Over a Million Households Climbed to Middle Class Under Trump, Census Data Shows

More than 1.2 million American households moved to above $50,000 in annual income between 2016 and 2018, according to Census Bureau data released on Sept. 10, a sign of a growing middle class.

The data is a boon to President Donald Trump, whose platform is centered on a strong economy and promises of increased prosperity.

While in 2016, some 58.5 percent of households enjoyed more than $50,000 in total money income, the share rose to more than 60 percent in 2018. The median household income, meanwhile, rose by nearly 2.3 percent—with all figures adjusted for inflation.

The comparison isn’t quite apples-to-apples since the bureau implemented a new methodology in its latest report that somewhat influenced the results for both 2018 and 2017.

Still, the data bears out a middle-class expansion unseen since the 1960s. Nearly 30 percent of households pulled in between $50,000 and $99,999 in 2018. That’s up from less than 29 percent the year before—the fastest increase since 1968.

Middle Class Woes

America has done a decent job of lifting up its poor, with the number of households earning less than $25,000 a year dropping by about 20 percent since 1968. The improvement is more significant when taking into account that the average household size has decreased from about 3.2 people to 2.5 people in the same period.

Furthermore, the country multiplied its rich (those with households earning over $200,000 year) more than eightfold, to 8.5 percent in 2018 from just 1 percent in 1968.

The middle class, however, had shrunk considerably. While in 1968, over 38 percent of households earned over $50,000 and under $100,000, the percentage dropped to 28.6 by 2014.

Signs of Change

In many respects, 2018 was a significant year for the middle class.

In the first months of 2018, the unemployment rate remained stuck at 4.1 percent, seemingly confirming forecasts of some economists that the 4 percent barrier signifies full employment. But the economy kept adding jobs. By the year’s end, unemployment fell to 3.7 percent, the lowest since 1969. Despite some ups and downs, the rate still stood at 3.7 percent in August 2019.

The progress has been even more apparent for black Americans, whose unemployment rate dropped below 7 percent for the first time in December 2017 and in May 2018 fell further to 5.9 percent. That record held for more than a year until it was also shattered in August as the rate hit 5.5 percent.

Money in Pockets

Another shift happened in wage growth.

In early 2018, it was high-wage industries that had the fastest growth (about 3 percent). But by the year’s end and into 2019, annual growth has been strongest in low-wage industries—about 4.7 percent—according to an Aug. 2 data analysis by Martha Gimbel, research director at job-seeking site Indeed.

It was also those with the lowest education enjoying the fastest wage growth, a July report from the Congressional Research Service showed (pdf).

Less Welfare

Meanwhile, Americans have been weaning themselves off dependency on government programs.

In the first 29 months under Trump, food-stamp enrollment dropped by nearly 6.7 million. That compares with the less than 3.8 million drop under the last 29 months of the Obama presidency, which included a sudden drop of more than 770,000 in April 2016, when work requirements for able-bodied adults came into effect. Prior to that, the requirements were waived by most states, due to the 2008 recession.

Enrollment in Medicaid and CHIP, government-sponsored health insurance for children and the poor, also declined under Trump by more than 2.9 million between January 2017 and June 2019.

Push on China

Trump has benefited from entering office during a period of expansion, yet the economy has also been boosted by his cutting of taxes and regulations. By fostering a pro-business climate, he also sparked optimism for investment.

The economic strength and the resilience of the labor market, in particular, have given Trump room to mount unprecedented economic pressure on China, whose communist regime has long been hurting the United States with unfair trade practices such as forced technology transfer, theft of intellectual property, and currency manipulation.

While negotiations with the regime continue, Trump has been raising tariffs on an increasing share of imports from China and plans to add still more.

The United States has collected tens of billions on the tariffs, though they’ve also led to increased prices of some products for Americans.