So-called recovery means less income for working and middle class

October 11, 2011 | Economic Opportunity Institute

A recent report by Sentier Research shows real median household income is continuing to decline for the American working and middle class.

The typical household income has lost more income since the economy recovery supposedly began than during the Great Recession itself.

During the official recession, which lasted from December 2007 to June 2009, American household income fell by 3.2%. But in the two year period following the end of the recession, household income fell by an additional 6.7%, down to $49,909 in June, 2011 from a high of $55,309 in 2007.

For the entire recession and recovery period, household income fell by 9.8%. The authors report, based on the annual Current Population Survey, conclude: “A decline of this magnitude represents a significant reduction in the American standard of living.”

The report found that some demographic groups lost more ground than others over the two years from June 2009 to June 2011:

  • Single parent households – often already struggling economically – lost even more compared to married couples. Real median annual household income for family households with a male or female head and no spouse present (many with children in the household) declined by 7.3 percent (from $39,321 to $36,465) compared to a decline for married-couple households of 4.5 percent (from $76,783 to $73,324).
  • Young people lost ground compared to older workers. Real median annual household income for households with a head under 25 years old declined by 9.5 percent (from $32,123 to $29,060) compared to a decline for households with a head 45 to 54 years old of 5.5 percent (from $65,911 to $62,315).
  • African Americans also fell further behind. Real median annual household income for households with a Black head declined by 9.4 percent (from $35,072 to $31,784) compared to a decline for households with a White head of 4.7 percent (from $59,111 to $56,320). The decline for households with a Hispanic head was 4.9 percent (from $41,945 to $39,901).

State level data is not featured in the report, but Washington median household income as measured in the Current Population Survey fell 7.9% between 2007 and 2010, to $56,253. The silver lining: Washington state’s median income remains well above the national level.

Read more: Household Income Trends During the Recession and Economic Recovery >

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Posted in State Economy

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