Reports from the Economic Front

a blog by Marty Hart-Landsberg

The Lost Decade

Recently released census data offers a disturbing picture of current economic and social conditions.  For example, the inflation-adjusted income of the median household declined 4.8 percent between 2000 and 2009.

Most of that decline took place between 2007-2009, when median household income fell 4.2 percent. Household income normally takes a big hit during recessions.  But, as the Wall Street Journal explains,

there is a difference this time: In the prior three recessions, incomes fell after years of upswing, then resumed growing once the downturn ended. The decline this time comes on top of a long period in which incomes stagnated even through the recovery of 2003 to 2007.

It is worth restating this point—inflation adjusted median household income was falling even when the economy was growing. 

What we are facing is a lost decade. How have people been coping?  The recession has been particularly hard on younger workers and many have been forced to move in with their parents.  Again, according to the Wall Street Journal,

The number of 25-to-34-year-olds living with their parents rose 8.4% to 5.5 million in 2010 from 2008. Within that age group, 42.8% fell below the poverty threshold.

In fact, people of all ages are merging households:  The number of multifamily households rose 11.6 percent from 2008 to 2010, while the total number of households rose only 0.6 percent.

Perhaps one of the more dramatic statistics to emerge from census data is the extent of child poverty.  The percentage of children under six living in poverty rose from 21.3 percent in 2008 to 23.8 percent in 2009.  In other words, approximately one out of every four children under the age of six in this country is living in poverty—and that is according to a definition of poverty that is far from adequate.

The overall percentage of Americans living in poverty rose from 13.2 percent in 2008 to 14.3 percent in 2009—that is the highest rate since 1994.  We are talking about 44 million people or one in seven. Highlighting the continuing importance of racial and ethnic differences, while the poverty rate for non-Hispanic whites was 9.4 percent, it was 25.8 percent for blacks and 25.3 percent for Hispanics. The rate for Asians remained at 12.5 percent.

In case you were wondering, the 2009 poverty line for a single adult was $10,830 in pretax cash income; for a family of four it was $22,050.

Sadly, but not surprisingly, as the New York Times reports:

There are strong signs that the high poverty numbers have continued into 2010 and are probably still rising, some experts said, as the recovery sputters and unemployment remains near 10 percent. . . . One indirect sign of continuing hardship is the rise in food stamp recipients, who now include nearly one in seven adults and an even greater share of the nation’s children. While other factors as well as declining incomes have driven the rise, by mid-2010 the number of recipients had reached 41.3 million, compared with 39 million at the beginning of the year.  Food banks, too, report swelling demand.

Quite a mess.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: