It's the first time since 2007 that the situation in all those metrics didn't worsen.
Compare, for instance, that new median household income figure with 1999, when it was $56,080 in inflation-adjusted terms. As Anne Lowrey at The New York Times points out the overall economy grew 28 percent from 1999 to 2012. Since December 2007, when the economy took its most recent plunge, median household income is down about 8.3 percent.
It hasn't been so bad for every economic tier. Raise your hand if you know which one I'm talking about.
The majority of Americans believe they have "hardly recovered" from the recession. And they're right. While the top 10 percent of Americans have gotten back almost to where they were when the recession began, the majority have yet to make up the lost ground. Not just from the impact of the recession. As Lawrence Mishel and Heidi Shierholz at the liberal Economic Policy Institute noted in August:
According to every major data source, the vast majority of U.S. workers—including white-collar and blue-collar workers and those with and without a college degree—have endured more than a decade of wage stagnation. Wage growth has significantly underperformed productivity growth regardless of occupation, gender, race/ethnicity, or education level.You can read more analysis below the fold.
In response to the report, Jared Bernstein, a former economics adviser for the Obama administration now at the center-left Center for Budget and Policy Priorities, wrote Tuesday:
GDP grew almost 3% last year, yet today’s report shows that the economic recovery has yet to lift the living standards of middle and low income families. Certainly, arresting the drop in middle-incomes and the rise in poverty that had been the pattern since the downturn took hold in 2008 is a plus and the first step to reversing those unfavorable trends.When population aged 16-64 only is taken into account, median household income rose in 2012 by $551.
But the lack of income gains in the middle and bottom of the scale amidst an economic expansion that’s three years old is an important and notable finding from the report. Surely, many American households can reasonably ask, “what recovery?”
As can be seen in the chart above, there are wide gaps based on race. And on gender as well. Women earn just 77 cents for each dollar a man earns, the bureau noted in its 82-page report.
It's argued that the bureau's methodology understates income because it does not include benefits from food stamps or housing subsidies. But it also doesn't include capital gains, which is the arena in which the top economic tier of Americans makes a significant proportion of their income.
“The poverty rate is still very high by historical standards,” said Isabel Sawhill, a senior fellow at the Brookings Institution in Washington who studies poverty issues. “The good news is that it is likely to decline as the economy recovers over the next decade. The bad news is that it’s unlikely to get back to its 2007 level—12.5 percent—until the middle of the next decade, according to our projections.”Unless government policies are changed, however, at the current rate of job growth, it will be the middle of the next decade before the level of employment is restored to where it was when the Great Recession started. And given even the longest period between recessions in the past, we'll be submerged in another one long before then.