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Chart: Median household incomes have collapsed since the recession

Catherine Rampell of Economix points to a new report (pdf) from Sentier Research showing that median household income has plummeted 7.3 percent since the recession began:

Back in 2007, median household income was $55,438. That's declined to $51,404 in February 2013. Those numbers are pretax and adjusted for inflation and seasonal factors.

A few other things to note:

1) Yes, median incomes have risen since 2011, but they fell last month. Median household income dropped about 1.1 percent between January and February of 2013, largely due to a sharp uptick in inflation driven by higher gasoline prices.

2) Average hourly earnings for private employees appear to have roughly returned to their pre-recession levels. But that's an average, not a median. And as we've noted before, the recession has put a lot of downward pressure on wages: The majority of jobs lost in the recession were mid-wage jobs, and they've been replaced by low-wage jobs.*

3) Another big reason why median incomes haven't yet rebounded is that there's still lots of unemployment — plus the fact that there are millions of Americans who have been discouraged from seeking work due to the terrible economy. (These are known as "marginally attached" workers.)

4) It's also worth pointing out that median household incomes stagnated all through the 2000s, even before the recession. The typical household wasn't getting any richer even back when unemployment was low. Rampell points to an old post by David Leonhardt offering up 14 possible reasons for the income slump. It's worth reading.

Related: How the recession turned middle-class jobs into low-wage jobs.

* Update: Originally point #2 in this post compared average wages with median incomes, which isn't an accurate comparison, since averages can obscure a lot of variation. I've fixed, and thanks to commenters for pointing out.



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Ezra Klein · March 29, 2013

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