The New York Times reported this morning that the only group that saw an increase in household income since the recession were households 65 and older, who saw an increase of 5.5 percent between 2007 and 2010. The Times opined that, “Such data is likely to feed longstanding debates about generational equity, since the largest portion of safety net spending goes to those 65 and older…” But a closer look at the table in the article shows that older households still have incomes roughly half those of households in their prime working years.
The Times correctly notes that income growth for this group reflects the fact that they are less affected by the weak economy since much of their income comes from Social Security and pensions. The Times notes that “the generation now retiring has been the most prosperous in history” and the growth in their incomes reflect this. However, the article should have made clear that each generation of seniors is normally better off than preceding generations due to economic growth, though this pattern may not hold true in the future, especially if Social Security benefits are cut.
The Times should also have added that older households saw a sharp decline in net worth due to the stock market and housing collapse, a fact not reflected in Census income measures. Though households in all age groups were affected by the collapse of these asset bubbles, older households have less time to make up their losses.