Today’s headlines seized on highlights from a US Census Bureau report, Income and Poverty in the United States: 2015, excitedly extolling the good news that household incomes “surged” (Wall Street Journal), “soared” (Washington Post), and broke a “pattern of stagnation” (NY Times). According to the report, median household income increased 5.2% from 2014, rising to $56,515. It was the first annual increase since 2007. At the same time, the poverty rate dropped to 13.5%, a 1.2% drop since 2014. In raw numbers, this means that 3.5 million people were lifted out of poverty, reducing the total remaining in poverty to 43.1 million.
Noting that “[t]he largest increases in incomes last year were for the bottom fifth of all earners,” the Wall Street Journal suggested a possible cause: “rising state and local minimum wages.” The Census Bureau report pointed out that the number of full-time, year-round workers increased by 2.4 million people, which suggests that increased employment may have been a factor as well.
The bottom line is that it may be a little too early to draw conclusions regarding what is surely good news. While this data indicates some positive things are happening in the nation’s economy, it is not clear whether they are the result of systemic, long-term changes that will re-balance economic and political power, or trickle down from an economic model that continues to reward the wealthy at a far greater pace and far costlier price.