Middle-class income hit highest level on record in 2016, Census Bureau reports
America's middle class had its highest-earning year ever in 2016, the U.S. Census Bureau reported Tuesday, Sept. 12.
Median household income in America was $59,039 last year, surpassing the previous high of $58,655 set in 1999, the Census Bureau said. The figure is adjusted for inflation and is one of the most closely watched indicators of how the middle class is faring financially, as the Census surveys nearly 100,000 homes.
The Census said the uptick in earnings occurred because so many people found full-time jobs - or better-paying jobs - last year.
America's poverty rate also fell to 12.7 percent , the lowest since 2007, the year before the financial crisis hit. The percent of Americans without health insurance also dropped last year to just 8.8percent, largely thanks to expanding coverage under the Affordable Care Act.
Economists welcomed the news as evidence the recovery had finally taken hold after years of frustration for the middle class as they watched the stock market soar but their incomes barely budged. Donald Trump tapped into this anger in the 2016 presidential campaign, often saying people were no better off economically than they were in 2000.
"The slow early 2000s recovery and expansion, combined with the damage done by the Great Recession, has led to nearly two decades of lost income growth for typical American households," says economist Elise Gould of the left-leaning Economic Policy Institute.
Almost every demographic group saw an increase in income last year, Census officials found. They cautioned, however, that the Census changed its methodology in 2014, so they are hesitant to definitively say it's the highest median ever, but they acknowledge there has been very strong growth in the past two years.
Julian West of Phoenix, Arizona, is a good example of someone whose life dramatically improved last year. For much of the recovery, the only jobs he could find were "dead-end" ones. He was working for $7.25 an hour, minimum wage in his state, at carwashes and stores like Dollar Tree.
"I was really struggling," says West, who was forced to move back in with his parents.
In 2016, he went to a temp agency in Phoenix and landed a job paying $18 an hour. It didn't last, but the recruiter at the agency called again and moved him to the job he has now monitoring car loan payments and repossessions for BT&T bank. The job pays $16 an hour. He works full-time and often gets several hours of overtime a week, boosting his weekly take home pay significantly.
"I'm slowly saving and paying off bills," West, who is now 44, told The Washington Post. He has moved into a small studio now that's he's on track to make over $35,000. It's less than the median, but it's a substantial bump from his minimum wage days.
West credits President Obama for helping turn around the economy and lift up workers like him. He didn't vote for President Trump, but he says he's hopeful someone that rich and successful will be able to keep the country on track.
"I'll be middle class again if I keep my spending to bare bones," West said.