Happy days may be here again for America’s middle class.
The US Census Bureau’s annual look at income and poverty showed a whopping 5% boost last year to the paychecks of middle-class families, although incomes still remained below pre-recession levels. But a full decade after the crisis began, median 2016 household incomes are above or approaching those in 2007. According to census data, inflation-adjusted median household income reached $59,039 in 2016, a 3.2% bump from 2015. (The median income is the midpoint of the US income distribution: Half of US households have higher incomes, half have lower incomes.)
Moreover, the middle class appears to be doing better than it ever has in the recorded history of the survey, which began in 1984. Middle-class incomes peaked in 1999, before the frothy years of the dot-com bubble. Adjusted for inflation, current median household income has finally edged past its 1999 level which was close to, but under, $59,000, inflation-adjusted.
So why don’t things feel quite this good? The Census Bureau changed its methodology beginning with the 2013 reported incomes, so the numbers are not directly comparable to 2007 or previous years, economists contend. The Economic Policy Institute (EPI) calibrated data prior to 2013 to reflect this change. The EPI finds that 2016 median household income is still 1.6% below 2007 levels. But economists at the EPI believe middle-class incomes will be back to pre-recession levels, even with adjustments, by next year.
Female heads of household—both with and without children—saw the biggest gains in median incomes between 2015 and 2016, with a 7% boost for female-run families without husbands. Male heads of households, with no wife present, saw a less than 3% increase, while married couples had only a 1.6% boost.
Incomes for workers aged 15 to 24 years increased by almost 14% from 2015 to 2016, the largest gain for any age, race, gender, or regional group. Older millennials (aged 25 to 34 years) also saw respectable growth to their median incomes.
The picture of a destroyed, weakened middle-class figured heavily in Donald Trump’s 2016 campaign speeches, but perhaps like so much about Trump that belief isn’t based on reality.
Last year, the American middle class did remarkably well.