Missed the News? Household Income Jumps Nearly 7% as Poverty Rate hits a Sixty Year Low
The Census Bureau announced in September that median household income in 2019 had increased 6.8% from 2018. The median household income hit $68,703. Poverty has reached its lowest rate since 1959.
The U.S. Census Bureau announced in September that median household income in 2019 had increased 6.8% from 2018. Median household income was $68,703. Adjusted for inflation, this reflects one of the most robust annual increases to date.
The poverty rate in 2019 had decreased 1.3 percentage points to 10.5%. Since 2014, the rate has fallen by 29%, from 14.8%. Over four million fewer people were in poverty compared with the year before.[i] In fact, the 2019 poverty rate has reached the lowest rate since the first estimates were published in 1959. All racial groups and Hispanics shared in the improvements.
Missed the good news? The Trump years' strong economic performance does not fit into the media's preferred narrative.
Readers familiar with the Washington Post's political bias will be unsurprised that the paper's coverage headline chose to focus on a very slight uptick in those without health insurance. "Fewer Americans had health insurance last year."[ii]
Embarrassingly for the Post, though, the New York Times's account on the exact same report reached a different conclusion. Their lead sentence noted that "health insurance coverage was little changed in 2019."[iii] (The Baltimore Sun reprinted the Times' story. [iv])
The rise in income was driven by an increase in the number of workers, especially women. There were 2.2 million more people working at some point in 2019 compared with 2018, and 1.2 million more people working full-time year-round.
Americans shared broadly in these income gains. Real median incomes of White, Black, Asian, and Hispanic households all increased from 2018, with the variation in changes for each population group not statistically significant. The 2019 real median earnings of men and women who worked full-time, year-round increased by 2.1% and 3.0%, respectively.
The poverty level reduction occurred without any increase in the government redistribution programs favored by progressives. Inconveniently for their solutions, as incomes grew, income inequality fell for the second consecutive year. Between 2017 and 2019, the Gini index of income inequality fell from 0.489 to 0.484. Over the same two-year period, the share of income held by the top 20 percent fell by 0.4 percentage points.
The progress also occurred while leftist advocacy groups lamented that the federal minimum wage has remained the same for ten years. [v] Individual states remain split on whether to increase the minimum wage, to be sure. Twenty-one states have held theirs to the Federal rate, while 29 have chosen to add to it. While it is not possible to break out the data between the "Federal" states and those with higher minimum wage rates, the differences in median household income changes among all regions were not statistically significant. Arguably, the creation of more jobs produces significant benefits.
Unquestionably, the COVID crisis has presented the country with unprecedented challenges, reversing many of the first three Trump years' economic gains. Yet, the primary responsibilities of the President elected in November will be bringing back the economy to where it was at the beginning of the year. No better set of policies are better suited to do so than those that have already produced such strong results.