Study: U.S. Incomes Fell More During the Recovery Than in the Recession

U.S. incomes declined more in the three-year economic expansion that started in June 2009 than during the preceding recession, according to an analysis of U.S. Census Bureau data by Sentier Research LLC.

Median household income fell 4.8 percent on an inflation- adjusted basis during the so called recovery that began in June 2009, but only fell 2.6 percent during the 18-month economic contraction. Household income is now 7.2 percent below the December 2007 level.

“Almost every group is worse off than it was three years ago, and some groups had very large declines in income,” Gordon Green, who previously directed work on the Census Bureau’s income and poverty statistics program, said in a phone interview. “We’re in an unprecedented period of economic stagnation.”

The  jobless rate hasn’t fallen below 8 percent since February 2009 and the average duration of unemployment increased to a record 41 weeks in November, Labor Dept. data shows. Almost 5.2 million Americans have been out of work for at least six months.

Real median annual household income fell to $53,508 from $54,916 during the 18-month recession from December 2007 to June 2009, according to the firm’s study of income data for the 36- month period ended in June 2012. Incomes kept falling during the 36-month period since then, dropping to $50,964 in June 2012.

“Median annual household income declined significantly for both family and non-family households,” Green and Coder wrote. “Real median annual household income declined more significantly for younger households.”

Incomes for all age groups below 65 years fell, while older Americans saw increases. Incomes for those 55 to 64 fell the most, losing 9.7 percent, followed by the 8.9 percent decline for 25- to 34-year-olds. The two gains were among those 65 to 75, whose incomes rose 6.5 percent, and those 75 and up who experienced an increase of 2.8 percent.

By education, Americans with some college lost the most, with incomes falling 9.3 percent, followed by an 8.6 percent slump for those with associate degrees, the report said. Those without high school degrees lost the least, falling 5.3 percent.

Green is a former chief of the governments division at the Census Bureau, the report said. Coder was chief of the Income Statistics Branch at the bureau, where he oversaw collection and processing of income data and developed new survey methods.


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