Median U.S. household income reached $63,200 in 2018, the highest figure on record, new data released Tuesday by the Census Bureau revealed.
The official poverty rate also reached its lowest level since at least 2001, dropping to 11.8% of Americans, or 38.1 million people who are in poverty, according to the Census Bureau measurements. The number of people in poverty in 2018 decreased by 1.4 million people from 2017 levels.
Between 2014-2018, the United States experienced the strongest four-year improvement in the official poverty rate in decades.
With the significant improvements to median income and poverty witnessed from 2015-2017, 2018 was not a particularly unusual year in terms of economic growth trends. It represents the cumulative effort of the economic recovery that started in 2009.
In 2015, for example, the poverty rate dropped from 14.8% to 13.5%, more than any other year since 1969. Also, the median household income rose by a record amount in 2015, with figures dating back to 1967.
The latest Gini index, a measure of income inequality, shows that although income disparities are down a bit from 2017, inequality is still at near the highest it’s been in more than 50 years.
California has the highest levels of poverty, with 18.2% of its people, or 7 million, in poverty. This is essentially due to the high cost of living in California versus other states.
In Arkansas, 13.1% of people live in poverty, which is close to the average for the nation (13.2%), while Iowa, with 6.8% in poverty, is the lowest in the country.
The Census Bureau also released data on the Supplemental Poverty Measure, which goes further than the official poverty measure by showing the impact various government programs have in lifting people above the poverty line. The measure takes into account programs such as Supplemental Security Income for the elderly and disabled poor, Temporary Assistance for Needy Families for very low-income families with children, and SNAP (which used to be called food stamps). In 2018, SSI lifted 2.9 million people above the poverty line, while SNAP and TANF lifted 3.1 million and 0.4 million people out of poverty, respectively.
The Supplemental Poverty Measure rate in 2018 was 13.1%, which is not statistically different from the 2017 rate of 13%.
President Trump’s 2020 budget proposes deep cuts to the number of low-income assistance programs, as well as significant cuts to health insurance. It’s highly unlikely that the president’s budget will get enacted this year or in 2020, but it reflects his priorities in the years ahead.