New research has found that the median U.S. household income declined more in the two years after the recession ended than during the recession. The research, conducted by two former Census Bureau officials, revealed that during the period between June 2009 and June 2011, inflation-adjusted median household income dropped 3.5 percent further than during the official recession.
Household Income Drops 6.7 Percent Post-Recession
Gordon W. Green Jr. and John F. Coder, former Census Bureau officials, wrote a report based on Census data that explored household incomes during and after the recession. They found that starting in June 2009, at the official end of the recession, up to June 2011, the inflation-adjusted median household income fell 6.7 percent to $49,909.
This is a significant drop from the 3.2 percent decrease experienced between Dec. 2007 and June 2009–the official period of the recession as determined by the National Bureau of Economic Research.
Researchers found a possible reason for this is a freeze in pay, which has remained stagnant or even dropped in many cases–a large number of people who lost their jobs during the middle or end of the recession remained out of work for months and took pay cuts in order to be hired again.
A separate study conducted by Henry S. Farber, an economics professor at Princeton, revealed that people who lost jobs in the recession and later found work earned an average of 17.5 percent less than they had in their old jobs.
The Political Blame Game
Some say the reduction in household income is contributing greatly to Americans remaining pessimistic about the state of the economy, the country’s direction and its lawmakers who many Americans believe are only working for their own political gain as the 2012 elections approach.
Of course, it doesn’t help that lawmakers rarely showcase bipartisan efforts and instead play the political blame game. President Barack Obama has recently assailed Congressional Republicans for opposing his $447 billion jobs bill, which includes tax cuts that would increase take-home pay for U.S. households.
On the other hand, Republicans blame Obama for the slump, saying he has issued a boatload of regulations while promising future tax increases that have not only hurt business but dampened consumer confidence.
The Occupy Wall Street demonstrations are showcasing just how frustrated many citizens are with the state of the economy and lack of partnership in Washington. Most Americans would probably feel much better about it all if the elected government officials regularly worked together in the best interest of the country.
