American household income dropped nearly 5 percent in economic recovery
Research released Thursday by a firm created by two former Census Bureau officials revealed that U.S. median household income fell almost 5 percent from June 2009, when the last economic recession was said to have ended, through June 2012.
Americans age 55-64 took it on the chin during the post-recession period starting in June 2009, seeing household incomes plunge nearly 10 percent, according to data produced by Sentier Research (PDF). Younger Americans ages 25-34 also saw their incomes drop by nearly 9 percent.
Other age demographics saw smaller income reductions, but the study also revealed that African-American households were hit the worst of all, with median income declining 11.1 percent. In spite of the downturn for other Americans, researchers also found that people ages 65 and older are doing slightly better than they were in 2009.
The overall U.S. median household income in June 2012 was $50,964, the group said, down from $55,470 in 2000 — a key economic indicator that could factor in on the presidential race.
Sentier Research said that shift represents a drop of 7.2 percent since the last full month of President George W. Bush’s second term. The National Bureau of Economic Research said the last recession lasted a total of 18 months, making it one of the longest since World War II. U.S. gross domestic product shrank in 2008 and 2009 by 0.3 percent and 3.4 percent respectively, but rebounded in 2010 with 3 percent growth, marking the end of the recession.
In the period that’s followed, corporate profits and executive pay have set consecutive records year to year, with both hitting yet another all-time high in June 2012, even as wages paid to working people reached an all-time low as a percentage of the economy.
Federal Reserve Chairman Ben Bernanke blamed the economic downturn on a failure by banking regulators to call out institutions for taking on far too much debt risk, which ultimately brought about the economic crisis at the end of 2008. “Stronger regulation and supervision,” he said, would have been “a more effective and surgical approach” to solving the problem than a hands-off approach that only influenced interest rates.
The Pew Research Center said this week that President Obama’s economic policies enjoy a tremendous advantage among poor and middle income voters when compared to proposals by former Massachusetts Gov. Mitt Romney. Among middle-income people, Obama leads 52 percent to 42 percent, and that spread widens to 62 percent versus 33 percent among the poor. His advantage, however, completely disappears among wealthy voters, who overwhelmingly favor Romney.
Another encouraging sign for President Obama: Even though a full 85 percent of middle-income voters told Pew that it is “more difficult” to maintain their lifestyle today than it was 10 years ago, 62 percent of survey respondents said they blame Congress, 54 percent said they blame financial institutions and the banks, and 44 percent blame the Bush administration. Only 34 percent blame President Obama.
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