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Median Household Income Jumps for First Time Since Recession

By Erin Mershon, CQ Roll Call

September 13, 2016 -- Median household income in the United States rose 5.2 percent to $56,516 last year, the first annual increase in that figure since the 2008 recession, according to new data from the U.S. Census Bureau.

The income gains were accompanied by a significant 1.2 percentage point drop in the poverty rate. About 43 million people in the U.S. lived in poverty, 3.5 million fewer than in 2014—the largest year-to-year drop since 1999.

Together, the figures paint a picture of an improving economy as the nation digs out from the deepest recession in decades. The White House jumped at the chance to herald the announcements.

"Today’s report from the Census Bureau shows the remarkable progress that American families have made as the recovery continues to strengthen," several officials, including Chairman of the Council of Economic Advisers Jason Furman, said in a joint statement.

Trudi Renwick, chief of the poverty statistics branch at the Census Bureau, highlighted the historic nature of the jump in median household income in particular.

"It's up really just across the board. It's up for all four [geographic] regions. It's up for almost every age group of household heads. It's up for almost every racial group except for Asians," she said on a call with reporters. "It's really a broad, broad increase in household median income, and it's one of the largest year-to-year increases in median household income that we've ever had."

Gains were largest for lower-income Americans—the poorest 10 percent of Americans enjoyed gains of nearly 8 percent. Those in the top 10 percent saw income gains of about 2.9 percent.

At the same time, the census bureau's measures for income inequality, the so-called Gini index, didn't change meaningfully from 2014 to 2015. Increases in median income and the decrease in the poverty rate, then, didn't meaningfully improve the lives of poorer Americans any more than those of richer Americans. Since it was first implemented in 1993, however, the index has risen 5.3 percent—showing that the income gap between the rich and the poor has widened over time.

Republicans used the report to highlight that millions of Americans remain in poverty.

"Too many Americans are still struggling to provide for their families and reach their full potential," House Ways and Means Committee Chairman Kevin Brady, R-Tex., said in a statement that also touted House GOP plans, led by Speaker Paul D. Ryan of Wisconsin, to overhaul health care, taxes and other policy areas.

Health Coverage Gains

The agency's latest figures also showed that about 4 million people gained health insurance coverage in 2015, dropping the total number of uninsured individuals to 29 million. The nation's uninsured rate was 9.1 percent, down from 10.4 percent in 2014.

It represents a sizeable change from 2013, the year many of the provisions of the president's signature health care law took effect, when the same report showed that 41.7 million individuals were uninsured. Democrats and other supporters of the health law have trumpeted its improvements in access to health care as one of its clear, demonstrable successes—even as the newly insured continue to face substantial challenges affording that coverage.

The gains in insurance coverage, which occurred for individuals with both private and government coverage, were higher in states that have chosen to expand Medicaid, the federal-state program for the low-income people and those with disabilities.

The survey also includes statistics that show how many Americans would be in poverty without supplemental income like Social Security. Those figures showed that 26.6 million Americans were lifted out of poverty by Social Security, another 9.2 million were lifted out by refundable tax credits, and about 4.6 million were lifted out of poverty by Supplemental Nutrition Assistance Program benefits. The supplemental measure also shows how the poverty rate is impacted when taking into account expenses. That data showed that some 11.2 million people slid into poverty after accounting for their out-of-pocket medical expenses. About 5.6 percent did so because of work expenses.

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