Reports Show Rising Income, Housing Subsidies Lift 3.1 Million Out of Poverty

The U.S. Census Bureau recently released two annual reports on income and poverty. The first report, entitled “Income and Poverty in the United States: 2016,” presents data on income, earnings, income inequality, and poverty in the United States based on information collected in the 2017 and earlier Current Population Survey Annual Social and Economic Supplements (CPS ASEC) conducted by the U.S. Census Bureau.

Here are the report’s highlights:

Income:

• Median household income was $59,039 in 2016, an increase in real terms of 3.2 percent from the 2015 median of $57,230. This is the second consecutive annual increase in median household income.
• For family households, real median income of married-couple households and households maintained by women with no husband present increased 1.6 percent and 7.2 percent between 2015 and 2016, respectively.
• The real median income of non-Hispanic White, Black, and Hispanic-origin households increased 2.0 percent, 5.7 percent, and 4.3 percent, respectively, between 2015 and 2016. This is the second annual increase in median household income for non-Hispanic White, Black, and Hispanic-origin households. For Asian households, the 2015 to 2016 percentage change in real median income was not statistically significant. (The differences between the 2015-2016 percentage changes in median income for non-Hispanic White, Black, Hispanic, and Asian households were not statistically significant.)
• Real median household income increased for the South (3.9 percent) and the West (3.3 percent) between 2015 and 2016, while the changes for the Northeast and Midwest were not statistically significant. (The difference between the 2015-2016 percentage changes in median income for households in all regions were not statistically significant.)

Earnings:

• The total number of men and women working full-time, year-round with earnings increased by 2.2 million between 2015 and 2016.
• The 2016 real median earnings of men and women who worked full-time, year-round was $51,640 and $41,554, respectively, not statistically different from their 2015 estimates.
• The 2016 female-to-male earnings ratio was 0.805, a 1.1 percent increase from the 2015 ratio. This is the first time the female-to-male earnings ratio experienced an annual increase since 2007.

Income Inequality:

• The share of aggregate household income in the fourth quintile decreased 1.3 percent between 2015 and 2016 while changes in the other quintiles were not statistically significant.
• The money income Gini index was 0.481 in 2016, not statistically different from 2015. Changes in money income inequality between 2015 and 2016 were not statistically significant as measured by the other indicators: the Theil index, the MLD, or the Atkinson measure.

Poverty:

• The official poverty rate in 2016 was 12.7 percent, down 0.8 percentage points from 13.5 percent in 2015. This is the second consecutive annual decline in poverty. Since 2014, the poverty rate has fallen 2.1 percentage points from 14.8 percent to 12.7 percent.
• In 2016 there were 40.6 million people in poverty, 2.5 million fewer than in 2015, and 6.0 million fewer than in 2014.
• The poverty rate in 2016 (12.7 percent) was not significantly higher than the poverty rate in 2007 (12.5 percent), the year before the most recent recession.
• No major demographic group experienced an increase in its poverty rate between 2015 and 2016.
• For most demographic groups, the number of people in poverty decreased from 2015. Adults aged 65 and older were the only tracked population group to experience an increase in the number of people in poverty.
• Between 2015 and 2016, the poverty rate for children under age 18 declined from 19.7 to 18.0 percent. The poverty rate for adults aged 18-64 declined from 12.4 to 11.6 percent. The poverty rate for adults aged 65 and older was 9.3 percent in 2016, not statistically different from the rate in 2015.

The second report, the Census Bureau’s Supplemental Poverty Measure (SPM), addresses the shortcomings of the official poverty measure, which excludes non-cash government benefits from household income. The SPM takes into account non-cash benefits for low-income households like housing subsidies, the Supplemental Nutrition Assistance Program (SNAP), the National School Lunch Program, the Supplementary Nutrition Program for Women, Infants, and Children (WIC), and the Low Income Home Energy Assistance Program (LIHEAP). The SPM also subtracts necessary expenses from household income, like child-care, medical, and work-related expenses.

The SPM shows that housing subsidies lift 3.1 million Americans out of poverty. They reduced the supplemental poverty rate by 1.4 percentage points for children under 18, 1.3 percentage points for seniors at least 65 years old, and 0.7 percentage points for adults between the ages of 18 and 64.