The U.S. poverty rate declined slightly last year, but finally fell below the 2007 level, right before the Great Recession pushed millions of Americans out of work and into financial distress.
The improving economy was a key factor in the decline. The U.S. Census Bureau noted in its annual report on income & poverty that there were 2.3 million more full-time, year-round workers last year and that median earnings for all such workers rose by more than three percent.
U.S. Census Bureau statistics from its American Community Survey (ACS) show a decline in poverty rates in 13 of 25 of the most populous metro areas from 2016 and 2017.
“It is welcome news,” said Arloc Sherman, a senior fellow at the Center on Budget and Policy Priorities. “Anyway you count – it’s nice to have some improvement.”
Median household income last year was $63,179, not statistically different from the year before, but equal to the peak level reached in 1999.
The White House Council of Economic Advisers touted the new figures as a sign that President Trump’s economic policies are working.
“While Americans across the board generally saw improvements, the data show that in many cases those who had been forgotten in the past were lifted up the most,” the council said in a statement. Children and female-headed households saw some of the biggest declines in poverty.
“Overall, you’re seeing very good progress – progress that’s coming after many years of stagnation during the great recession," said Robert Rector, a senior fellow at the Heritage Foundation. “This is very good."
Rectors credits Trump’s pro-business policies for helping generate more jobs and boosting the economy.
Democrats have criticized Republicans for their policies, including tax cuts, that they say mostly benefit the wealthy, while the GOP has made the economy a central campaign theme. The President has also touted a booming economy, particularly low unemployment rates.
Economists suggested a shift from part-time workers to full-time workers contributed to the improving numbers. Also a factor: The monthly unemployment rate’s steady decline from a high of 10% in October 2009 to a low of 3.7% toward the end of last year.
“A short path from poverty is employment, to work sufficient hours with sufficient wages,” said Lauren Bauer, fellow in economic studies at the Brookings Institution.
The median U.S. household income, meanwhile, increased to $63,179. While it’s the biggest dollar amount on record, it’s statistically insignificant from the previous year, according to the Census Bureau.
The White House praised the higher household income and falling poverty rates and credited Trump administration policies in a statement released Tuesday.
“Before today’s release of the latest Census data, it was already clear that the growing economy was adding millions of jobs and pushing up wages for American workers,” the statement said.
“We now have evidence that the gains were particularly important in 2018 for those typically left behind: Income increased the most for lower-income families. Inequality fell. Poverty fell, especially for black and Hispanic families, and for children in general.”
- Median household income was $63,179 in 2018, not statistically different from the 2017 median (Figure 1 and Table A-1).
- The 2018 real median income of family households and nonfamily households increased 1.2 percent and 2.4 percent, respectively, between 2017 and 2018 (Figure 1 and Table A-1). This is the fourth consecutive annual increase in median household income for family households.
- The 2018 real median income of Asian households increased 4.6 percent from 2017 to $87,194, while the real median incomes of non-Hispanic White ($70,642), Black ($41,361), and Hispanic ($51,450) households were not statistically different from their 2017 medians (Figure 1 and Table A-1).
- For householders under the age of 65, real median household income was not statistically different between 2017 and 2018, while real median household income for householders aged 65 and over increased 3.3 percent from 2017 (Figure 1 and Table A-1).
- The real median income of households maintained by a native-born person increased 1.4 percent between 2017 and 2018, while the 2018 real median income of households maintained by a foreign-born person was not statistically different from 2017 (Figure 1 and Table A-1).
- Between 2017 and 2018, the real median earnings of all workers increased 3.4 percent to $40,247 (Figure 4 and Table A-6).
- The 2018 real median earnings of men ($55,291) and women ($45,097) who worked full-time, year-round increased by 3.4 percent and 3.3 percent, respectively, (Figure 4 and Table A-6) between 2017 and 2018. The 2018 female-to-male earnings ratio was 0.816, not statistically different from the 2017 ratio.
- The number of full-time, year-round workers increased by 2.3 million, between 2017 and 2018. The number of men and women full-time, year-round workers increased by about 700,000 and 1.6 million, respectively.
- The official poverty rate in 2018 was 11.8 percent, down 0.5 percentage points from 12.3 percent in 2017. This is the fourth consecutive annual decline in poverty. Since 2014, the poverty rate has fallen 3.0 percentage points, from 14.8 percent to 11.8 percent.
- In 2018, for the first time in 11 years, the official poverty rate was significantly lower than 2007, the year before the most recent recession.
- In 2018, there were 38.1 million people in poverty, approximately 1.4 million fewer people than 2017.
- Between 2017 and 2018, poverty rates for children under age 18 decreased 1.2 percentage points from 17.4 percent to 16.2 percent. Poverty rates decreased 0.4 percentage points for adults aged 18 to 64, from 11.1 percent to 10.7 percent. The poverty rate for those aged 65 and older (9.7 percent) was not statistically different from 2017.
- From 2017 to 2018, the poverty rate decreased for non-Hispanic Whites; females; native-born people; people living in the Northeast, Midwest, and West; people living inside metropolitan statistical areas and principal cities; people without a disability; those with some college education; people in families; and people in female householder families.
- Between 2017 and 2018, people aged 25 and older without a high school diploma was the only examined group to experience an increase in their poverty rate. Among this group, the poverty rate increased 1.4 percentage points, to 25.9 percent, but the number in poverty was not statistically different from 2017.