Economists will tell you that the recession which began in December, 2007, caused household income to decline 3.2 percent by the time the recession ended in June, 2009. However, two former Census Bureau employees found that two years later, in June, 2011, household income fell 6.7 percent during this 24-month "recovery" period.
President Obama recently termed the present economic situation "an emergency" and urged passage of his tax-cutting jobs bill. Republicans respond that the administration has issued many new regulations and promises high business taxes, a combination that hurts businesses and dampens consumer confidence.
Average income dropped 9.8 percent from the beginning of the official recession in December, 2007, through June of 2011. This is the largest income drop in decades. Gordon W. Green Jr., wrote the report mentioned above with John F. Coder; Green called the decline "a significant reduction in the American standard of living." Both Green and Coder worked for the Census Bureau for over 25 years.
Unemployment dropped from 9.5 percent in December of 2007 to 9.2 percent in June of 2011. Two specific factors seem to be involved in this reduction in income over a period where unemployment, as officially tabulated, has dropped: the number of people outside the labor force (neither working nor looking for work) has increased, and the hourly pay of those working has failed to keep pace with inflation.
During the recession itself, wages outpaced the rate of inflation.
A factor creating wage stagnation is that people out of work during the recession found another job paying less, and they took those lower-paying jobs. Henry S. Farber, an economist at Princeton, found the re-employment pay cut to measure 17.5 percent on average. He said, "As a labor economist, I do not think the recession has ended. Job losers are having more trouble than ever before finding full-time jobs." Farber called the present situation "fundamentally different" than recent recessions.
The average period of unemployment was 16.6 weeks when the recession started in December of 2007. It was 24.1 weeks by June of 2009 when the recession ended. But this period of unemployment expanded to 40.5 weeks by June of 2011.
The National Bureau of Economic Research, an academic group of economists, is recognized as the group deciding when a recession begins and ends. This is the group which defined a recession as beginning in December of 2007 and ending in June of 2009.
The Green and Coder study notes that for groups with lower income, the percentage decline in income after the recession was steeper than the overall average. There were other disparities. Income dropped 7.8 percent for non-Hispanic whites, 6.8 percent for Hispanics, and 9.2 percent for black households. Income adjusted for inflation dropped substantially for those under age 62, changed negligibly for those 62-64, and rose 4.7 percent for households aged 65-74. Wages for private sector workers declined 4.3 percent, declined 3.9 percent for government workers, but dropped 12.3 percent for those self-employed.
Median income dropped 14 percent for households headed by those with an associates degree, 7.9 percent for those with no college, and 6.8 percent for those with a bachelor’s degree or higher.
Summarized from: http://www.nytimes.com/2011/10/10/us/recession-officially-over-us-incomes-kept-falling.html?_r=1&hp
President Obama recently termed the present economic situation "an emergency" and urged passage of his tax-cutting jobs bill. Republicans respond that the administration has issued many new regulations and promises high business taxes, a combination that hurts businesses and dampens consumer confidence.
Average income dropped 9.8 percent from the beginning of the official recession in December, 2007, through June of 2011. This is the largest income drop in decades. Gordon W. Green Jr., wrote the report mentioned above with John F. Coder; Green called the decline "a significant reduction in the American standard of living." Both Green and Coder worked for the Census Bureau for over 25 years.
Unemployment dropped from 9.5 percent in December of 2007 to 9.2 percent in June of 2011. Two specific factors seem to be involved in this reduction in income over a period where unemployment, as officially tabulated, has dropped: the number of people outside the labor force (neither working nor looking for work) has increased, and the hourly pay of those working has failed to keep pace with inflation.
During the recession itself, wages outpaced the rate of inflation.
A factor creating wage stagnation is that people out of work during the recession found another job paying less, and they took those lower-paying jobs. Henry S. Farber, an economist at Princeton, found the re-employment pay cut to measure 17.5 percent on average. He said, "As a labor economist, I do not think the recession has ended. Job losers are having more trouble than ever before finding full-time jobs." Farber called the present situation "fundamentally different" than recent recessions.
The average period of unemployment was 16.6 weeks when the recession started in December of 2007. It was 24.1 weeks by June of 2009 when the recession ended. But this period of unemployment expanded to 40.5 weeks by June of 2011.
The National Bureau of Economic Research, an academic group of economists, is recognized as the group deciding when a recession begins and ends. This is the group which defined a recession as beginning in December of 2007 and ending in June of 2009.
The Green and Coder study notes that for groups with lower income, the percentage decline in income after the recession was steeper than the overall average. There were other disparities. Income dropped 7.8 percent for non-Hispanic whites, 6.8 percent for Hispanics, and 9.2 percent for black households. Income adjusted for inflation dropped substantially for those under age 62, changed negligibly for those 62-64, and rose 4.7 percent for households aged 65-74. Wages for private sector workers declined 4.3 percent, declined 3.9 percent for government workers, but dropped 12.3 percent for those self-employed.
Median income dropped 14 percent for households headed by those with an associates degree, 7.9 percent for those with no college, and 6.8 percent for those with a bachelor’s degree or higher.
Summarized from: http://www.nytimes.com/2011/10/10/us/recession-officially-over-us-incomes-kept-falling.html?_r=1&hp
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