An increase in people with full-time, year-round work past year, and higher minimum wages introduced in some parts of the country, nearly certainly helped boost median household incomes.
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The U.S. economy is a remarkably resilient engine of prosperity, as the Census Bureau’s annual snapshot of incomes and poverty showed on Tuesday.
Incomes are “1.6 percent lower than the median in 2007, the year before the most recent recession, and 2.4 percent lower than the median household income peak that occurred in 1999”, the report said.
Median income means that half the population earns more and half earns less, Zweig said.
The proportion of Americans in poverty also fell sharply a year ago, to 13.5 percent from almost 14.8 percent. And many households that once had middle-class incomes have not recovered since losing work in manufacturing and other higher-paying jobs, with some of them dropping out of the labour force and becoming impoverished.
Steady job growth and the biggest earnings boost in a decade helped sharply lower the nation’s poverty level past year and finally provided relief to the long-running problem of stagnant wages. The official poverty rate fell 13.5 percent with 43.1 million in poverty, 3.5 million less than in 2014, the bureau said.
Last year’s numbers, while impressive, still didn’t bring most Americans back to their pre-Great Recession income levels. Men saw a 1.5 percent increase in real median earnings, while women saw an increase of 2.7 percent. As The Washington Post reports, it’s actually the fastest increase on record, and the bottom 20% of workers were the ones who actually saw their incomes rise the most. Starbucks said in July it would boost pay for all its employees by 5 percent later this year.
The PPIC study also revealed that the state’s highest level of poverty, 26.1 percent, was to be found in Los Angeles County, home to a huge immigrant population working at low-skill, low-wage jobs but confronting very high housing costs in relation to their modest incomes. The gap between the wealthiest five percent of Americans and those right in the middle barely shrank and is wider than it was before the recession.
Income gains were spread across all four geographic regions (the West, Midwest, Northeast and South), across age groups and nearly all races (except for asians), said Census officials.
Americans are also likely benefiting from an increase in middle-income jobs. The latest drop is the largest percentage point decline since 1999, Census officials said. Numerous jobs created in the early years of the recovery were in low-paying sectors, such as fast food restaurants and retail.
But according to a report last month from the Federal Reserve Bank of NY, in 2014 and 2015 the growth of middle-income jobs in sectors such as shipping and construction outpaced the gains in lower-paying and higher-paying work. The report, he said, “shows the remarkable progress that American families have made as the recovery continues to strengthen”.
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California has the highest poverty rate of any state in the nation when cost of living is taken into account – but it’s cut the number of medically uninsured residents almost in half. That’s down from 10.4 percent, or 33 million in 2014. Hispanic households saw the biggest increase in their incomes previous year (6.1 percent).
