Last year marked the greatest improvement in the typical American family's finances on record, according to a new annual report from the Census Bureau, especially for the working poor.
The median household income before taxes increased 5.2 percent, the report published Tuesday showed, the largest increase in nearly a half-century of data. Average incomes increased more rapidly for poorer families than rich ones.
"In the last year, we’ve seen steady job growth," said Michael Strain, an economist at the conservative American Enterprise Institute. "What we’re looking at is the recovery delivering, in a way that we’ve all kind of hoped it would."
The share of overall income enjoyed by the poorest one-fifth of households increased by 3 percent.
The change in the share of income claimed by more affluent groups of households was not statistically significant.
Lawrence Mishel, president of the liberal Economic Policy Institute, also attributed the gains for poorer households to a rapid decline in unemployment, from 5.7 percent at the beginning of last year to 4.9 percent at the beginning of this year.
"Their hourly wages also get a boost from having less competition among workers for jobs," Mishel said. "We may finally start seeing employers having to compete for workers."
Those gains also appeared in the data for specific demographic groups that tend to be worse off.
Incomes for women living alone increased 8.7 percent last year, while the incomes of married couples increased 4.3 percent. The incomes of younger householders increased more than the incomes of older householders. For householders ages 25 to 34, the increase was 5.6 percent, while incomes for those ages 55 to 64 increased just 3.5 percent.
Hispanics and immigrants in particular benefited from last year's economy. Median incomes for Hispanics increased 6.1 percent. Immigrants' incomes, excluding naturalized citizens skyrocketed 10.5 percent.
Those improvements contributed to an overall increase of 6.4 percent in the Western states, said Giovanni Peri, an economist who studies immigration at the University of California at Davis.
Peri attributed the increase in immigrants' incomes to robust demand for labor in construction, manufacturing and services. Unemployment in the construction sector decreased from an average of 8.9 percent in 2014 to 7.3 percent last year, according to the Bureau of Labor Statistics. In accommodation and food services, unemployment declined from 8.6 percent to 8 percent.
The connection between immigrants' incomes and the labor market "is an important sign of how much they are really contributing to the economy," Peri said. "They are almost all working families, almost all working in jobs for which there is demand."
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