A new report by the Census Bureau reveals that in 2015 middle-class Americans and the poor enjoyed their best year of economic improvement in decades. The gains are attributed to improving job market, low inflation, and rising wages.
Real median household income was $56,500 in 2015, up from $53,700 in 2014. This 5.2 percent increase is the largest, in percentage terms, recorded by the agency since it started tracking median income statistics in the 1960s.
Growth in Real Household Income by Percentile, 2014-2015
Source: White House Council
The poverty rate also fell by 1.2 percentage points, the steepest decline since 1968. This year, there were 43.1 million Americans in poverty, 3.5 million fewer than in the previous year.
The Economic Expansion
Source: The NY Times
Regardless of their race, gender, age, or legal status, Americans across the board benefited from increases in household income from 2014 to 2015. Hispanic families saw the largest gains at 6.1 percent in median household income, followed by white families at 4.4 percent, and black families at 4.1 percent. However, those incomes remained below their pre-recession highs.
Source: Census Bureau
Additionally, the gender pay gap narrowed to a record low, with women working full-time earning 80 cents for every dollar that men earn. A woman working full-time in 2015 earned $40,742, a 3 percent bump from 2014, but still $10,000 less than what the median man made.
Some other key takeaways from the report on U.S. income include:
The 5.2 percent increase in real median household income in 2015 was the largest annual gain on record
Median household income per household member in 2015, adjusted for household size, at $22,250 was the highest in history except for 2007 when the figure was $22,431
The median income for married couple with both spouses working reached a new all-time record high in 2015 at $104,000
The share of U.S. households with income of $100,000 or more reached a record high of 26.4 percent in 2015, more than triple the share of households in 1967 with that level of income. At the same time, the shares of U.S. households in both middle-income ($35,000 to $100,000) and low-come (below $35,000) groups fell.
America’s middle-class is disappearing, but into higher (not lower) income category
“The good news is the economy is moving in the right direction. We’ve recovered almost all the ground lost during the Great Recession. The bad news, of course: We’ve got a long way to go to get people at the bottom and in the middle to where they were at the turn of the century.” ~Sheldon Danziger, President of the Russel Sage Foundation
“A 5.2% increase in incomes is spectacular: At that rate, incomes would double in 14 years. But several one-time factors, unlikely to recur, went into the increase.” ~Salim Furth, The Wall Street Journal