American household income finally topped 1999 peak a year ago

Robyn Ryan
September 13, 2017

The figures for 2016 mark the second consecutive annual increase in the median household income - a closely watched metric for how the American middle class is doing from year to year, adjusted for inflation.

There was no significant change in income inequality for the year, with the top five percent of households bringing in $225,252 or more a year while the bottom quintile earned $24,003 or less. That puts income just 1.6 percent below what households earned before the recession started in late 2007, according to the Economic Policy Institute, a left-leaning think tank. It is based on interviews with 70,000 households and includes detailed data on incomes and poverty across a range of demographic groups.

"Over the past several decades Census Bureau reports have found that the average one year risk of poverty tends to vary between 11 and 15 percent".

That percentage-point increase in 2015 was the largest since 1998, when real median income increased 3.7 percent from 1997, Jonathan Rothbaum, chief of the bureau's statistics branch, said in an online analysis at the time.

The Census report covers 2016, the previous year of the Obama administration. Nevertheless, the Census data indicates that the most recent income gains have pushed household income close to where it stood in 2007.

The poverty threshold for a two-person household under the age of 65 was $16,072 past year.

The number of those without health care coverage is also down.

Sheldon Danziger, head of the Russell Sage Foundation poverty research group, said "expanding the earned income tax credit. and more spending on badly needed infrastructure and early childhood education" would lift employment and productivity. While that is an improvement, it still leaves 40.6 million Americans in poverty. In addition, the number of people without health insurance went from 29 million to 28 million between 2015 and 2016.

While the median income was the highest ever recorded in a Census Bureau chart that dates to 1967, bureau officials said long-term historical comparisons should not be drawn because of changes in 2014 to the income question in the bureau's Current Population Survey. Women earned 80.5 percent of men's earnings, up from 79.6 percent in 2015.

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