Much of the damage has been done since the official end of the Great Recession. From June 2009 to June 2012, median household income fell 4.8 percent, to just under $51,000. This represents a continuation of the middle-class hollowing out that has been underway since the beginning of the last decade. The Great Recession itself caused median household income to decline by 2.6 percent, and since January 2000, when it stood at more than $55,000, household income has declined by 8.1 percent.
Worse still is the two decades-old erosion of median net worth. American households’ net worth has declined from an all-time 2007 high of $126,400 to a mere $77,300 only three years later — roughly what it was all the way back in 1992, at the beginning of the ‘90s tech stock boom. In other words, America has lost an entire generation’s worth of economic growth courtesy of the Great Recession, and isn’t likely to regain it in the foreseeable future.
Meanwhile, from the Pew Research Center comes a similar report, whose figures, though different from those of Sentier Research (calculating complex figures like median household income is not, after all, an exact science), tell a similar tale. According to Pew, median household income has fallen from $72,956 to $69,487 in 2010, and the median household net worth has fallen from $129,582 to $93,150 during the same period. Not only that, there has been “a very steady, long-term shrinkage” of the sheer number of people belonging to the American middle class, according to Paul Taylor, executive vice president for Pew.Continue reading →