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The Higher Wages of Growth
Before the pandemic, income growth soared and poverty fell to the lowest rate since 1959.
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Wonder Land: Political insanity can be defined as refusing to admit the reality of destructive violence. Images: Getty Images Composite: Mark Kelly
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Sept. 16, 2020 7:22 pm ET
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In case you missed it, and most of the media did, the Census Bureau reported Tuesday that the median household income in 2019 grew a whopping 6.8%—the largest annual increase on record. While this year’s government-ordered lockdowns will erase these gains in the short term at least, it’s still worth highlighting how lower-income workers and minorities benefited from faster growth and a tighter labor market before the pandemic.
Real median U.S. household income last year rose by $4,379 to $68,709. In dollar amounts, this is nearly 50% more than during the eight years of Barack Obama’s Presidency. The wealthy last year benefited from a roaring stock market, as they did during most of the Obama years.
But lower and middle-income folks were also finally sharing more in the country’s growing wealth. Notably, median household incomes increased more among Hispanics (7.1%), blacks (7.9%), Asians (10.6%) and foreign-born workers (8.5%) versus whites (5.7%) and native-born Americans (6.2%). One reason is more Americans with lower education levels were working.
Last year the number of Americans with employment earnings increased by 2.2 million, including 1.2 million more who were employed full-time, year-round. Median earnings increased by an astounding 7.8% for women compared to 2.5% for men. What was that about closing the gender earnings gap?
After the 2008-2009 recession, increases in government transfers reduced the incentive for unemployed Americans to work. These included 99 weeks of unemployment benefits, which didn’t lapse until 2013 and then many Americans out of work went on Social Security disability.
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