Although median income of American households has begun to recover over the last two years, they still have not come close to regaining the purchasing power they had before the financial crisis began, according to a new study.
Although median annual household income rose to $52,100 in June, from its recent inflation-adjusted trough of $50,700 in August 2011, it remained $2,400 lower – a 4.4 percent decline – than in June 2009, when the recession ended, the New York Times reported citing the study.
This drop, combined with the 1.8 percent decline that occurred during the recession, leaves median household income 6.1 percent – or $3,400 – below its level in December 2007, when the economic slump began.
Since the end of the recession, the study by Sentier Research,which specialises in analyzing household economic data, said, household income has declined for all but a few population groups.
Some of the largest percentage declines occurred for groups whose income was already well below the median, like African-Americans, Southerners, people who did not attend college, and households headed by people under age 25.
“Groups with low incomes tended to have steeper declines in income,” Gordon W. Green Jr, who wrote the report with John F. Coder, was quoted as saying by the Times.
Households headed by people ages 65 to 74 were the only group in the study that experienced a statistically significant increase in post-recession income, helped perhaps by the decision of some older workers to remain in the work force or re-enter it.
Households headed by people with only a high school diploma have seen their post-recession income decline by 9.3 percent, to $39,300 in June of this year, the report said.
For households headed by people with an associate degree, median income declined by 8.6 percent in those four years, to $56,400. And among households headed by people with a bachelor’s degree or more, median income declined by 6.5 percent, to $84,700.
Median income declined for households in three of the four major geographic regions, with the South showing the largest decline and the Midwest reporting no statistically significant change, the report said.