which analysts have said is more accurate, accounts for differences in housing costs across the United States and other factors that can impact a family’s income. It also takes into account many of the government programs designed to assist low-income families and individuals that are not included in the current official poverty measure, according to the Census Bureau.

Alyssa Anderson, senior policy analyst at the California Budget & Policy Center, called the state’s poverty rates, “unacceptably high,” and the a nonpartisan public policy research group blamed the high cost of housing.

“Eight million people lack basic economic security according to these new figures that were released today,” she said.

Fair market rent for a two-bedroom apartment costs more than $1,500 per month in areas where nearly two-thirds of Californians live, according to the budget and policy center, making it difficult for many families to make ends meet.

“This fact underscores the need for California to do more to increase access to affordable housing in order to promote greater economic security in the state,” the center said in an analysis of the data.

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.

Trudi Renwick, the Census 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.