US Median Income, Poverty Virtually Unchanged

New Census Data Bureau Analyzed

US Median Income, Poverty Virtually Unchanged
October 8, 2015

If you are still struggling to make ends meet and are waiting for the economic recovery to show up in your paycheck, the recent data released by the US Census Bureau will come as no surprise to you. The median income of Americans after adjustment for inflation fell from $54,462 in 2013 to $53,657 in 2014, a difference that is statistically insignificant.

Consider that this adjusted median value is calculated during a time of relatively low inflation. Wages are unable to surpass even the low amount of inflation that exists today.

Census researchers noted that while our economy is in a recovery stage and has been for some time, there is a long way to go to restore America's collective wealth. The 2014 median income value was 6.5% below that of 2007, the last annual data point before the Great Recession took hold.

Part of the flattening effect can be attributed to a demographic shift. According to Edward Welniak, the Census Bureau's Chief of Income Statistics within the Housing and Household Economics group, there were 1.2 million more non-family households in 2014 than in 2013. Non-family households often have lower incomes, thus skewing the statistics toward lower median incomes.

However, it is hard to argue that the Census data shows anything other than a very slow recovery. Even though unemployment fell throughout 2014, wage gains are modest at best. The classic economic theory of lower unemployment driving up wages through demand has not yet materialized.

The change in income inequality as measured by the Gini index was statistically insignificant, suggesting no hidden differentials in income that were cancelling out in the aggregate.

Poverty numbers were equally disappointing. Using the Office of Management and Budget (OMB) definition of poverty, the 2014 poverty threshold for a family of four as a weighted average was $24,230. Approximately 9.5 million families fell within this poverty criterion. The poverty rate in 2014 rose slightly to 14.8%, up 0.3% from 2013. As with median income, the changes were statistically insignificant.

Was there any good news in the Census Bureau's data? There were a few bright spots, including a significant drop in those without health insurance. 33 million Americans are still uninsured, just over 10% of the population, compared to 41.8 million uninsured Americans in 2014. For children under age 19, the uninsured rate dropped from 7.5% to 6.2%. Given the coverage mandates of the Affordable Care Act, any other insurance outcome would have been a shock.

With respect to poverty, the supplemental poverty measure that includes in-kind benefits showed a lower poverty rate for children compared to the official rate, down to 16.7% from 21.5%. Any children in poverty is an unacceptable outcome, but at least the supplemental numbers show that government programs such as SNAP and refundable tax credits are lessening the burden.

The Census Bureau press release, complete with links to the corresponding full reports, may be found here.

So far in 2015, the income and wage pattern has held with unemployment falling all the way to 5.1% as of this writing. That is near the point considered as full employment and wages still have not risen — in part due to a large pool of workers that are underemployed or not currently looking for work.

Without a significant change in the fourth quarter, the Census Bureau analysis for 2015 wages and unemployment will likely be more of the same. In that case, 2015 would be the fourth consecutive year of static median incomes during an economic recovery — an unusual recovery indeed.


Photo ©iStock.com/Fertnig

  Conversation   |   26 Comments

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Erin | 10.08.15 @ 15:00
This doesn't surprise me. Things have been stagnant for years.
Heather | 10.08.15 @ 15:02
Most everyone I know still lives paycheck to paycheck. We don't get cost of living increases like we should to keep up with the rising cost of expenses.
Jackie | 10.08.15 @ 15:04
Unfortunately this will no doubt be the norm for several years to come. The days of long term employment and regular increases in cost of living are long gone.
Steffanie | 10.08.15 @ 15:04
Seems like everyone is just surviving the last few years, so this article is not shocking to me.
Crystal | 10.08.15 @ 15:04
Not surprising at all. Still depressing statistics.
Elaine | 10.08.15 @ 15:05
None of this is all that surprising.
Nancy | 10.08.15 @ 15:06
This is definitely not surprising to me. I know a lot of people who are still struggling and who have not recovered.
Christina | 10.08.15 @ 15:06
Something really needs to change. Living paycheck to paycheck is the reality for most people and inflation is ridiculous.
Daniel Dohlstrom | 10.08.15 @ 15:07
Seems like it is day to day for so many people these days can only hope something can change this for the better
Kamie | 10.08.15 @ 15:07
Everyone wants the wages to go up, but no matter what, when wages go up the cost of living goes up, but right now, the cost of living is going up, and the wages are staying the same. The thing with poverty, is that in all honesty those who "mayor" a city/town have their eyes closed to it. They refuse to see that this is an issue. Can we get everyone to be in the middle class? Of course not, but I feel if there were more outlets to teach people about money management, to provide a safe low income housing, or even a transitional housing that we can see an uprising with less in poverty. But it all also depends on the person. Some people love being poor.
Sarah | 10.08.15 @ 15:09
Yeah... consider me underwhelmed by the news... I live it, I know.
Carla Truett | 10.08.15 @ 15:27
We are barely getting by as it is. I would love to see wages rise as the cost of living goes up.
trish | 10.08.15 @ 15:28
We are that family living paycheck to paycheck, saving a little only to be used the following month...still hopeful someday we will be in a better place
Britt | 10.08.15 @ 15:28
This actually doesn't surprise me at all
Kyle | 10.08.15 @ 15:32
This really isn't surprising.
Stokes | 10.08.15 @ 15:33
This isn't surprising, not even a little bit.
Kailie | 10.08.15 @ 15:35
The amount of people below the poverty line in this country is seriously upsetting
Jill | 10.08.15 @ 15:37
This is no surprise, but I saddened by this!
Debbie | 10.08.15 @ 15:38
I live paycheck to three days before paycheck usually.....none of this information surprises me I live it daily.
Rychana Vingia | 10.08.15 @ 15:46
This is no shock. Hopefully things start to improve.
Irene | 10.08.15 @ 15:46
I am very thankful that we (and I mean literally my family no we as a nation) have finally recovered from the recession. We were not effected as early as some people, times didn't get bad for us right off in 2008 but once they did it took us until 2014 to truly recover from all we lost and the debt we incurred just to survive and not be homeless
Angie | 10.08.15 @ 15:48
I can say we are definitely part of the "struggling majority."
Jo Ann | 10.08.15 @ 15:51
This is saying we are holding our own not gaining but not loosing either. But prices are still rising so even with the small drop in income., our money isn't stretching quite as far.
Beverly | 10.08.15 @ 15:52
Really not all that surprising. I do love how they tend to downplay the bad and overplay the kinda good. They do realize "we the people" are the ones living it right?
Owen | 10.08.15 @ 15:54
Companies keep getting richer and we struggle paycheck to paycheck.
Andrea | 10.08.15 @ 15:54
Nothing new, So many of us still struggling with paycheck to paycheck.,
$commenter.renderDisplayableName() | 12.08.16 @ 18:11
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