Skip to comments.Household income drops for 4th straight year
Posted on 09/12/2012 10:18:50 AM PDT by MNJohnnie
The income of the typical American household fell last year for the fourth consecutive year, the longest sustained period of decline since the early 2000s. Americans are now poorer than they were in 1999 after taking into account how inflation erodes the value of the dollar.
Median household income fell after adjusting for inflation to $50,100 in 2011, down 1.5% from a year earlier.
The Census Bureau's annual income report is considered a key indicator of the economic health of the nation and its middle class. Median income is the true middle point of American households half made more, half made less in 2011.
Census also released other key measures Wednesday:
Poverty. An estimated 15% of Americans lived in poverty last year, down slightly from 15.1% in 2010 . That means 46.2 million people were in poverty in 2011. Brookings Institution demographer William Frey says this number is especially important this year because Hispanic children reached an all-time high rate of poverty last year.
Health insurance. The share of Americans without health coverage at any time during 2011 fell to 15.7% in 2011, down from 16.3% in 2010. The drop in the number of uninsured could reflect the early stages of the health care overhaul, such as allowing parents to insure children up to age 26.
The new report offers an imperfect partial answer to the presidential campaign question: Are Americans better off than four years ago? The income numbers show households have not recovered to the level when President Obama took office in 2009 or when George W. Bush was president in 2008 and the recession had begun.
Household income, however, is an imperfect measure of personal finances. The Census Bureau counts as income only cash received on a regular basis, such as wages, Social Security and unemployment checks. It doesn't include the growing value of Medicare, Medicaid, food stamps, the Earned Income Tax Credit, most employer benefits or capital gains from the sale of stocks or businesses.
Still, the numbers provide a detailed picture of how the diverse country is faring.
The report showed a significant increase in income inequality. The income for the top 5% of households those making $186,000 or more rose 5.3% last year. The income of the bottom four-fifths of households fell or was unchanged in different income groups.
Changes at the very top the top 1% of households were greatest of all, said David Johnson, chief of social, economic and housing statistics for the Census. The result was a "widening of the gap between the top and the bottom," Johnson says.
The median income for all households was reduced slightly because of the aging of the population, a trend that is expected to continue. Seniors make less than those in their prime earning years. That reduced the median income of all American households about $200 in 2011, Johnson said.
However, as a group, seniors continue to enjoy income growth, partly because of the steadiness of Social Security and the protection of Medicare from some medical expenses. Median household income rose 2% to $33,118 in 2011 for those 65 and older. By comparison, household income fell 4% to $55,937 for those 55 to 64.
Brian Wooldridge, 39, of Newport, Del., worked in warehousing and inventory control in North Carolina for 15 to 20 years. But when he moved to Delaware about a year ago to care for his mother, he couldn't find a similar job. So now he scours Internet job sites and has a half-dozen temp agencies looking for jobs for him.
"There are jobs out there, but there are so many people applying," Wooldridge said. "You go to one interview, and you've got 50 or 100 other people there. You get to a second interview, and they say they went with someone else with more experience."
This has to stop.
Hey, it seems like half the country would gladly have four more years of this misery to be ruled by that loveable, cool president rather than that nasty old plutocrat Romney.
OK. 15-trillion dollars later9that is, after the War on Pverty began in 1965) we still have the same percentage of Americans living in poverty.
We would have been better off just giving poor folk cash directly, and the Hell with the bureaucrats.
Note it’s not a MSM story.
“4 more years of this?”
Nope. The next four would be worse.
Any real surprise?
The internal war on our country, that started in January of 2009, continues...
This is one of those statistics which can be terribly misleading, and is never well-handled by the ignorant press.
Imagine 100 people, with a linear income distribution from 1 to 100 dollars.
Now, you have bad economic times, and 10 are laid off.
If you lay off the bottom 10 people, what happens to median income? It goes UP. Because you have to HAVE income, and they don’t count ‘0 income’ as a value.
If you lay off the top 10 people, your median income would go down.
If you lay off the middle 10 people, the median income would stay the same, but the income of the “top 5%” would go UP. Why? Because the top 5% would now be around 4 people instead of 5 (4.5 to be exact), so instead of the average being 97.5, it would now be 98. And the bottom half would drop significantly, having lost their 45-50 earners. So you increase disparity.
Of course, if you lost the bottom 10, or the top 10, you would decrease disparity.
Another misleading thing. Suppose you take the same 100 people. And the guy making $1 gets his act together, and ends up making $101. That is a SUCCESS story, right? Now, suppose the guy making $100 runs into bad luck, and has big losses, and ends up making $1 for the year. Well, he was the RICH guy right, so we don’t care.
But according to the statistics, the top 1% just got RICHER. Because the “top x%” is defined based on who is in it NOW. This is the most misleading part of the quintile-based reporting. Because we have tremendous income mobility in this country. A majority of people who in a particular year are in the bottom 5th end up later in the top half. Meanwhile, the top earners retire, so there is a continuing replacement of those “top earners”.
When the media reports statistics over time, saying “the rich got richer”, it is actually a lie. They don’t know if the “2010 rich” people got richer or not, the just know that the richest people in 2012 are richer than whoever the richest people were in 2010.
It is really bad when household income drops in a time where there is rising unemployment, since generally it is the newer workers that get laid off. This shows how bad Obama has screwed up the economy.
The two things that impacted the “health insurance” uninsured drop were most likely the forced insurance of young adults who never needed insurance because they were never sick, and of course the unemployed people who all qualify for medicaid now.
My income is down about 5% since 2008. It was down 10%, but has come back a little this past year.
I'm not complaining, it could be worse. However, when Romney asks "Are you better off than you were 4 years ago?", I can honestly say, "No. No, I'm not. And this is exactly why."
And that's just with regards to salary. Don't get me started on inflation, higher gas prices, the upcoming tax hike, higher health insurance premiums, less corporate benefits, and all the rest of the belt-tightening that I've done. Besides, it ain't just me, it's everyone.
Yep, 1st time in my life that my personal financial picture is worse off in every way after a President’s 1st term. It all is directly related to policies implemented by this President
0bama has taken a bad economic situation and made it much worse for everyone through a combination of incompetence, corruption and ideologically driven arrogance.
Note: the comments on this statistic being misleading have some validity. One would have to look at the data to see whether the drop is bad or good. Still, it’s a fun number . . .
Household income drops for 4th straight year, during Obama’s fourth straight year in office. Like everything else that has gone wrong, that is obviously Bush’s fault, isn’t it?
Not saying that BO is not incompetent, I'm saying that a lot of what he's doing (or not doing) is by design.
However, the beauty of America is that things will eventually get better. Illegitimi non carborundum