New U.S. Census data on poverty provides an opportunity for both Hillary Clinton and Donald Trump to have a deeper discussion about  how to maintain and enhance anti-poverty programs that are proven to work. The New York Times Editorial board hopes candidates take advantage of the good news released this week – 2015 saw the largest annual percentage point drop in the poverty rate since 1999 – to galvanize broad public support for the policies that made it possible.

As the figures show, we know what works. The path forward is clear. For example, the largest income gains in 2015 were among Americans at the bottom of the income ladder. Those gains reflect job growth, which has been supported by the Federal Reserve’s low interest-rate policy; the Fed should stay the course until the job market has returned to full health. The income gains also reflect minimum-wage increases in many states and cities, which have laid the foundation for the federal government to follow suit. The data also illustrate how much worse conditions would be without existing federal programs. Using the “supplemental” measure of poverty that is more nuanced than the official measure, the poverty rate in 2015 was 14.3 percent. Without Social Security, it would have been 22.6 percent, with nearly 27 million more people in poverty. Without the earned-income tax credit and low-income provisions on the child tax credit, the rate would have been 17.2 percent, adding 9.2 million people. Without food stamps, the rate would have been 15.7 percent, adding 4.6 million people. The statistics give the candidates all the evidence they need to make the case to voters that anti-poverty policies work.

Good news for families

Monday’s Census data reveals a strong job market and progressive policies have made it possible for low- and middle-income Americans to make economic gains in 2015.  Jared Bernstein of The Center on Budget and Policy Priorities notes that job growth over the past year has disproportionately helped low-and middle-income workers. Real household income is up 8 percent at the 10th percentile and 6 percent at the 20th percentile. While the news is good, he offers two caveats.

First, one good year does not reverse decades of stagnation. This fact is particularly visible in the real median earnings trend of (full-time, year-round working) men. In 1979, these guys earned about $52,000 per year in today’s dollars. In 2015, they earned about $51,000 (which includes their 1.5% real gain last year). The trend for women is much more favorable over time, which implies some partial closure of the gender pay gap, but their median pay has been largely flat since 2000 (which includes their solid 2.7% in 2015). So let’s be careful not to overlook the deep, long-term challenges still facing many middle-income workers. Finally, inflation was very low last year, about 0.1%. Such uniquely low price growth helped to boost real incomes and lower poverty rates last year. This year, inflation has climbed a bit and is running slightly north of 1%. To be clear, based on continued improvement in the labor market, as well as the continuation of important, progressive policies, including the Affordable Care Act and minimum wage increases, I expect the positive trends you see today to be ongoing as we speak. But based on higher inflation, next year’s report may not be quite as stellar as this year’s version.*

*[I did not say this on the call, but there also likely to be a strong “regression to the mean” effect: outlier results are often followed by ones that are somewhat attenuated.]

 
White House asks Congress for Louisiana aid
The Obama administration has asked Congress to approve $2.6 billion in emergency flood relief for Louisiana. The Advocate’s Elizabeth Crisp reports that Budget Director Shaun Donovan wrote to House Appropriations Committee Chairman Hal Rogers of Kentucky requesting that Congress “provide additional funding to address Louisiana’s unmet housing and  infrastructure needs as soon as possible.”

The letter comes just one day after Gov. John Bel Edwards and Louisiana’s Congressional delegation sent separate letters to President Barack Obama urging him to push for additional aid for Louisiana in response to last month’s catastrophic floods that left 13 people dead and thousands displaced. Leaders are hoping that an aid package will make it through Congress before lawmakers recess for the month, leaving aid up in the air until after the November elections. Edwards is returning to Washington, D.C., on Wednesday to spend the next three days making the case for what he had recently tallied as $2.8 billion in relief. This week’s trip is the second in a series of envoys to seek money for the recovery efforts.

Farmers hit hard
A report by LSU Ag Center economists estimates $277 million in damages to farms as a result of the August flooding in south Louisiana. Rice and soy are two of the most affected crops. Acadiana Business reporter Christiaan Mader says when combined with flooding earlier this year in northern Louisiana, farmers have suffered $367 million this year in flood related losses.

LSU agricultural economist Kurt Guidry reports that soybean and rice combined for roughly $140 million in damage, a sharp uptick from previous estimates which hovered closer to $90 million.“These impacts will likely create significant financial challenges for many agricultural producers who were already under considerable financial stress resulting from low commodity production in 2015 and low commodity prices in both 2015 and 2016,” Guidry told The Advocate.  Back in late August, Guidry and his colleagues predicted total losses of $110 million. At the time, Guidry intimated that the losses could creep closer to $200 based on preliminary reports trickling in from hard hit regions like Vermilion Parish. The most recent numbers exceed Guidry’s previously cited fears. Agriculture commissioner Mike Strain is reportedly headed to Washington D.C. this week to lobby for additional aid.

Number of the Day
5.2 percent – The increase in median income for a typical household in 2015 – the largest increase in median income in both percentage and dollar terms ever recorded, with data back to 1967. (Source: The U.S. Census Bureau via the Center on Budget and Policy Priorities)