Median household income levels increased for the second year in a row in 2016, according to a new census report released on Tuesday. The report also shows a decrease in the official poverty rate.
“Median household income in the United States in 2016 was $59,039, an increase in real terms of 3.2 percent from the 2015 median income of $57,230. This is the second consecutive annual increase in median household income,” according to the U.S. Census Bureau.
“People have demanded higher wages instead of settling on what was offered to them,” Brooklyn Pringle, a sophomore majoring in finance, said. Pringle points out that due to low unemployment, workers are in higher demand for employees, and therefore higher wages have been provided.
Dr. Jeremy Jackson, director for the Study of Public Choice and Private Enterprise and an associate professor of agribusiness and applied economics, attributes the rise in income level to a higher workforce participation rate and low unemployment. “With more household members working, income for households has increased,” Jackson said.
Economists believe this trend in rising income levels is showing progress in the American economy following the 2007 recession. Most businesses recovered fully or in part after the recession, but many Americans’ income levels remained stagnant.
“The recently released statistics showed an increased proportion of households falling into the middle-class income ranges. This, coupled with the household income, is reflective of a strengthened middles class,” Jackson said, expressing hope for future success of middle class Americans.
Many politicians have been tapping in to Americans’ frustration with income, including President Trump, which gained him a lot of support from blue-collar workers. Trump campaigned on a platform of repairing the American economy and raising the fortunes and prosperity of the nation.
Jackson said that the rise in household income and the future success of income levels is not a matter of policy. “Household income isn’t directly tied to policy, but is the result of labor market conditions. Generally, the middle class will fare the best when the economy itself is growing.”
Jackson highlighted areas that can be addressed to assist in further success of the American workers and the economy, noting that a “good step in the right direction can be to simplify the tax code and reduce income tax rates allowing households to keep what they earn.”
The report released by the Census Bureau shows that the poverty rate decreased by 0.8 percentage points from 2015 into 2016. The Census Bureau also reported that the percentage of people without health insurance coverage for 2016 was 8.8 percent, down from 9.1 percent in 2015.