Recession’s pain reaching deep into the economic recovery
The buying power of Americans continues to be weaker than it was when the recession ended four years ago, underscoring the lasting damage wrought by the downturn, according to a report released Wednesday.
Inflation-adjusted median household income has declined 4.4 percent, to $52,098, since June 2009, the official end of the recession, said the report by Sentier Research, an Annapolis data-analysis firm headed by two former Census Bureau officials.
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Although Americans’ average income has been recovering from its recent low point in August 2011, it remains 6.1 percent below where it stood when the country toppled into recession in December 2007.
Overall, median income has declined by 7.2 percent since January 2000, the report said, offering fresh evidence of the deep economic stagnation the nation has suffered for more than a decade.
Median income, which economists view as a key marker for the well-being of the nation’s middle class, is lagging across education levels and racial groups, the report said. Analysts said the report also reflects the increasing economic polarization apparent in other data.
“Median income is affected by trends in inequality, and you are seeing that to the extent there has been income growth in the past decade, it has disproportionately gone to those at the top and very top,” said Gregory Acs, director of the Income and Benefits Policy Center at the Urban Institute, a research organization.
So far in the current recovery, median incomes are defying efforts by Americans to improve their workforce skills, according to the report, compiled by analyzing data from the Census Bureau’s monthly Current Population Survey. Income is down even though the number of households headed by people who report having a college degree is up sharply since the end of the recession, according to the report.
Between June 2009 and June 2013, the number of American households headed by people holding an associate degree rose 14.7 percent, while the number of those with bachelor’s degree went up 10.1 percent and the number with some college rose 4 percent.
Conversely, the number of homes headed by people who did not graduate from high school dropped 7.9 percent, and the number led by people with just a high school diploma has declined 1.2 percent since 2009, according to the report.
Analysts said those changes probably reflect two facts:
●Americans, particularly those without college degrees, have been slow to move out and establish households in the wake of the downturn.
●Many Americans are working to bolster their credentials to help them navigate a labor market that has seen a pronounced decline in well-paying “mid-skill” jobs.