Median Income Falls to Lowest Since 1995
Citing annual U.S. Census data, on Wednesday, the Financial Times reported that "a closely watched measure of the financial health of average Americans – fell to $50,054 in 2011, or 1.5 per cent below its 2010 level and 4.1 per cent below its score when Mr Obama took office in 2009." According to the Financial Times:
"Real median household income reached its peak at $54,932 in 1999, 8.9 per cent above its current level, under President Bill Clinton and has not been below $50,000 since 1995. Under President George W. Bush, it fell to $52,778 by 2004 before recovering to reach $54,489 in 2007 and then sliding again in 2008."
Below are two charts that accompanied the Financial Times story:
At the American Enterprise Institute's blog, AEIdeas, James Pethokoukis provides a chart, which shows median household income going back to 1959, and clearly shows the Reagan and Obama recoveries. He then notes that "pretty soon after a recession ends, incomes should start rising. But that still isn’t happening this time around." He later updated the post with an analysis from IHS Global Insight that included the following comment:
"The main culprit behind increasing poverty rates and income inequality is the high and persistent level of the unemployment rate. There is a large pool of people in the ranks of the unemployed who have seen their standard of living drop substantially. In addition, many individuals have accepted lower salaries, or part-time employment. People with the least amount of skill are impacted more by the dismal job market."
In their report on the U.S. Census data, CNN/Money added:
"Meanwhile, the national poverty rate eased to 15.0% in 2011, down slightly from 15.1% the year before. Some 46.2 million people fell below the poverty line last year, and one in five children were poor.
"The poverty threshold for a family of four was $23,021.
"Most experts were expecting an increase in poverty, but Census officials said a rise in the number of people working full time helped keep the rate in check."
A sad state of economic affairs. Indeed.