KELLY MCEVERS, HOST:
There's a new number out today that shows things are continuing to get better for the middle class in the long recovery from the Great Recession. The Census Bureau says the median household income rose last year to just over $59,000. And at the same time, the poverty rate was down in 2016 and fewer Americans were without health insurance. It's the second year in a row that things have improved. With us to talk about all this is NPR economics correspondent John Ydstie. Hi, John.
JOHN YDSTIE, BYLINE: Hi, Kelly.
MCEVERS: OK, so let's start with that median income number. Tell me more about that.
YDSTIE: Well, as you said, the median household income - that's the yearly income of households right in the middle of the income ladder - it rose significantly to $59,039 in 2016. That's the highest median income ever recorded, though the Census Bureau cautions the changes they've made in their survey make historical comparisons very difficult. And it is the second year of very strong growth in incomes. Now, that said, adjusted for inflation, middle American households are still at about the same income level as they were in 2007 just before the Great Recession. And get this, Kelly; they're at the same level they were at the end of the tech boom in 1999. So really, when you zoom out, not much improvement in this century for those middle-income households.
MCEVERS: And we're talking about, though, this improvement in the year 2016. Of course, that was the last year of the Obama administration. I think people will wonder, you know, is this improvement the result of Obama-era policies?
YDSTIE: Well, the folks at the Census Bureau were very careful not to credit specific administration policies. They did say that increased employment is driving these numbers. As more Americans find jobs or move into full-time work, households are seeing their incomes rise.
MCEVERS: So then who benefited from these income increases?
YDSTIE: Well, there's some good news there, too. The increases came across the income ladder and across all age and racial groups, although the gains weren't quite as strong at the bottom. And of course, there continue to be big levels of income inequality, and a measure of that in today's data did not show any improvement.
MCEVERS: The census also reports that poverty declined last year, as I said. What's behind that?
YDSTIE: Right. The number of people living in poverty declined by 2 and a half million in 2016, and the poverty rate fell to 12.7 percent. Now, a quick definition here - a family of two adults and two children officially lives in poverty if its annual income is $24,339 or less. Again, a growing economy and job creation helped lift families above that number. That said, 1 in 8 Americans continues to live in poverty. And that's more than 40 million people in all.
MCEVERS: Wow. Did poverty go down the way median income went up across age and racial groups?
YDSTIE: Yes, it did. Only one demographic group saw poverty increase slightly. That was among people 65 and older. Now, in terms of policies that contribute to the decline in poverty in this area, the Census Bureau does provide data. It shows that programs like Social Security, the earned income tax credit and SNAP, or food stamps, do lift tens of millions of Americans out of poverty every year.
MCEVERS: These federal programs we hear so much about. Finally, there was also data today on health insurance coverage. What's the news there?
YDSTIE: Health insurance coverage increased in 2016. 8.8 percent of Americans were without health insurance. That's a slight improvement. Still, that means 28 million people did not have health insurance last year. And of course, with the future of the Affordable Care Act still up in the air, there's lots of uncertainty about where those numbers will be in the future.
MCEVERS: NPR economics correspondent John Ydstie, thank you very much.
YDSTIE: You're welcome, Kelly. Transcript provided by NPR, Copyright NPR.
