Tuesday, September 13, 2016

Growing Income in America

Early on Tuesday, the Census Bureau provided some long-awaited good news for the beleaguered working class: The income of the typical American household perched on the middle rung of the income ladder increased a hearty 5.2 percent in 2015, the first real increase since 2007, the year before the economy sank into recession. The median household’s income in 2015 was $56,516.
Households all the way down the income scale made more money last year. The average incomes of the poorest fifth of the population increased 6.6 percent after three consecutive years of decline. And the official poverty rate declined to 13.5 percent from 14.8 percent in 2014, the sharpest decline since the late 1960s.
The numbers are heartening, confirming that the sluggish yet consistent recovery of the American economy has finally begun to lift all boats. They fit the story coming from the job market, which is about as tight as it has been in a very long time. They follow rises in the minimum wage across many states and municipalities.
However, 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 economic recovery, however, remains incomplete. The median is still 1.6 percent lower than in 2007, before the recession. It also remains 2.4 percent lower than the peak reached during the boom of the late 1990s. The number of people living in poverty also remains elevated, although it shrank last year by 3.5 million, or roughly 8 percent.]
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.
To read the story, click here.

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