Amid the headlines about major hurricane after major hurricane, you may have missed news of an important economic milestone. American households in the middle class are now earning more money than they ever have, with their median income topping the $59,000 mark for the first time. The mark is the clearest indication that the country remains on the path of recovery after the worst financial crisis since the Great Depression hit the U.S. in 2007, with its aftermath lingering for several years.
Not only that, 2016 marked another year of strong wage growth of 3.2 percent, a year after the U.S. saw annual income climb at its fastest rate on record. Much of that went to those in the lower and middle-income brackets. The overall poverty rate has plummeted to pre-recession levels, according to the latest Census figures. The black poverty rate in America has never been lower. A record number of Americans have health insurance. Gone are the days, like those in early 2009, when we lost nearly 800,000 jobs in a single month. The country is on a historic monthly job-creation streak. The unemployment rate is at a 16-year-low while the stock market continues to set new highs.
And yet, not many people seem to have celebrated the news, because it is bittersweet. The new median income high of $59,039 is barely above the (inflation-adjusted) previous record of $58,655 set in 1999, meaning it took nearly two decades for most Americans to finally experience modest economic gains. For much of that period, most of those gains went to the already-wealthy or created a new class of wealthy while doing little for those on the margins.
Between 2008 and 2016, for instance, incomes for the poorest Americans grew less than one percent, compared with a 5.3 percent growth rate for the middle class and 10.6 percent for the wealthy. There are now roughly as many U.S. households earning at least $200,000 as those earning less than $35,000. And an American’s ability to climb the economic ladder remains too tied to their ZIP code and racial background – income gaps between white and black Americans remain stark – and not enough to their work ethic and ability or willingness to innovate.
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We have much work to do to ensure that as many citizens as possible can attain the American Dream. But denying or dismissing real progress – and the latest Census report documented real progress – won’t push us closer to that goal. It may be inappropriate to wildly celebrate the latest economic numbers, given the current state of inequality. But we dug out of an enormously large economic hole in less than a decade. Surely there are lessons from that period that can help us make things even better – lessons we can’t learn if we ignore that progress.