The Average American Family Is Finally Making More Money Than It Did in 1999, but There’s a Problem

First, the good news: After years of stagnant wages, the average American family is finally making more money than it did back in 1999. The median household income in the United States was $59,039 in 2016, according to Census Bureau data. That’s a 3.2% increase from 2015 and is $374 higher than the previous peak of $58,665 back in 1999, after adjustments for inflation. (The Census Bureau cautions that the 1999 and 2016 income figures aren’t directly comparable because of a methodology change in 2013.) In more good news, more people are working than in 2015, and the earnings gap between men and women shrunk slightly.

The numbers are a welcome relief for Americans who have spent nearly a decade trying to recover from the economic shocks of the Great Recession. But behind the relatively rosy income figures are some troubling economic signs. Families at the lower end of the income spectrum are still making less than what they were before the downturn. Incomes for some ethnic groups and races are lagging behind. And millions of people still don’t have health insurance. Things might be getting better overall. But many, many Americans are still struggling.

With incomes on the rise, why can’t everyone get ahead? A look into the Census Bureau data gives us an idea of who’s doing well and who’s getting left behind in our current economy.

1. The biggest income gains in recent years have gone to the top 5%

road sign displaying 'Rich and Poor'

There’s definitely a difference in income increase. | iStock/Getty Images

Median household income rose 3.2% in 2016. That’s not as impressive as the 5.2% increase in 2015, but it’s still good news. But dig a little deeper into the numbers, and things start to look less positive.

Between 2007 and 2016, incomes for the top 5% climbed 8.7%, according to an analysis by the Economic Policy Institute. Meanwhile, incomes for the bottom fifth of Americans fell 2.7% over the same period, while those for the middle 60% were flat.

Next: The analysis revealed another alarming trend when it comes to working Americans’ incomes.

2. Working families are in worse shape than it seems

mother and father working at the breakfast table with their son

The salaries of working families dropped by over $3,000. | iStock/Getty Images

Incomes were higher in 2016 than they were in 2015. But go back further, and it becomes clear that the effects of the last economic downturn are still felt. When researchers at the Economic Policy Institute looked at inflation-adjusted earnings for non-elderly households (or those who get most of their income from work) from 2000 to 2016, they found median incomes had actually dropped by $3,403, from $69,890 in 2000 to $66,487 in 2016. Incomes for this group were up 3.6% in 2016 compared to 2015, but that wasn’t enough to make up for a decline of almost 5% over the past 16 years.

“[T]he last two excellent years should not make us forget that incomes for the majority of Americans have experienced a lost decade-and-a-half of growth,” noted the report’s authors.

Next: Men in particular have had trouble catching up after the recession.

3. Men are still playing post-recession catch-up

man at computer

Many men have had a harder time recovering. | iStock/Getty Images

Men make more money and are less likely to be in poverty than women, according to Census data. But they are having trouble making up for the earnings they lost during the Great Recession. Median earnings for men are still 1.1% lower than they were in 2007, noted the Economic Policy Institute, while women’s earnings are 2.3% higher than they were before the economy tanked.

Men’s earnings are continuing to slip, falling from $51,859 in 2015 to $51,640 in 2016, a decline of 0.4%. Still, the median income for men is roughly $10,000 higher than it is for women.

Next: Tens of millions of low-earning individuals and families are scraping by on poverty-level incomes.

4. More than 40 million people are still in poverty

food bank

Millions are still in poverty. | Joe Raedle/Getty Images

Roughly half a million American families pulled themselves out of poverty in 2016, pushing the poverty rate for this group down to 9.8% from 10.4% in 2015. With the exception of the elderly, poverty rates declined for all groups over 2016. Overall, 40.6 million Americans have sub-poverty level incomes, a significant decline from the more than 45 million who were in poverty in the years immediately following the recession.

Still, the current poverty rate in the U.S. is 12.7%. That’s 1.4% higher than it was in 2000 and is close to the same level seen in 1980, suggesting the country’s not making great progress on eliminating poverty. However, some economists don’t think the official poverty rate is a good measure of how many Americans are actually poor. Using a consumption-based poverty measure, which factors in food stamps, tax credits, and other benefits, poverty actually fell from 3.4% in 2015 to 3% in 2016.

Next: The number of Americans without health coverage is also falling, though millions are still uninsured.

5. Roughly 28 million people don’t have health insurance

doctor exam

The uninsured rate dropped but will likely increase. | megaflopp/iStock/Getty Images

The number of people without health insurance fell to 8.8% in 2016, down from 9.1% in 2015. Twenty-eight million Americans were uninsured in 2016, far below the 18.2% of Americans who lacked health insurance in 2010.

The high cost of premiums is the main reason why some people in the U.S. still lack health insurance, according to the Kaiser Family Foundation. And many more people could opt out of coverage in 2018 if President Donald Trump makes good on his promise to end cost-sharing payments to insurers. Such a move could cause premiums to rise by 20%. And with more uninsured Americans, it’s possible that bankruptcy rates could tick upward again after falling following the introduction of the Affordable Care Act.

Next: An increase in insurance premiums could especially hurt people in some parts of the country.

6. Some regions are doing better than others

boarded-up building

The Northeast hasn’t seen an increase in incomes. | Spencer Platt/Getty Images

Incomes are rising but not in every part of the U.S. Incomes were up 3.9% in the South and 3.3% in the West, but they didn’t significantly change in the Northeast and Midwest. Median income was higher in the West ($64,275) and Northeast ($64,390) than in the Midwest ($58,305) and the South ($53,861). Income declines have been particularly dramatic in the Midwest. Back in 1999, inflation-adjusted income in that region was once on par with the Northeast and the West, noted Bloomberg. Now, it’s significantly lower.

Even starker is the income divide is between people in cities and their surrounding suburbs and those living in rural areas. People living within metropolitan statistical areas had a median income of $61,521, with people living within cities earning $54,834 and those outside the city but in the surrounding area earning $66,319. People who lived outside metro areas had a median income of $45,830, and their income growth was lower than that of their city- and suburb-dwelling counterparts.

Next: When it comes to income, there are also big racial disparities.

7. Some races and ethnic groups are still far behind

Wooden hands with money

There is still a significant wage gap. | iStock.com/Studio_Serge_Aubert

The median income for black households rose 5.7% in 2015, while median income for Hispanic households was up 4.3%. But incomes for both groups still trail that of white Americans by thousands of dollars.

The median income for white, non-Hispanic households in 2016 was $65,041, more than $25,000 higher than the $39,490 median income for black households. In fact, from 2000 to 2016, incomes for black households fell 7.5%, according to the Economic Policy Institute. Hispanic households had a median income of $47,675 in 2016, while the median income for Asian households was $81,431.

Next: Given all those numbers, is it any wonder we still have a pretty serious problem with income inequality in the United States?

8. The income gap isn’t going away

Man in suit with falling money

The rich keep getting richer. | Dean Drobot/Getty Images

More than 50% of all income in the U.S. goes to the top 20% of earners, according to Census data. The second fifth takes another 23%, leaving the bottom 60% with the remaining with about 25%. While income inequality didn’t increase under any of the measures the Census uses to track it, it also didn’t get any better.

Other research suggests the inequality problem in America is only going to get worse in the coming years. Black and Latino households could lose 12% to 18% of their household wealth by 2020, even as white households’ wealth grows by 3%, according to a report from the Institute for Policy Studies. By 2053, black households will fall to zero wealth, the report warned, and the same will happen to Latino households by 2073, resulting in a “racial and economic apartheid state.” While people have some ideas for how to fix the wealth gap, it’s not clear whether those solutions will be enough to solve America’s stubborn inequality problem.