For much of the past year, American voters have been subjected to a bombardment of negativity about the U.S. economy. During the Democratic presidential primaries, left-wing candidate Sen. Bernie Sanders served up a story of beaten-down employees serving their corporate bosses “longer hours for lower wages.”
On the Republican side, Donald Trump portrayed the United States as a near-prostrate victim of trading partners’ cheating, in which official statistics have been nefariously manipulated to conceal the real (higher) unemployment rate. Perhaps for fear of seeming insensitive to the lingering postrecession hurt many households still feel, Democratic nominee Hillary Clinton has seemed to hesitate to talk about the real recovery that has taken place under the fellow Democrat, President Obama, she is trying to succeed — much less claim credit for it.
We attempted to correct the record and set the debate on a somewhat more accurate basis a few days ago, by noting some of the positive data that the politically motivated naysayers have overlooked. Turns out we didn’t know the half of it. A fresh batch of Census Bureau data released Tuesday show that the median household’s inflation-adjusted income rose $2,798 to $56,516 in 2015, a 5.2 percent increase. That’s a record one-year upsurge in the half-century history of this particular data series. And it is the first such increase since 2007, the last year before the Great Recession. To be sure, median incomes remained 1.6 percent below their pre-recession levels, but given employment and wage growth trends, that last bit of ground could well be made up this year.
More important, the largest-percentage income increases took place below the top 10 percent of households on the income-distribution scale. According to a blog post by Jason Furman, Obama’s top economic adviser, this translated into modest reductions in the major statistical indicators of income inequality. Also, the poverty rate fell from 14.7 percent to 13.5 percent, reflecting 3.5 million fewer people living below the poverty line in 2015 than in 2014.
In other words, during the entire time candidates such as Sanders and Trump were out on the stump, the U.S. economy was performing contrary to their respective tales of woe. Traumatic as it was, the Great Recession belongs mostly to the past, and those who speak and act otherwise are simply not leveling with the public. It bears repeating that there is still a lot of unfinished business; major structural issues, from an irrational tax code to stagnating productivity, cry out for policy fixes and could help undermine the slow but steady recovery if the next president and Congress don’t act. But the truth is that things are at last looking up economically for Americans, including middle- and lower-income families. And that bears repeating, too.
FROM AN EDITORIAL IN THE WASHINGTON POST