US Median Income Rises, Poverty Rate Drops

After years of flat to negative pay increases, the US median income shot up in 2015 by a record 5.2% to $56,500. This was the highest level since 2007, and economists credit employment gains for the increase. The 5.2% surge was the biggest since record keeping began in 1968. Higher incomes mean less poverty. Some 43.1 million Americans lived in poverty last year, a drop of 3.5 million compared to 2014. The 2015 poverty rate fell to 13.5 percent from 14.8 percent in 2014. That’s the largest drop since 1999. After 2010’s 17-year high, the poverty rate has declined every year. One can say, with some confidence, that the nation has recovered from the economic meltdown of 2007-8.

Reuters noted, “In another encouraging sign, the number of residents without health insurance dropped to 29 million last year from 33 million in 2014. Nearly 91 percent of people in the United States had health coverage, up from 89.6 percent the previous year.

“‘The three key indicators of well-being … all moved decisively in the right direction in 2015 – the first time that has occurred in nearly two decades,’ said Robert Greenstein, president of the left-leaning Center on Budget and Policy Priorities.

“An alternative measure of poverty that takes into account non-cash benefits, including food stamps and refundable tax credits, fell one-tenth of a percentage point to 14.3 percent.”

Of course, these data were politicized almost instantly. The Republican House Ways and Means Committee Chairman Kevin Brady called the data “another disappointing confirmation” of the failing policies of the Democrats. He took the view that 43 million in poverty was unacceptable, choosing to ignore the trend and the accelerating decline. This journal accepts that the correct number should be zero, but focusing on what remains to be done at the expense of what has been achieved risks implementing bad policy because change didn’t come instantly.

“Economic recovery finally started arriving for tens of millions of American families over the past year. We should make sure the economy is nurtured going forward, and not subverted by bad policy decisions,” said Elise Gould, a senior economist at the Economic Policy Institute in Washington. What is in place is working, so policymakers should not try to fix that which is not broken.

“The Republicans don’t like to hear good news right now.But it’s important just to understand this is a big deal,” President Obama stated in Philadelphia, where he was campaigning for Hillary Clinton. “For every family who hasn’t yet felt progress these past eight years, we’ve got more work to do – we know that. And the choice that you make, that we make, just eight weeks from today will determine the direction of this country for a long time.”

The program for the next president should simple. Interest rates are at zero, and the nation needs a massive upgrade to its infrastructure. It will never be cheaper financially nor socially more beneficial than to invest a couple trillion dollars on a nation building project in America. The sad truth, however, is that Mr. Trump and the Republicans will never consent to the idea of putting people to work if it is not the private sector running the show. The private sector is lousy at investment that doesn’t pay off for years. Meanwhile, Mrs. Clinton and the Democrats lack the ambition to put enough zeroes on the spending plans. They fear being called spendthrifts. And 43 million will pay for it.