Median salaries have fallen throughout the economic recovery. Some groups have fared better than others.
Median salaries have steadily declined throughout the economic recovery, registering a greater decline than that realized during the recession, according to a new monthly Household Income Index released for the first time today.
The index, produced by Gordon Green and John Coder, former officials at the U.S. Census Bureau, is intended to supplement data provided every month by the Bureau of Labor Statistics.
Real median salaries have fallen significantly more during the recovery from June 2009 to June 2011 than they did during the recession that occurred between December 2007 and June 2009, concluded the report published by Sentier Research.
Median salaries fell by 3.2 percent (from $55,309 to $53,518) during the recession, but dropped by an additional 6.7 percent (from $53,518 to $49,909) from June 2009 through June 2011. The total decline in median salaries from December 2007 to June 2011 was 9.8 percent.
“A decline of this magnitude represents a significant reduction in the American standard of living,” said the authors.
Families headed by a single adult suffered a greater decline in median salaries, as did households headed by an individual age 25 or younger, according to the index. Real median income for households headed by an adult looking for work declined by 18.4 percent, compared to the 5.1 percent decline for households headed by a working adults. Households headed by a Black individual declined more than households headed by whites or Hispanics.
The report gives new justification for the low investor confidence measured in the most recent research from Millionaire Corner. A small percentage of investors describe themselves as financially better off than a year ago, and less than one-third expect to be better off financially one year from now, in a September survey of 1,100 investors.
More than 40 percent of investors with less than $100,000 say that the country is headed for a double-dip recession, while less than 18 percent of millionaires believe the next generation will be better off than the future generation.
“Our data shows that investors at all wealth levels are feeling pinched by declines in income,” said Catherine McBreen, president of Millionaire Corner. “Even Millionaires, who traditionally possess a high level of confidence, are expressing muted optimism about the recovery.”
The majority of investors feel that the unemployment rate must fall below 6 percent before the economic recovery will gain traction, but few expect significant improvements in the jobs or housing markets in the next 12 months. Our September survey reveals that nearly 56 percent of respondents have a close friend or family member who is looking for work and unable to find a job and only 8 percent believe that Congress and the Obama administration will work together to create a workable jobs plan.