The Wall Street Journal on September 17, 2020 reports on the recent report from the Census Bureau. The complete editorial is HERE.
In case you missed it, and most of the media did, the Census Bureau reported Tuesday that the median household income in 2019 grew a whopping 6.8%—the largest annual increase on record. While this year’s government-ordered lockdowns will erase these gains in the short term at least, it’s still worth highlighting how lower-income workers and minorities benefited from faster growth and a tighter labor market before the pandemic.
Here are some highlights.
- Real median U.S. household income last year rose by $4,379 to $68,709. In dollar amounts, this is nearly 50% more than during the eight years of Barack Obama’s Presidency.
- lower and middle-income folks were also finally sharing more in the country’s growing wealth. Notably, median household incomes increased more among Hispanics (7.1%), blacks (7.9%), Asians (10.6%) and foreign-born workers (8.5%) versus whites (5.7%) and native-born Americans (6.2%).
- Median earnings increased by an astounding 7.8% for women compared to 2.5% for men
- Poverty fell 1.3 percentage points last year to 10.5%, the lowest level since 1959, and declined more for blacks (2 percentage points), Hispanics (1.8), Asians (2.8), single mothers (2.6), people with a disability (3.2), and no high-school diploma (2.2). The black (18.8%) and Hispanic (15.7%) poverty rates were the lowest in history.
- the child poverty rate also declined to 14.4% from 16.2% in 2018 and 18% in 2016. The decline in childhood poverty last year was nearly twice as much as during the entire Obama Presidency. The most pro-family policies are those that increase jobs and wages.
- Income inequality last year also declined by most measures as the bottom quintile’s share of income grew 2.4%. But incomes grew across the distribution with many lower earners rising into the middle class, some of whom joined the ranks of the affluent.
These income gains weren’t magical. Policy changes mattered. The Obama Administration’s obsession with income redistribution and regulation retarded business investment and economic growth. This in turn led to slower income growth for most Americans. Business investment and hiring increased amid the Trump Administration’s deregulation and the GOP’s 2017 tax reform that unleashed animal spirits. New business applications increased twice as much during the first two years of the Trump Presidency versus the last two Obama years, other Census data show.