Thursday, September 15, 2016

Census Bureau: Incomes Up, Poverty Down!

One of the big news items of the week concerns outstanding economic news from the Census Bureau. Major progress in family income and a big drop in the poverty rate headlined a report that surprised many with gains that had not been seen in decades. The figures, covering 2015, were immediately touted by President Obama and ought to provide a boost to the Clinton campaign as they are good news for the incumbent party.

Median household income grew 5.2% for the year, to $56,516, a gain of $2,800 in one year. It was the largest year-to-year improvement since records have been kept. Even more remarkable, it was the poorer end of the population that saw the biggest gains. The bottom ten percent saw their average incomes grow by 7.8%, while the top ten percent grew by 2.9%. The poverty rate went from 14.8% in 2014 to 13.5% in 2015, the largest yearly percentage drop since 1968. Three and a half million people were lifted out of poverty status in one year. The minimum wage was raised in 20 states, likely a big part of the reason for the strong performance. The jobs picture was also strong. "Last year, 1.4 million more men and 1 million more women were working full time year-round than in 2014," the census found.

There was good news on health care, too. 2015 saw 9.1% of Americans without health insurance, a drop from 10.4% the previous year, and the lowest uninsured rate on record. That was a single-year reduction of 4 million people, from 33 million to 29 million. The primary reason was the second full year of  implementation the Affordable Care Act, or Obamacare. These are rather spectacular gains. When the ACA was passed, some 15% of the population was not covered, about 47 million people. We thus already have 18 million more people, 6% of the population, insured than before the Act.

The news does not correspond to the Trump campaign's narrative of stagnating jobs and wages. Trump campaign economic spokesman Peter Navarro "did not respond to requests for comment" on the report. Meanwhile the President, campaigning for Clinton in Pennsylvania, said, "So now let's face it; the Republicans don't like to hear good news right now. But it's important just to understand this is a big deal. More Americans are working, more have health insurance, incomes are rising, poverty is falling, and gas is $2 a gallon...Thanks, Obama!"




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