In general the economy has been growing since Obama took office, but Republican tax cuts and other regressive measures meant that virtually all of that gain has been going exclusively to the wealthiest people. Even though the average household income was going up, the vast majority of American households were not benefiting.
A more significant measure is the median income — the income at which half of all Americans make less, and half make more. So it is very good news that the Census Bureau just reported that the incomes of typical Americans rose in 2015 by 5.2%, the first gain to middle-class pay since the Great Recession and the fastest increase ever recorded by the federal government.
This leaves the median income only 1.6% below where it was in 2007, the last year before the recession, and 2.4% below the all-time high reached in 1999 (all figures adjusted for inflation). Which means that if we only get half the growth this year that we did last year, we will exceed the record high by the time Obama leaves office. We don’t have the numbers yet, but we may already have.
The poor are doing better as well. The poverty rate fell 1.2% to 13.5%, the biggest drop since 1968 (in the aftermath of Lyndon Johnson’s Great Society, which introduced Medicare, Medicaid, Headstart, Community Action, and many other programs whose goal was the elimination of poverty and racial injustice).
Indeed, incomes rose for every age group and every race in every part of the country. And in a stunning reversal of recent trends, incomes rose fastest for the non-wealthy, so the gap between the rich and the poor actually got smaller in 2015!
In his debate against Carter in 1980, Reagan famously asked Americans “Are You Better Off Than You Were Four Years Ago?“. That rhetorical question is credited as cementing Reagan’s victory in the election. Today, the great majority of Americans are already better off than they were four years ago. They are also better off than they were eight years ago, and by the end of the year, they may well be better off than they have ever been.
The irony is that when Republicans are asked about the economy, their opinion sours when Obama’s name is mentioned. In a large poll of Republicans, half were asked to compare the current economy to what it was “when President Obama was first elected” and half were asked to compare it to “the year 2008”. Obviously, these dates are identical. Nevertheless, Republicans were 19 points more likely to say their personal financial situation had gotten worse, and 20 points more likely to say that the economy as a whole had declined, when asked the question that included Obama’s name.
Obviously, facts won’t matter to those people. But for those of us living in a place called reality, we really are better off.