Three things to know about the Census' big earnings report out today
Sept. 12--The Census Bureau released its annual accounting of Americans' financial fortunes today. Overall, the story was pretty upbeat in 2016, the last year of President Barack Obama's term. Let's walk through the highlights.
1. The real median household income rose by 3.2 percent, to $59,000. That's not as great as last year's banner 5.2 percent growth rate, but it's still healthier than other government agencies have reported.
So, have incomes recovered from the recession yet? It's actually a difficult question to answer. The Census changed its questions in 2014 in order to capture more sources of income, so officials don't want to make comparisons over longer periods of time. With that caveat in mind, Americans appear to be making only slightly more than they were in 1999, when income last peaked.
Also, this year income inequality doesn't seem to have worsened, with the Gini coefficient, a widely used measure of inequality, showing no significant change. Since 1967, however, incomes for those in the top five percent almost doubled, while the median income has risen by less than one third.
2. Income gains were not the same across groups. Black households saw their incomes rise by 5.7 percent in 2016, to $39,490, compared to 2 percent for white households, which now earn $65,041. The youngest earners, those between age 16 and 24, saw their incomes rise by a whopping 13.9 percent. The South and the Western regions of the U.S. saw the biggest income increases, while the Northeast and Midwest saw no statistically significant change at all.
Residents of core cities saw incomes rise by 5.4 percent, while incomes of people who live outside of metropolitan areas stagnated.
3. The poverty rate is finally lower than it was before the recession. The official poverty measure dropped to 12.7 percent, down from 13.5 percent last year, and 14.8 percent the year before that. That means 40.6 million people are living below the poverty line, which is also down from previous years. The decline in poverty was the largest for children.
That's only the "official" poverty rate, though, which only takes into account before-tax income. The Census also calculates the "supplemental" poverty rate, a more comprehensive measure introduced in 2011 that takes into account taxation, how the cost of living varies across geographical areas, and government benefits. That also declined, but remains higher than the official poverty rate.
Also, the percentage of people without health insurance continued to fall -- in Texas, which has one of the highest rates in the country, my colleague Jenny Deam reports that the rate fell to 16.6 percent.
What's the most important takeaway from all this new data? Basically, the good news from last year's income report, which was the first really positive sign in nearly a decade, may be turning into a trend. But inequality between different demographic groups in America remains deep, and it will be important to watch how these different groups fare in the coming years.
Also, policy changes in the first year of the Trump administration, such as a tax overhaul or changes to federal benefits, may have an impact in future years. In particular, a number of programs that effectively make people less poor -- like Medicaid, food stamps, and disability insurance -- would likely drive up the poverty rate.
If that's not enough, more data is coming: We'll get a detailed geographical breakdown on Thursday.