From The Wall Street Journal:
A surge in U.S. incomes last year delivered the first significant raise for the typical family after seven years of stagnant and declining earnings, the result of sustained job growth finally lifting a broad swath of American households.
The median household income—the level at which half are above and half are below—rose 5.2%, or $2,798, to $56,516, from a year earlier, after adjusting for inflation, the Census Bureau said Tuesday.
The increase was the largest annual gain recorded since the yearly survey of incomes began in 1967, though it didn’t fully close the gap left by last decade’s recessions. Median household incomes stood 1.6% shy of the 2007 level, before the last recession took its toll, and 2.4% below the all-time high reached in 1999.
The figures show how several years of robust employment growth, including 2.4 million people who gained full-time work last year, helped regain ground lost after an especially wrenching downturn, particularly for lower-income households. Longer hours, higher wages and lower inflation also have contributed to the improvement.
One question now is whether a sustained upturn is under way, or whether these gains are likely to peter out as the economy nears full employment, especially given a continuing slide in measured worker productivity.
“It has been a long slog from the depths of the Great Recession, but things are finally starting to improve for many American households,” said Chris Christopher Jr., an economist at IHS Global Insight, a research firm.
At the current pace, median household incomes could surpass their 2007 level next year, according to forecasts by IHS, concluding a lost decade for workers.
The official poverty rate in 2015 was 13.5%, down from 14.8% in 2014, the Census report said. That was still slightly higher than in 2008 and up from 11.3% in 2000. More than 43.1 million Americans were living in poverty last year. The poverty level was $24,257 for a family of four.
Meanwhile, the report showed fewer people lacked health insurance in 2015 than the previous year, largely because of expanded access through the Obama administration’s Affordable Care Act. The Census Bureau found 29 million people, or 9.1% of Americans, lacked health insurance in 2015. That is down from 33 million people, or 10.4% of the population, in 2014. The uninsured rate has dropped significantly since 2008, when millions more Americans lacked coverage.
Democrats celebrated the report during a campaign season that has been marked by deep economic unease among voters in both parties.