Income is up, unless you don’t think so

Household income

The U.S. Census Bureau announced 2015 was the best year of economic improvement in decades for middle-class Americans and the poor. Furthermore, the percentage of people without health insurance declined. The findings of the two reports in which these results are detailed, Income and Poverty in the United States: 2015 and Health Insurance Coverage in the United States: 2015, are summarized below:

“Real median household income was $56,500 in 2015, the bureau reported, up from $53,700 in 2014. That 5.2 percent increase was the largest, in percentage terms, recorded by the bureau since it began tracking median income statistics in the 1960s.

“In addition, the poverty rate fell by 1.2 percentage points, the steepest decline since 1968. There were 43.1 million Americans in poverty on the year, 3.5 million fewer than in 2014. The share of Americans who lack health insurance continued a years-long decline, falling 1.3 percentage points, to 9.1 percent.

“On health care, states that expanded Medicaid under the Affordable Care Act continued to see a decline in their uninsured rate, widening a coverage gap with those states that did not expand the program.”

As could be expected, the Obama administration jumped on these figures as evidence of tremendous economic improvement under their care and signs the administration’s economic and healthcare policies have been successful and should be continued:

“Today’s report from the Census Bureau shows the remarkable progress that American families have made as the recovery continues to strengthen. Real median household income grew 5.2 percent from 2014 to 2015, the fastest annual growth on record. Income grew for households across the income distribution, with the fastest growth among lower- and middle-income households. The number of people in poverty fell by 3.5 million, leading the poverty rate to fall from 14.8 percent to 13.5 percent, the largest one-year drop since 1968, with even larger improvements for African Americans, Hispanic Americans, and children. Meanwhile, the ratio of earnings for women working full-time, full-year to earnings for men working full-time, full-year increased to 80 percent in 2015, the highest on record. Every State has seen declines in its uninsured rate since 2013 as the major coverage provisions of the Affordable Care Act have taken effect. Solid employment growth and robust real wage growth so far this year suggest that incomes are continuing to rise in 2016, and, building on the progress shown in today’s Census report, the President will continue to call on Congress to take steps to invest in job creation, wage growth, and equal pay for equal work.”

The White House posted a video of President Obama on Facebook celebrating the announcement, which can be viewed below or here on the official White House Facebook page.

https://www.facebook.com/plugins/video.php?href=https%3A%2F%2Fwww.facebook.com%2Fpotus%2Fvideos%2F533791280144050%2F&show_text=0&width=560

However, many Republicans quickly dismissed the supposed economic improvement. A statement from House Ways and Means Committee Chairman Kevin Brady, R-Texas, said:

“Today’s report is another disappointing confirmation that too many Americans are still struggling to provide for their families and reach their full potential. The federal government invests billions of dollars each year in programs to help low-income Americans – but more than 43 million people continue to live in poverty. It shouldn’t be this way in America.”

In other words, although these reports show record economic improvement the improvement is not adequate. Years removed from an economic downturn these numbers would have been expected to improve more quickly and at a greater pace. There has been economic progress, but the growth yielded by the Obama administration’s policies are weak. Therefore, the Census Bureau reports do not necessarily run counter to Republican presidential nominee Donald Trump’s key campaign assertion that America is in decline and working people’s lives are getting worse. Especially as workers in rural areas saw no growth and the South lagged behind other regions. Furthermore, one of Trump’s economic advisers, Stephen Moore, cautioned that any increase was a “blip” and said,

“It’s a very good thing that we finally have some income growth for middle-class families. But the most depressing thing about where we stand in America – and I think this is why the Trump phenomenon has taken hold – is that the average American is still poorer today than it was 15 years ago.”

As perceptions of economic conditions are inherently subjective and biased as are views of healthcare the facts become opinions. Thereby, the economy is improving only if prior beliefs condition the voter to believe the improvement to be real. Perception is reality.

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