US Census Bureau Annual Report Shows 3.5 Million People Lifted out of Poverty

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September 13, 2016, New York Times

U.S. household incomes surged 5.2 percent in 2015, the first gain since 2007. The U.S. Census Bureau’s 2015 annual report on income, poverty, and health insurance in the United States brought this good news to the nation. This announcement is both of great importance to the nonprofit sector and fraught with implications for the presidential campaign.

The data is based on information collected in the 2016 and earlier Current Population Survey Annual Social and Economic Supplements (CPS ASEC). The gains for the middle class and poor were both broad and deep.

The White House website sums up the report this way: “In 2015, household income grew at the fastest rate on record, the poverty rate fell faster than at any point since 1968, and the uninsured rate continued to fall.”

“We lifted three and a half million people out of poverty, the largest one-year drop in poverty since 1968,” President Obama said on Tuesday at a rally in Philadelphia for Mrs. Clinton. “The uninsured rate is the lowest since they began keeping records. The pay gap between men and women shrank to the lowest level on record.”

The Census Bureau annual report offers these specifics:

  • This is the first annual increase in median household income since 2007.
  • The number of full-time, year-round workers increased by 2.4 million in 2015.
  • The official poverty rate decreased by 1.2 percentage points between 2014 and 2015.
  • The number of people in poverty fell by 3.5 million between 2014 and 2015.
  • For most demographic groups, the 2015 income estimates were statistically higher than the 2014 estimates.

America still has greater wealth and income inequality than any major developed country, a gap wider today than at any time since the 1920s. Even though the nation’s labor force participation rate is near its lowest point since the late 1970s, the gains in this report came mostly from job growth rather than wage growth. More people may be working, but many of them are still struggling. As we in the nonprofit sector know from daily experience, the household income gains are welcome but fragile. And we are especially aware of the pockets of persistent poverty that are so deeply rooted that only the kind of profound change that arises out of populist movements can address it. The New York Times adds these finer points to areas of the economy that this annual report shows our work remains incomplete.

The median household income was still 1.6 percent lower than in 2007, adjusting for inflation. It also remained 2.4 percent lower than the peak reached during the boom of the late 1990s. The number of people living in poverty also remained elevated, although it shrank last year by about 3.5 million, or roughly 8 percent.

Democrats praise and Republicans deride the news, and both parties need to contend with the enduring burden of the national debt rising to nearly 80 percent of the nation’s gross domestic product (GDP). But no one can dismiss the good news facts in this report. Jason Furman, chairman of Obama’s Council of Economic Advisers, called the income report the strongest he had ever seen from the Census Bureau: “The news here is the growth rates. I’ve read the last 21 reports, including this one. I have never seen one like this, in terms of, everything you look at is what you’d want to see or better.”

“You know the old saying, ‘When the economy sniffles, the least advantaged catch pneumonia?’” said Jared Bernstein, an economist at the Center on Budget and Policy Priorities, a Washington research organization, and a former adviser to Vice President Joseph R. Biden Jr. “Well, that works the other way, too. The benefits of closing in on full employment disproportionately flow to the least advantaged.”

—James Schaffer