Sunday, 13 September 2009

No gain in US median income in a decade

The slide above comes from a recently published study by the US Census Bureau and the full report is available here .
One of the highlights from the report is as follows:

The typical American household made less money last year than the typical household made a full decade ago.
David Leonhardt discusses the report in the Economix section of today's New York Times (Sunday, September 13, 2009) and here is just the flavor of what are some disturbing statistics from the Census Bureau's report

Median household fell to $50,303 last year, from $52,163 in 2007. In 1998, median income was $51,295. All these numbers are adjusted for inflation.

In the four decades that the Census Bureau has been tracking household income, there has never before been a full decade in which median income failed to rise. (The previous record was seven years, ending in 1985.) Other Census data suggest that it also never happened between the late 1940s and the late 1960s. So it doesn’t seem to have happened since at least the 1930s.

And the streak probably won’t end in 2009, either. Unemployment has been rising all year, which is a strong sign income will fall.

What’s going on here? It’s a combination of two trends. One, economic growth in the current decade has been slower than in any decade since before World War II. Two, inequality has risen sharply, so much of the bounty from our growth has gone to a relatively small slice of the population.

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