The Great Recession in five charts
How brutal has the recession been to U.S. households? Americans are earning even less than they did 13 years ago. That’s according to new Census data released Tuesday, which found that real median income fell to $49,445 in 2010, the lowest number since 1997, and the largest decline in income in a single year of any recession since at least 1967. Poverty rates also rose to a record level: 15.1 percent of Americans are now in poverty, the highest level since 1993. Here are the five most important charts from the Census showing how all of this breaks down.
The first one is probably the most sobering chart of all. Real median income had a record drop between 2009 and 2010, marking an even more rapid decline than in previous recessions. Income had been edging downward since the end of the Clinton administration, but the recent recession essentially wiped out more than a decade’s worth of gains.
That being said, not all households have experienced a decline in income over the past year.
The average incomes of all income brackets have all sunk over the course of the recession, but the downturn dealt more of a blow to the middle-class and the poor. In 2010, the top 10 percent of wage-earners made as much as they did in 2002. By contrast, the 50th percentile hasn’t earned this little since 1996, and the bottom 10 percent since 1994. The last decade has set everyone back, but the richest Americans have been better protected than others. That being said, don’t blame the recession for the inequality gap itself: that trend started, during the mid- to late-1990s.
Now let’s take a closer look at which groups of Americans have been most adversely affected by the recent downturn.
Americans under 35 have seen their income decline from 2009 to 2010, while older workers have largely been shielded during that time — that is, except for middle-age Americans 45 to 54. That’s likely to represent older workers who aren’t able to retire yet, but who’ve had more difficulty than other groups in finding new jobs if they’ve been laid off.
Accordingly, there are also big disparities in poverty according to age: the poverty rate for children under 18 has risen sharply—and is higher than any other age group—while older Americans are even less likely to be in poverty than they were during the start of the recession.
Poverty for Americans age 18 to 64 is at a record high: at 13.7 percent. It’s highest poverty rate for this age group that the Census has on record since 1959. (The next highest rates for this group happened in 2009, then 1983.) By contrast, the poverty rate for seniors is at a record low: in 2009, it was at 8.9 percent, and it’s remained essentially flat since then. Why? It seems that Social Security has provided a safety net that’s weathered the recession: without this income, the poverty rate for Americans over 65 would have risen by 13.8 million, the Census says.
And as bad as things look for other age groups, the safety net has also prevented even more younger Americans from falling into poverty: without unemployment insurance benefits, the poverty rate for other adults would have risen by 2.3 million and children by 900,000.
Finally, the breakdown of poverty by race and ethnicity also showed stark disparities, with a particularly sharp uptick in poverty among Hispanics:
The recession isn’t singularly responsible for these disparities, but in many crippling ways, it’s helped to widen the gap.