Median Household Income Back on the Rise in the US
It’s been a long road to recovery for the U.S. economy following the banking crisis and recession of the past decade but there are some new reasons to be hopeful. Last year the median household income in the United States rose to $56,516. Not only does that represent a 5.2% lift from 2014 but also marks the first increase the figure has seen since way back in 2007, just before the recession hit. However, as MarketingCharts reports, this latest figure is still below the peak of $57,909 that it hit in 1999 (adjusted for inflation).
These stats come from a study by the U.S. Census Bureau that looks at what they call real median household income. This is to say the numbers are converted to 2015 dollars for the sake of comparison. Even with the adjustment, income has been trending upward since the 1960s despite some hiccups along the way. For example the median per household in 1975 was $47,281, rising to $49,631 the following decade before hitting that aforementioned ceiling just ahead of the new millennium.
The single largest income bracket in 2015 was $50,000 to $75,000, which is squarely in the middle class. Although this range described the incomes of around one in six Americans, that percentage is down from 1969, when nearly 25% of people made that much. However the good news is that more families are now making more than $100,000 annually. In fact 26.4% of households fall into one of the brackets above that threshold.
As part of the study household income was also assessed by various factors such as race or age. Once again Americans of Asian decent were the top earners with a median income of $77,166 — up 3.8%. Meanwhile Hispanics saw the biggest gains in 2015 with incomes swelling 6.1% to reach $45,148.
As you might expect workers in their last decade before qualifying for retirement had the highest incomes of any age group, climbing 4.2% to $73,857. From there the amounts decrease along with age, all the way down to 15 to 24-year-olds who brought in about $36,108 (also up 4.2%). Those aged 35 to 44 actually saw the biggest gains overall, adding 7% to their salaries and rivaling their elders, commanding a median salary of $71,417. Millennials 25 to 34 also got raises — their incomes grew an impressive 5.6% in 2015 for a median of $57,366.
Overall it’s encouraging news for an economy that’s experienced plenty of ups and downs, mixed messages, and volatility in recent years. Aside from the positive signs for the US economy, these new figures could potentially also be a small boost to Democratic presidential nominee Hillary Clinton as she trumpets the economy’s recovery under President Barack Obama (who’s playing surrogate for the former Senator and Secretary of State) as part of her pitch to voters. Then again her challenger Donald Trump might argue that these increases didn’t arrive soon enough and should have been even larger. Either way it seems that incomes are headed back in the right direction as America and its many markets continue to shake off the struggles of the last recession.