Household income has surpassed a peak set in the late 1990s. There's good and bad news in that.
Tuesday’s report that median household income (adjusted for inflation) made a healthy climb last year, surpassing its 1999 peak, doesn’t come as a surprise. Some takeaways:
This is what happens after seven years of recovery, albeit it uneven, from the worst downturn since the Great Depression. Not only that, but it wasn’t goosed by a bubble the likes of the 2000s housing hustle (which still didn’t produce decent job growth). This also comes after the biggest one-year increase in income, for 2015. African-American and Hispanic households saw stronger gains than non-Hispanic whites. The overall income gap among racial groups persists, however. For everyone, the best gains went to full-time workers. Last year, poverty was down, and those without health insurance fell yet again to a historic low. Thanks, Obama.
Last year’s median income — where half of households earn above it and half below it — was $59,039. For comparison’s sake, the inflation-adjusted number was $44,895 in 1967, when record-keeping began.
A challenge: The Census Bureau changed its methodology in 2013. The results make comparisons inexact, and increase income (which doesn’t mean it’s fake). According to the liberal Economic Policy Institute (EPI), median household income would have been 2.4 percent lower than 1999 and not yet past the pre-recession peak, without the adjustments. I’ll wait for economists to slug this one out.
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The bigger problem is that it took this long to get back to slightly above 1999’s numbers. Let that sink in.
The problem of stagnant earnings persists, especially for men. According to Census data, the median earnings for full-time, year-round male workers was $52,000 — about the same as they made in 1972. Women’s median earnings hit a record high $48,000 last year. Back to household income (as opposed to earnings), the poorest fifth of households saw a drop of $571 over the decade. The wealthiest fifth increased $13,479 during that time (and, yes, people move up and down in the income quintiles, but studies keep showing mobility is less).
Today’s Econ Haiku:
Execs dumped stock in advance
Gotta give credit