Household Incomes Rise Faster Than Inflation Rate

The economic expansion is finally paying off for most Americans.

Between 1994 and 1995, for the first time in six years, the income of the typical household in the United States beat inflation.

The Census Bureau reported yesterday that the median income of households - the number where there are as many households earning more as earning less - reached $34,076, or 2.7 percent higher than the 1994 inflation-adjusted amount of $33,178.

It was good political news for President Clinton. He can claim that his administration has boosted the prosperity of Americans.

"This is another in a seemingly unending parade of good economic indicators President Clinton will be cashing in on - and who wouldn't?" says Jared Bernstein, an economist with the Economic Policy Institute, a liberal think tank in Washington.

Economists, he notes, may debate whether any president has much responsibility for economic events. Nonetheless, the news does challenge the accuracy of claims by the campaign of Republican candidate Bob Dole that family income has fallen under Clinton.

The Census Bureau report, an annual event, also indicated:

* Poverty fell in 1995 by 1.6 million to 36.4 million. "This is a big drop," says Mr. Bernstein.

Also, the poverty level declined from 14.5 percent of the nation's population in 1964 to 13.8 percent in 1995, notes Daniel Weinberg, a Census Bureau expert.

* Despite the economic progress, the median household income has not yet recovered to its 1989 level of $35,421 (in 1995 dollars), just prior to the last recession. But selected groups did beat their 1989 incomes. These include households in the Midwest, African-American households, family households maintained by women with no husband present, and households maintained by people aged 55 to 64.

Moreover, notes Bernstein, median earnings - what people earn from work and not from investments or savings - of full-time workers is down slightly. This suggests, he says, that "the median family [with a full-time worker] continues to work longer for less."

* The number of people without health insurance coverage in 1995 was 40.6 million, or 15.4 percent of the population, both unchanged from 1994. The proportion of poor people without health insurance coverage was 30.2 percent, also not different from 1994.

* The increase in real income was "pretty broad-based, covering both family and nonfamily households," says Mr. Weinberg. "This is the first time since these distinctions were made in 1980 that an increase in median income has occurred for all types of households."

* For the first time, the Census Bureau presented poverty and income estimates for immigrants. The poverty rate of native-born populations declined from 13.8 percent in 1994 to 13 percent in 1995, while the rate among foreign-born individuals remained unchanged at 22 percent. The real median income of households maintained by a person born in the US rose by 3.1 percent, to $34,784, between 1994 and 1995. By comparison, the median income of foreign-born households was unchanged at $28,352.

* Poverty among children fell from 15.3 million to 14.7 million. The poverty rate for children slipped from 21.8 percent to 20.8 percent. But 49 percent of the nation's poor in 1995 were either under 18 or 65 and older.

* The number of poor families, versus individuals, slipped from 8.1 million to 7.5 million.

* The poverty rate decreased for both whites and African-Americans, but remained unchanged for people of Hispanic origin or for Asians and Pacific Islanders. The majority of poor people in 1995 were white (67 percent), and 45 percent of the poor were non-Hispanic whites.

* The 1995 annual real median earnings of women working year-round, full-time was $22,497, while the real median earnings for men was $31,496.