Noted in yesterday’s look at how median household incomes are finally rising was that, at least nationally, the lowest incomes increased by the largest amount. That was based on the CPS data available for the U.S. In the ACS data, which we have at the local level you can do something similar as well, which brings us to the latest edition of the Graph of the Week.
In 2015, incomes for Oregonians in the bottom quintile — the 20% of households making approximately less than $23,000 per year — increased by the largest percent. This amounted to nearly a 7 percent increase after accounting for inflation. Gains were relatively even for the rest of the income distribution. In fact this pattern of strong gains at the bottom end, plus relatively even gains for everyone else is seen in Oregon data since the depths of the recession, or so far in recovery. These gains are predominantly due to the improving labor market where wage gains are increasing as the market becomes tight.
UPDATE: The graph below and percentages listed were incorrectly calculated in the original post. The issue was using the wrong year for inflation-adjustment. What follows is a corrected version. The overall story remains the same, although the exact details do differ. Apologies for the error.
However, when looking at income changes from before the Great Recession through today, there is a clear pattern. Those at the highest income levels have seen the best performance. Inflation-adjusted incomes for the top 20% are now nearly 7 percent above their pre-Great Recession peaks. The top 5% have fared even better with gains of 8.1%. On the other hand, incomes for the bottom 20%, even after the big jump in 2015, remain 6.5% below where they were in 2007.
Our office is still unpacking and dissecting the latest data. Stay tuned for more updates in the coming weeks.