Reading into a decreasing poverty rate, increasing median household income

Here are a few notable trends in the new data that shows the poverty rate is down in the United States and median household incomes are up:

Regionally, economic growth was uneven.
The median household income in the Midwest grew just 0.9 percent from last year, which is not a statistically significant amount. In the South, by contrast, the median income grew 3.9 percent; in the West, it grew 3.3 percent. “The Midwest is the place where we should have the greatest worry in part because we didn’t see any significant growth,” said Mary Coleman, the senior vice president of Economic Mobility Pathways, a national nonprofit that tries to move people out of poverty. Median household income was also stagnant in rural areas, growing 13 percent, to $45,830. In contrast, it jumped significantly inside cities, by 5.4 percent, to $54,834, showing that cities are continuing to pull away from the rest of the country in terms of economic success…

African Americans and Hispanics experienced significant gains in income, but still trail far behind whites and Asians.
All ethnic groups saw incomes rise between 2015 and 2016, the second such annual increase in a row. The median income of black families jumped 5.7 percent between 2015 and 2016, to $39,490. Hispanic residents also saw a growth incomes, by 4.3 percent, to $47,675. Asians had the highest median household income in 2016, at $81,431. Whites saw a less significant increase than African Americans and Hispanics, of 1.6 percent, but their earning are still far higher, at $61,858.

The poverty rate for black residents also decreased last year, falling to 22 percent, from 24.1 percent the previous year. The poverty rate of Hispanics decreased to 19.4 percent, from 21.4 percent in 2015. In comparison, 8.8 of whites, or 17.3 million people, were in poverty in 2016, which was not a statistically significant change from the previous year, and 10.1 percent of Asians, or 1.9 million people were in poverty, which was also similar to 2015…

Income inequality isn’t disappearing anytime soon.
Despite the improvements in poverty and income across ethnic groups, the American economy is still characterized by significant income inequality; while the poor are finally finding more stable footing following the recession, the rich have been doing well for quite some time now. The average household income of the the top 20 percent of Americans grew $13,749 from a decade ago, while the average household income of the bottom 20 percent of Americans fell $571 over the same time period. The top 20 percent of earners made 51.5 percent of all income in the U.S. last year, while the bottom 20 percent made just 3.5 percent. Around 13 percent of households made more than $150,000 last year; a decade ago, by comparison, 8.5 percent did. While that’s something to cheer, without a solid middle class, it’s not indicative of an economy that is healthy and stable more broadly.

Both of these figures – the poverty rate and median household incomes – are important indicators of American social and economic life. Thus, that both are trending in the right direction is good.

Yet, we also have the impulse these days to (1) dig deeper into the data and (2) also highlight how these trends may not last, particularly in the era of Trump. The trends noted above (and there are others also discussed in the article) can be viewed as troubling as the gains made by some either were not shared by others or do not erase large gaps between groups. Our understandings of these income and poverty figures can change over time as measurements change and perceptions of what is important changes. For example, the median household income going up could suggest that more Americans have more income or we may now care less about absolute incomes and pay more attention to relative incomes (and particularly the gap between those at the top and bottom).

In other words, interpreting data is influenced by a variety of social forces. Numbers do not interpret themselves and our lenses consistently change. Two reasonable people could disagree on whether the latest data is good for America or suggests there are enduring issues that still need to be addressed.

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