Evan Horowitz | Quick Study

Incomes are up, poverty is down — but Americans should be doing better

(Keith Srakocic/Associated Press/File 2018)

The government Wednesday released a batch of much-anticipated economic statistics with the breadth to tell us how American households are really doing. The answer? While families saw their incomes rise a little, and while nearly a million people climbed above the poverty line, the effects weren’t as dramatic as you might expect given the strength of the US economy.

The numbers come from an enormous annual survey from the Census Bureau that focuses on earnings, poverty, and health insurance.

The Census Bureau found that households in the middle of the income ladder saw their total earnings in 2017 increase 1.8 percent to $61,400, after adjusting for inflation.


This marks the third consecutive year with an increase, but it falls short not just of the 3.2 percent gain recorded in 2016 but also the overall growth of the economy, which has been above 2 percent.

It also means today’s median household is doing no better than in 2007, or 1999, once you adjust for changes in the way this survey has been run over time.

One reason for the slowdown is inequality, as higher-earning families saw bigger gains in 2017 than their middle-class peers. But inflation played a role, too, with a jump in oil prices and general pickup in the inflation rate in 2017 eating into paychecks and holding down real earnings.

Further down the income ladder, the story is similarly mixed.

On the up side, the overall poverty rate fell from 12.7 percent to 12.3 percent, meaning there were nearly 1 million fewer Americans living in poverty in 2017. And the drop seemed to extend across races.

But that still means there are approximately 40 million Americans in poverty, a third of them under 18. And to give a sense for how low the bar is, a family of four falls below the poverty line with $24,858 in annual earnings.


Also, a growing share of the American poor aren’t even close to escaping, which you can see by looking at the number of people earning less than half of poverty wages, or below $12,500 per year. Back in 1975, about a third of impoverished families earned less than that; today, it’s nearly half.

Finally, the Census analysis found that recent gains in health insurance coverage across the country stopped short last year.

Between 2013 and 2016, the number of uninsured Americans had dropped from 13.3 percent to 8.8 percent, but it didn’t budge in 2017.

Add it all up and 2017 looks like a decent but not spectacular year for American families, at a time when our shrinking unemployment rate and still-growing economy might have made the spectacular possible.

Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the U.S. He can be reached at Follow him on Twitter @GlobeHorowitz.