We talked about the desecration of the American Dream yesterday. As I said, before Reagan assumed the presidency, the 1%ers garnered 7% of after tax income in the US. 28 years later, that share had multiplied by 2.5X- so that the 1%ers collected 17% of the total income.
PPACA (Patient Protection and Affordable Care Act, more typically known as Obamacare) along with some new tax credits (enacted under President Obama’s tenure) have not raised the income levels per se. But, they have helped those in the bottom 20% of the income strata. In effect, their income distribution has been augmented by $ 2200- which is a far greater change than would be achieved with a decade of income gains.
Now, we see that in calendar year 2015– for the first time in a very long time- the median household income in the US actually rose. Significantly. By 5.2% to $ 56,516. (I do hope you know that the median income means that half the folks in America made more than that- and ½ made less. That’s not the same thing as average income. Because it doesn’t take many folks making a $ 1 million or $ 10 million or more to bring the average income way up.)
Even with that great uptick, median income still has not recovered to pre-Great Recession levels. The income level is still almost 2% below the levels that obtained in 2007. And, a lot of the gains in median income can be attributed to longer hours worked, and not just because there was a rise in hourly compensation.
And, while the poverty rate (the number of people who earn below the poverty level) has dropped this past year, it, too, is still higher than that level that existed in 2007. (That makes the percentage of folk living in poverty 13.5% and 11.3%, respectively.)
Now, we have to address the real problem. Why is it that many (most?) of us don’t feel this great improvement in our incomes? Because the improvement is not uniform across America. Nope. Sure, it’s pretty much spread across the age groups, across household sizes, across racial and ethnic divides. But, those who live in rural America- which is where most of the Republican-leaning types live- they haven’t shared in this improvement at all. Not even for the bottom fifth of incomes- the level (as mentioned above) did improve (a lot) in metropolitan areas of the US. (Hmm. Could that be related to the fact that their states refused to participate in Obamacare? Of course it is.)
And, that does not bode well for the Democratic Party. Because income growth in the battleground states has basically stagnated since the Great Recession.
Then again, the Republican Party standard bearer has a slew of negatives- almost from A to Z.
But, the real issue- improving American’s lives- should never be a political football!