Even Worse Than Economic Stagnaton?
Bloomberg's Jeff Kearns reports on an analysis of U.S. Census Bureau data by Sentier Research LLC on Thursday, saying:
"American incomes declined more in the three-year expansion that started in June 2009 than during the longest recession since the Great Depression . . . .
"Median household income fell 4.8 percent on an inflation- adjusted basis since the recession ended in June 2009, more than the 2.6 percent drop during the 18-month contraction, the research firm’s Gordon Green and John Coder wrote in a report today. Household income is 7.2 percent below the December 2007 level, the former Census Bureau economic statisticians wrote.
"Almost every group is worse off than it was three years ago, and some groups had very large declines in income,” Green, who previously directed work on the Census Bureau’s income and poverty statistics program, said in a phone interview today. “We’re in an unprecedented period of economic stagnation.”
More precisely, Kearns wrote:
"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."
Meanwhile, in an editorial this weekend, the Wall Street Journal was even more precise -- entitled "Negative $4,019" (subtitled, "The Obama years have been brutal on middle-class incomes.")." The editorial began this way:
"The Presidential race is boiling down to one dominant issue: which party's policies will do more to help the financially stressed American middle class. President Obama's campaign theme is that Mitt Romney and the Republicans cater to the rich, while Mr. Obama cares about struggling families.
"He may care, but he sure hasn't done much for them. New income data from the Census Bureau, tabulated by former Census income specialists at the nonpartisan economic consulting firm Sentier Research, reveal that the three-and-a-half years of the Obama Presidency have done enormous harm to middle-class households."
The following chart is from the Journal's editorial:
Think it can't get worse? You could be wrong, however. The Wall Street Journal's economic blog reports that "new jobs come with lower wages," citing a new Labor Department report. The blogger, Sudeep Reddy wrote:
"From 2009 to 2011, 6.1 million workers lost jobs they had held for at least three years. Just over half — 56% — of them were reemployed by this January, the department found in its latest survey of displaced workers. Two years ago, the survey found that 49% of people who lost such jobs from 2007 to 2009 were reemployed.
Could the "fiscal cliff" and Taxmageddon be even worse than the Great Depression?