“Household incomes for American families rose strongly in 2015, breaking a years long pattern of income stagnation. The median household’s income in 2015 was $56,516, an increase of 5.2 percent over the previous year — the largest one-year rise since at least 1967, the Census Bureau reported Tuesday.”
This should be the lead story on every left of center site. And it should be repeated like every 8 hours.
BEST INCOME GROWTH SINCE 1967!!
To some extent this is the snap back from the Great Recession – and incomes are still below 2007. In typical recessions income recovery happens much more quickly, but financial recessions are fundamentally different.
There are other metrics that show economic optimism: Consumer Sentiment is at good levels now as well.
This also explains Obama’s Approval recovery.
Data like this always creates a challenge for Progressives. Some tend to think we are one step away from the global crisis in capitalism, which is why perma bears are in vouge among some on the left. More commonly, I think liberals know that the economy still is tough and touting this seems insensitive.
Here is all you need to know about this story: Not a word on the Fox Home page, National Review or Redstate.
Alas,not much on liberal sites either.
○ Income, Poverty and Health Insurance Coverage in the United States: 2015 | U.S. Census |
Obama’s popularity index shouid be rising as BooMan has already indicated. 🙂
The R squared of a linear regression between consumer sentiment and Presidential is .51 – meaning about half of a President’s approval rating is explained by consumer sentiment.
Obama has been below trend line for a while.
The regression predicts he would be at 55.
Income growth is good, but I will hold off on really celebrating until after we see an established pattern.
I know, that is pessimistic of me, but recent history does not help me see things very optimistically.
Particularly in light of widespread increases in rents/housing prices.
The distribution is no surprise: “As a separate point, note that essentially none of those income gains went to rural areas. That meant a 7.4% wage gain for larger cities…”
http://marginalrevolution.com/marginalrevolution/2016/09/real-median-income-rose-5-2.html?utm_source
=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marginalrevolution%2Ffeed+%28Marginal+Revol
ution%29
However, this group had a lot of demographic distribution details that were positive:
Larry Mishel, is president of Economic Policy Institute, a progressive think tank devoted to analyzing and improving the economic lives of poor, working, and middle-class Americans. Which is to say, in his hundreds of academic papers, blog posts, and interviews, “I haven’t written anything about the U.S. economy this positive in many years. Probably since the late nineties.
http://www.newyorker.com/business/currency/good-news-were-as-rich-as-we-were-in-1998?mbid=rss
Billmon:
As this is in Billmon’s area of expertise, worth paying attention to what he said.
The question is whether this increased wealth in the 80% will be allowed to increase demand or will it be siphoned off in rentals in all the many places they have invaded the system?
Urban Institute September 12, 2016 – Impossible Choices: Teens and Food Insecurity in America
Income growth and income equality are not random; they are the result of policy choices.
This income growth is in spite of several decades of poor policy choices.
And look at the median family income compared to basic costs of living. Most of the job-producing areas of the country are unaffordable.
If people are indeed more optimistic, it is more a matter of general optimism than specific news. If they are willing to credit Obama with the good trends, it is because a good portion of people understand that Republican policymakers have worked to screw the economy and lower wages and salaries.
And 1967 was not a bounceback year but was goosed by the War of Poverty and the Vietnam War and caused part of the inflation hangover in the 1970s.
By far the biggest help to ordinary families would be to cap credit card rates at 10% so that folks who used credit cards to offset the several recessions of the post-Reagan era can catch up without handing all of that increased income over to banks.
I think the politically involved greatly overstate the role of politics in the economy.
The single biggest driver in change is technology. It’s multiple effects are difficult to predict. At times (eg in the late 90’s) it increases the demand for labor, at others it decreases it.
I certainly believe globalization has been behind income stagnation.
But part is the shift from manufacturing to services, and the fact that it has been hard to unionize service sector employees.
Superb points all, fladem.
I’d add that the difficulty in unionizing the growing service sector economy is related to politics. Labor laws suck, and government makes laws, interprets laws, and regulates laws.
The NLRB is worlds better under the current Administration, but labor laws are often not strong enough to prevent employers from stepping all over them, as they do.
We have basically stood around with our mouths open catching flies while public and private unions in the states have been cut out of the herd and eaten.
How rare is it for a politician to mentions unions? Not even Sanders does. “All together” is a farking dodge.
Why aren’t we seeing this: Any progressive state (WA, OR, CA, NV, IL, MD, NY) should have no trouble making union busting a felony. States can add to federal protections — not subtract.
Why have we been so complacent? Well, unfunded pension obligations and austerity have a connection, don’t they?
To Tarheel’s point that it is policy, Robert Rubin posted a bit of history on his blog the other day. It lays out how taxation of executive compensation was finessed to quiet the critics without angering the elites.
“The measure became section 162(m) of the 1993 IRS tax code. It was supposed to cap executive pay. But it just shifted executive pay from salaries to stock options.
After that, not surprisingly, stock options soared – becoming by far the largest portion of CEO pay.”
Sally Mae was made a public/private venture instead of federally administered and look at the results. A near trillion dollar balloon of debt that taxpayers are on the hook for. The private administrators made their profits, though.
The Atlantic has a piece that flays Chicago School of Economics group think…www.theatlantic.com/business/archive/2016/09/why-so-few-american-economists-are-studying-ine
quality/499253/
Jamie Galbraith: Galbraith, for his part, says that he has found other American economists’ interest in the topic lacking. He has found that in American economics, there’s one accepted explanation for the growth of inequality: that globalization and technology created a world in which high-skilled people did well and others did not. If you come along with a different set of ideas, he told me, “you find that it is not open to any discussion.” When he has looked to publish papers and data with other explanations for rising inequality, he finds there’s no proper journal open to it.
Another piece with good links…https://www.ineteconomics.org/ideas-papers/blog/do-u-s-economists-ignore-inequality
Look, one really should have to come up with an explanation for a positive data shift if one wants to take some credit for it. I heard this news and scratched my head. Why?
It’s certainly no because of any policy or action by the Do-Nothing Repub Congress. “conservatives” can be expected to say that this proves a paralyzed federal gub’mint is great for the economy.
For the non-braindead, one has to suppose that there has been some effect from the $15 minimum wage movement across urban America. And that some states, unlike the paralyzed federal gub’mint, are using the historic low interest rates to build or repair infrastructure. These low rates are also fueling a new housing price bubble, and who knows how creditworthy the new owners are and to what extent their mortgages as being put right back into the sausage machine. The bottomless credit regime is also back in business, and there has been enough consumer debt payback over the past 8 years that now the new monster pickup (with low low low gas prices!!) seems a great idea.
Anywhere the why is what I’m interested in.
James Kwak at Baseline Scenario has this to say about the largest income growth since 1967:
“But, and I don’t think Jason Furman would disagree, this is not particularly strong evidence that everything is rosy, or that ‘America is already great,’ as some would have it. As many people have pointed out, median household income in 2015 was only back to its 1998 level. Actually, when you take into account a methodological change in 2013, it’s still 5% below its 1999 peak.”
Kwak provides a table for the annual change in median income for every year since 1985, ranked from best to worst. He also says we’re due for a recession.
https:/baselinescenario.com/2016/09/14/yay-were-almost-as-rich-as-we-were-in-1998#more-13521
This just pisses me off to no end. The Census Bureau changed the methodology in 2014!
http://www.declineoftheempire.com/2016/09/humans-will-believe-anything.html
http://www.declineoftheempire.com/2016/09/deconstructing-median-income-bullshit.html
How come none of those cheerleading articles reproduced that farking graph which totally illustrates what a head scratcher those numbers were.