Tags: Household | Income | Recession | Economy

Households Earning Less Income Than When Recession Ended

By    |   Thursday, 22 August 2013 07:21 AM

The average American household is earning less than when the Great Recession ended four years ago, according to a new report.

U.S. median household income, once adjusted for inflation, has fallen 4.4 percent in that time, according to the report from Sentier Research, an Annapolis data-analysis firm headed by two former Census Bureau officials.

The report is based on an analysis of Census Bureau data. Economists view median, or midpoint, income as a key marker for the well-being of the nation’s middle class.

Editor’s Note: Weird Trick Adds $1,000 to Your Social Security Checks

Although U.S. average income has been recovering from its recent low point in August 2011, it remains 6.1 percent below where it stood when the country plunged into recession in December 2007, The Washington Post reported.

Median income has declined by 7.2 percent since January 2000, the report said, which can be viewed as new evidence of the deep economic stagnation the nation has suffered for more than a decade, the Post reported.

Adjusted for inflation, the median income in June 2013 was $52,098. That's down from $54,478 in June 2009, when the recession officially ended. And it's below the $55,480 that the median household took in when the recession began in December 2007.

Since the end of the recession, the study said, household income has declined for all but a few population groups. Some of the largest percentage declines occurred for groups whose income was already well below the median, like African-Americans, Southerners, people who did not attend college, and households headed by people under age 25.

“Groups with low incomes tended to have steeper declines in income,” Gordon W. Green Jr., who wrote the report with John F. Coder, a colleague at Sentier Research, which specializes in analyzing household economic data, told The New York Times. 

The report says nearly every group is worse off than four years ago, except for those 65 to 74. Some groups have experienced larger-than-average declines, including blacks, young and upper-middle-aged people and the unemployed.

“Median income is affected by trends in inequality, and you are seeing that to the extent there has been income growth in the past decade, it has disproportionately gone to those at the top and very top,” Gregory Acs, director of the Income and Benefits Policy Center at the Urban Institute, a research organization, told the Post.

“It is not uncommon in a bad recession to see significant drops in median household income,” Acs said. “But what is a bit surprising here is how long it is taking to recover.”

The figures, adjusted for changes in the cost of living over time, include income before taxes and exclude capital gains, the Times reported. The number of households with income above the median is the same as the number below it.

Editor’s Note: Weird Trick Adds $1,000 to Your Social Security Checks

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Economy
The average American household is earning less than when the Great Recession ended four years ago, according to a new report.
Household,Income,Recession,Economy
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2013-21-22
Thursday, 22 August 2013 07:21 AM
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