The U.S. Census Bureau announced today that real median household income increased by 5.2 percent between 2014 and 2015 while the official poverty rate decreased 1.2 percentage points. At the same time, the percentage of people without health insurance coverage decreased.Median household income in the United States in 2015 was $56,516, an increase in real terms of 5.2 percent from the 2014 median income of $53,718. This is the first annual increase in median household income since 2007, the year before the most recent recession.The nation’s official poverty rate in 2015 was 13.5 percent, with 43.1 million people in poverty, 3.5 million fewer than in 2014. The 1.2 percentage point decrease in the poverty rate from 2014 to 2015 represents the largest annual percentage point drop in poverty since 1999.The percentage of people without health insurance coverage for the entire 2015 calendar year was 9.1 percent, down from 10.4 percent in 2014. The number of people without health insurance declined to 29.0 million from 33.0 million over the period.
Democrats are positively ecstatic about this. Jason Furman, the chair of the White House Council of Economic Advisers, called it “unambiguously the best Income, Poverty & Health Insurance report ever.” And they have some justification. The increase in household income is the largest in a single year since we began collecting these data in the 1960s. Perhaps most notably, the increases in income were spread across the entire population, with the greatest gains coming for the poorest Americans. Here’s a chart from the CEA:
There are also positive results across races: non-Hispanic whites saw their incomes rise by 4.4 percent, African-Americans by 4.1 percent, Asian-Americans by 3.7 percent, and Hispanics by a remarkable 6.1 percent.
Donald Trump is holding a rally this afternoon in Des Moines, and it’ll be interesting to see what he has to say. If he stays true to form, he’ll argue that the Census figures are rigged, and in fact there have been no income gains at all. Even if he doesn’t go that far, he’s sure to be asked about this report, and he’ll probably dismiss it as a misleading bunch of mumbo-jumbo that has no connection to real people’s lives.
There’s some truth there, at least in so far as figures about median income don’t describe everyone’s lives. Even when incomes rise overall, there are still people falling backward, people struggling, and people who feel insecure about their future. And of course, the Great Recession put the country in an economic hole that we’re still climbing out of.
But there’s a basic difference in how Hillary Clinton and Donald Trump have described the country’s economic situation all along, even apart from the differences in what they’d like to do about it. Clinton says that things are going pretty well, there’s been a lot of progress since the recession, but there are still problems that need to be addressed. Trump, on the other hand, says that the economy is an absolute nightmare of suffering and deprivation, and what’s required to fix it is a radical change.
As it happens, the policies that Trump is offering aren’t radical at all. They’re familiar to anyone who remembers the administration of George W. Bush: cut taxes for the wealthy, cut regulations on corporations, and wait for economic nirvana to arrive. But you don’t sense that very many Trump supporters are behind him because they’ve taken a careful look at the two candidates’ economic plans and decided that his stand a greater chance of producing broad prosperity.
In effect, Trump’s argument to the whole country is the same one he made to African-Americans: Your life is an unending catastrophe, so “What the hell do you have to lose?” Sure, I have no experience, I’m a complete ignoramus, I lie every time I open my mouth, the more you learn about my past the clearer it becomes that I’m an outright con man, I’m easily the most despicable human being to seek the presidency in modern times…but things couldn’t get any worse, right?
There are some Trump supporters for whom that’s a reasonably persuasive argument. They say, well, I don’t really like the things he says, but maybe he can do what other politicians haven’t, so why not give it a shot? But the less the country looks like a disaster, the less reasonable that idea becomes.
It’s impossible at this point for Trump to abandon his description of the economy as a complete ruin, because that’s what so much of the rationale for his candidacy rests on. Clinton’s description of the economy, on the other hand, at least has some connection to reality. Unemployment is below five percent, inflation is all but non-existent, gas costs around $2 a gallon, and now incomes are rising, too. So when she says that things are good but could be better, it has the benefit of resonating with both what people see in their own lives and what they perceive of other people’s lives.
And both are important. Voters make their decisions not just by considering how they’re doing, but also by considering how the country is doing, and they form that perception in large part through what they see in the media. If this report changes the conversation in the media about the economy, it could go a long way toward convincing wavering voters that Clinton is the one with the correct description of our economic situation.