U.S. Household incomes surged 5.2 % in 2015, first gain since 2007

U.S. Household incomes surged 5.2 % in 2015, first gain since 2007

A surge in U.S. incomes last year delivered the first significant raise for the typical family after seven years of stagnant and declining earnings, the result of sustained job growth finally lifting a broad swath of American households

The median household income—the level at which half are above and half are below—rose 5.2 %, or USD 2798, to USD 56516, from a year earlier, after adjusting for inflation, the Census Bureau said September 13, 2016.


The increase was the largest annual gain recorded since the yearly survey of incomes began in 1967, though it didn’t fully close the gap left by last decade’s recessions. Median household incomes stood 1.6 % shy of the 2007 level, before the last recession took its toll, and 2.4 % below the all-time high reached in 1999.

The figures show how several years of robust employment growth, including 2.4 million people who gained full-time work last year, helped regain ground lost after an especially wrenching downturn, particularly for lower-income households. Longer hours, higher wages and lower inflation also have contributed to the improvement.

One question now is whether a sustained upturn is under way, or whether these gains are likely to peter out as the economy nears full employment, especially given a continuing slide in measured worker productivity.

“It has been a long slog from the depths of the Great Recession, but things are finally starting to improve for many American households,” said Chris Christopher Jr., an economist at IHS Global Insight, a research firm.

At the current pace, median household incomes could surpass their 2007 level next year, according to forecasts by IHS, concluding a lost decade for workers.

The official poverty rate in 2015 was 13.5 %, down from 14.8% in 2014, the Census report said. That was still slightly higher than in 2008 and up from 11.3 % in 2000. More than 43.1 million Americans were living in poverty last year. The poverty level was USD 24257 for a family of four.


Meanwhile, the report showed fewer people lacked health insurance in 2015 than the previous year, largely because of expanded access through the Obama administration’s Affordable Care Act. The Census Bureau found 29 million people, or 9.1 % of Americans, lacked health insurance in 2015. That is down from 33 million people, or 10.4 % of the population, in 2014. The uninsured rate has dropped significantly since 2008, when millions more Americans lacked coverage.

The income and poverty report is drawn from an annual survey asking detailed questions about annual incomes—including wages, dividends, child support and government benefits. The survey, collected in March with results released in September, is sent to around 95000 households that are representative of the U.S. population.

Income gains were spread across nearly all age groups, household types, regions and racial or ethnic groups. One exception: Incomes didn’t rise for households living outside metropolitan areas.

The largest increases in incomes last year were for the bottom fifth of all earners, which could reflect rising state and local minimum wages. As a result, the ratio between incomes at the 90th and the 10th percentiles narrowed.

Meanwhile, the figures showed incomes at the 60th, 80th, 90th and 95th percentiles reached new records after adjusting for inflation. Incomes for households at the 10th and 20th percentiles still stood 9.9 % and 7.6 % below their peaks set at the end of the 1990s, respectively.

Among all full-time, year-round workers, women saw substantially larger earnings gains than men, posting an annual increase of 2.7 %, compared with 1.5 % for men. The increases narrowed the pay gap between women and men to the lowest level on record.

Noncitizens, who tend to earn less and have higher workforce participation rates than native-born workers, saw some of the largest increases in incomes last year. Median incomes of noncitizen households rose 10.5 % to USD 45100, while incomes of native-born households rose 4.4 % to USD 57200.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.