A Lost Decade Into The Great Middle Class Poverty?

Submitted by EconMatters
09/14/2011 23:21 -0400
By EconMatters

In yet another sign that the Great Recession cuts deep and long--the number of Americans living below the official poverty line reached 46.2 million, the highest in 52 years since the Census Bureau started tracking the figures in 1959. The overall poverty rate also climbed to a 17-year high at 15.1%, which means 1 in 6 Americans are living below poverty line largely due to the high unemployment and underemployment rate. The official poverty line for 2010 is defined as an annual income of $22,314 for a family of four, and $11,139 for an individual.


Chart Source: The Census Bureau

The Census Bureau's annual report http://www.census.gov/prod/2011pubs/p60-239.pdf released on Tuesday, Sept. 13 gives a very grim snapshot of American households in 2010. As the U.S. economy expanded 3% in 2010, and corporations reported good profits, the gains are not trickling down to workers. The median household income in 2010 dropped to $49,445, which is virtually unchanged from the level in 1997. Overall, household income has fallen by 6.4% since the recession began in December 2007. (Ok, who was the one declared that the recession "officially" ended in June 2009?)


Chart Source: The Economic Policy Institute

Moreover, income inequality across households also increased between 2009 and 2010. According to CNNMoney, http://money.cnn.com/2011/09/13/news/ec ... =SF_E_Lead adjusted for inflation, the middle-income family only earned 11% more in 2010 than they did in 1980, while the richest 5% in America saw their incomes surge 42%.

NYT quoted Lawrence Katz, an economics professor at Harvard University that http://www.nytimes.com/2011/09/14/us/14census.html

“This is truly a lost decade. We think of America as a place where every generation is doing better, but we’re looking at a period when the median family is in worse shape than it was in the late 1990s.â€