For the first time since the great depression (and possibly even then), US wage earners suffered through A Decade With No Income Gains.
The typical American household made less money last year than the typical household made a full decade ago.
To me, that’s the big news from the Census Bureau’s annual report on income, poverty and health insurance, which was released this morning. Median household fell to $50,303 last year, from $52,163 in 2007. In 1998, median income was $51,295. All these numbers are adjusted for inflation.
In the four decades that the Census Bureau has been tracking household income, there has never before been a full decade in which median income failed to rise. (The previous record was seven years, ending in 1985.) Other Census data [Historical Income Tables] suggest that it also never happened between the late 1940s and the late 1960s. So it doesn’t seem to have happened since at least the 1930s.
Income, Poverty, and Health Insurance Coverage
Inquiring minds are digging into the Slide Show Presentation on Income, Poverty, and Health Insurance Coverage in the United States: 2008
click on any chart to see a sharper image
There are numerous other charts in the slide show on health insurance and poverty levels. Inquiring minds will want to take a look.
David Leonhardt writes “The streak probably won’t end in 2009, either. Unemployment has been rising all year, which is a strong sign income will fall.“
Given that we are likely to have Structurally High Unemployment For A Decade, this trend of stagnant or falling wages can last much longer than most realize.
Here’s something to think about: If the housing boom from 2000 to 2007 produced no sustainable wage increases (if indeed any wage increases at all) what will? After pondering that, think about where home prices are going with poor wage potential and tightened lending standards.
Indeed what does this trend say about price pressures in general?
Mike “Mish” Shedlock
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