Despite recession, seniors see income gains

By Dennis Cauchon and Richard Wolf, USA TODAY

Senior citizens are enjoying some of the biggest income gains in decades at a time when every other age group is losing ground in the recession, the Census Bureau reported Thursday.

The 31 million households headed by people 65 and older saw their median income rise by a healthy 5.8% in 2009 after inflation and 7.1% since the recession began in December 2007.

Every other age group has suffered income losses of at least 4% during the recession, the data show.

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Seniors got a lift last year from a $250-per-person Social Security bonus included in the federal stimulus program. That helped boost income more than any year since 1973 and led to seniors out-earning 15-to-24-year-olds for the first time.

"Retired folks are sheltered from big swings in the labor market," says Heidi Shierholz, economist at the liberal Economic Policy Institute. Deflation also helped because Social Security checks didn't decline even though prices did, she says.

By contrast, the median income of working-age households has tumbled 4.6% in the recession.

The Census Bureau's annual report on income and poverty is one of the most important benchmarks of the economy. It showed 2009 was a tough year, especially for young people. Other findings:

•Poverty rose. The poverty rate climbed to 14.3% of the population, up from 13.2% in 2008 and the highest level since 1994. The rate measures cash income but not the value of benefits from major anti-poverty programs such as food stamps, Medicaid and the earned income tax credit.

•The ranks of the uninsured grew. The number of people without medical insurance rose 4.4 million to 50.7 million in 2009. Among seniors, who qualify for Medicare, less than 2% lacked insurance, compared with 22% of people ages 18 to 64.

President Obama says the report shows the stimulus softened the blow of the downturn. "A historic recession does not have to translate into historic increases in family economic insecurity," he says.

Robert Rector of the conservative Heritage Foundation think tank counters that the government will spend $950 billion this year on social welfare programs that are smothering job creation.

The median income for all households — old and young, working or not — fell 0.7% last year to $49,777. That was better than 2008, when income tumbled 3.6%, the most since 1947.

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