News

The middle class is back — or so it seems.

That’s the message from the Census Bureau’s latest report on “Income and Poverty in the United States.” The news is mostly good. The income of the median household (the one exactly in the middle) rose to a record $59,039; the two-year increase was a strong 8.5 percent. Meanwhile, 2.5 million fewer Americans were living beneath the government’s poverty line ($24,563 for a family of four). The poverty rate fell from 13.5 percent of the population in 2015 to 12.7 percent in 2016.. . . Not all the evidence is upbeat. Here are three sobering takeaways.

First, men’s median wages for full-time, year-round work have stagnated.

. . . Second, the upper middle class is flourishing — but not the lower classes.

. . . Third, almost three-quarters of the rise of Americans living in poverty since 1990 reflects increases in Hispanic poverty — increases linked to immigration, whether legal or illegal.

The technology hub of San Francisco surpassed the nation’s capital last year as the highest-earning large U.S. metropolitan area. Median household income in the San Francisco metro area in 2016 was $96,667, just ahead of the $95,843 figure for the Washington region, the Census Bureau announced Thursday. That put the California hotspot in first place among the 25 most populous metro areas, with the capital falling to the No. 2 slot. The median income for the San Francisco area, including nearby cities such as Oakland and Berkeley, has surged in recent years amid a tech-sector boom and jumped 9.2% in 2016. Incomes in the Washington area, including parts of Maryland and northern Virginia, rose a more modest 2.7% from 2015.

Median household income in America was $59,039 last year, surpassing the previous high of $58,655 set in 1999, the Census Bureau said. The figure is adjusted for inflation and is one of the most closely watched indicators of how the middle class is faring financially, as the Census surveys nearly 100,000 homes. The Census said the uptick in earnings occurred because so many people found full-time jobs — or better-paying jobs — last year. America’s poverty rate also fell to 12.7 percent, the lowest since 2007, the year before the financial crisis hit. The percent of Americans without health insurance for the entire year also dropped in 2016 to just 8.8 percent, largely thanks to expanding coverage under the Affordable Care Act.

U.S. incomes rose and the poverty rate fell last year, according to the Census Bureau’s annual report on economic well-being. The authoritative survey showed continuing progress since the 2007-09 recession. By some measures, however, Americans haven’t returned to levels of prosperity achieved nearly two decades ago.

New figures from the U.S. Census Bureau show California has the country’s highest poverty rate, with nearly one in five residents facing economic hardship when factoring in living costs such as housing.

Government statistics paint an excessively grim picture of what is happening to real wages and the growth of real national income. Although most households’ take-home cash has been rising very slowly for decades, their standard of living is increasing more rapidly because those wages can now buy new and better products at little or no extra cost. The government’s measure of real incomes gives too little weight to this increase in what take-home pay can buy. The common assertion that middle-class households have seen no increase in real incomes for 30 years is simply not true. And contrary to a common fear, most members of the younger generation will have higher real incomes as adults than their parents had at the same age. The government’s growth estimates are excessively pessimistic for two reasons. First, government statisticians grossly understate the value of improvements in the quality of existing goods and services. More important, the government doesn’t even try to measure the full contribution of new goods and services.

Some humility from the authors would have been welcome about the risks of the radical restructuring that basic income would entail; Van Parijs and Vanderborght see only upside. To illustrate the downside potential, consider the poor results from annual per-capita payments of casino revenues to American Indian tribes (not discussed in the book). Some tribes enjoy a very high “basic income”—sometimes as high as $100,000 per year— in the form of these payments. But as the Economist reports, “as payment grows more Native Americans have stopped working and fallen into a drug and alcohol abuse lifestyle that has carried them back into poverty.” The magazine contrasts this fate with that of more successful tribes like Washington State’s Jamestown S’Klallam, which eliminated poverty by investing in tribal-owned small businesses instead of handing out cash grants.

The U.S. economy expanded at its most robust pace in more than two years in the spring and appears to have momentum going into the second half of the year, supported by solid consumer spending and a pickup in business investment.

Gross domestic product, a broad measure of the goods and services produced across the U.S., rose at a seasonally and inflation-adjusted annual rate of 3% in the second quarter, the Commerce Department said Wednesday. That was the strongest quarter in more than two years and some forecasters expect growth will remain around that pace in the third quarter.

The President has vowed to get economic growth back above 3% after the dreary slow recovery of the Obama “new normal.” What’s as sweet as the faster growth last quarter is the way it was achieved—with less spending by state and local governments but more consumer spending and rising business investment.

This last part is especially important. Lackluster business investment was a hallmark of the Obama era. And who could blame executives for being reluctant to pull the trigger on new plants and equipment? It was impossible to know what new intervention in the private economy regulators were dreaming up in Washington. When businesses don’t invest in new tools, workers have a hard time becoming more productive, which in turn means workers can’t demand higher pay.

Direct efforts to relieve poverty via raising minimum wages, providing an earned income tax credit and expanding other public benefits certainly have marginal effects. But the latest reports indicate that in the long run, holding down costs for housing and other living costs, making education more available and effective, and encouraging private investment in more and better jobs are vital if California is to escape the ignominy of having the nation’s highest level of poverty.

The L.A. metro area’s median base pay grew 0.5 percent in a one-year period through July 17 to $59,064, below the national average of 1.2 percent, according to a report from jobs website Glassdoor released Tuesday. The figures mark the slowest pace of wage growth in three years, indicating a continued slowdown in pay increases nationally, despite low unemployment and healthy jobs numbers, according to the report that is based on millions of anonymous salary reports shared on Glassdoor.

The U.S. entered the ninth year of economic expansion in steady but unspectacular fashion that shows little sign of abating.

Gross domestic product, a broad measure of goods and services produced in the U.S., expanded at a 2.6% annual rate in the second quarter, the Commerce Department said Friday, a rebound after a tepid start to the year.

The figures repeated a familiar pattern of weak winters followed by a stronger spring and summer, leaving overall growth subdued. “The economy is on cruise control. Unfortunately cruise control is about 2%,” said Diane Swonk, founder of DS Economics.

The U.S. emerged from recession in mid-2009. Since then, GDP growth has averaged 2.1%. In contrast, growth averaged 3.6% during a 10-year span in the 1990s and 4.9% during a nearly nine-year stretch in the 1960s, the only two expansions with longer durations.

The U.S. entered the ninth year of economic expansion on a familiar path of steady but unspectacular growth, with few obvious indications it is near exhausting itself. Gross domestic product, a broad measure of goods and services produced in the U.S., rose at a 2.6% annual rate in the April to June period, the Commerce Department said Friday. Figures are adjusted for inflation and seasonality.

From 1977 through 2012 (the most recent year for which the Tax Foundation, a business-friendly think tank, has calculated tax-burden data), the state and local tax burden faced by Massachusetts residents fell from 12.3 percent of income to 10.3 percent. That may not sound like much of a decline, but over that period only three states — Alaska, North Dakota and South Dakota — saw bigger decreases. Massachusetts, which had ranked among the top three or four states for tax burden in the late 1970s and early 1980s, has since 2000 oscillated around 12th place. . . . Massachusetts hasn’t just created more jobs, it has apparently created better jobs, with per capita personal income rising from below that of the rest of the Northeast in 1980 to 11.6 percent higher in 2016.

Pollack found she could make enough extra income renting out a bedroom and her pool house so that she could keep paying the mortgage on her Sherman Oaks home. And she could still pursue acting and producing, even though work is harder to come by as a woman in her late 50s. “My greatest income of source is my home, and if I lose both of those – honestly, it’s not an option for me,” Pollack said. The unthinkable for home sharers has become a looming possibility as city officials move toward capping the number of days they can rent out a listing, part of a set of new rules proposed for a booming short-term rental industry. In Los Angeles, one of the world’s biggest tourist markets, Airbnb alone generates $670 million a year by the company’s count.