US households continue to bleed

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By Leith van Onselen

Two former Census Bureau officials working at Sentier Research have released a new report claiming that median US household income is recovering, but remains 6.5% below its pre-recession level in real (inflation adjusted) terms:

After adjusting for changes in consumer prices, median annual household income declined during the officially-defined recession from $55,480 in December 2007 to $54,478 in June 2009. During the “economic recovery”, as the unemployment rate and the duration of unemployment remained high, median annual household income continued its decline, reaching a low point of $50,722 in August 2011. As of June 2013 median household income had recovered somewhat to $52,098 (seasonally adjusted estimates).

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What is arguably more disturbing is the fact that real median household income is now 7.2% below its January 2000 level:

Compared to January 2000, the beginning point for our monthly statistical series, median annual household income is now lower by 7.2 percent. (All income amounts in this report are before-tax money income and are presented in terms of June 2013 dollars).

Moreover, virtually all groups have been adversely affected by the slump:

Based on our data, almost every group is worse off now than it was four years ago, with the exception of households with householders 65 to 74 years old. For some groups of householders—Blacks, men living alone, young and upper-middle age brackets, part-time workers, the unemployed, females with children present, and those with only a high school degree or some college but no degree—the declines have tended to be larger than average. Changes in educational attainment during the economic recovery have played a key role in the findings, as we describe in the report.”

So much for the much celebrated US economic recovery.

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Comments

  1. Whilst here in Oz, wages have surged over this period. No wonder Ford Aust has announced closure of their manufacturing here. Wages for average auto assembler (relatively low skilled) in Australia with loadings etc close to 6 figures!

  2. The US is a failed state surviving only by printing money.
    War and drugs have been there business for the last few decades. We must concede we do not want to be another USA.
    We need pollies that shout out that we are a sovereign nation NOT a ruled state of the USA!

    I believe we are already owned and operated and our actors are well paid with great super and travel benefits!

    • The question then becomes “Who owns us?”. I remember the comment made on a BBC TV business programme back in 2008, as the GFC took hold – “If the world goes down in a flaming heap, the US wants to make sure it is on top of the ashes”. So are we done in Australasia ‘allowed’ to make our own economic decisions; create our own destiny? I doubt it.

    • Creating a strategic vacuum is a dangerous proposition. One cannot reasonably expect that such a vacuum to remain unoccupied for long (history is perfectly clear about this).

      So who is likely to fill the vacuum if it were created? Russia? China? Do you really believe that we would be better off if that happens? Be careful of what you wish for…..