Incomes and Poverty Stable as Wage Stagnation Continues

Modest income growth in 2012 barely begins to offset lost decade driven by financial crisis and decade-long wage stagnation

This morning, the Census Bureau released its report on income, poverty, and health insurance coverage in 2012. It shows that from 2011 to 2012, median household income for non-elderly households (those with a head of household younger than 65 years old) increased 1.0 percent from $56,802 to $57,353. However, that modest growth barely begins to offset the losses incurred during the Great Recession. Between 2007 and 2011, median household income for non-elderly households dropped from $62,617 to $56,802, a decline of $5,815, or 9.3 percent. Furthermore, the disappointing trends of the Great Recession and its aftermath come on the heels of the weak labor market from 2000-2007, where the median income of non-elderly households fell significantly, from $64,843 to $62,617, the first time in the post-war period that incomes failed to grow over a business cycle. Altogether, from 2000 to 2012, median income for non-elderly households fell from $64,843 to $57,353, a decline of $7,490, or 11.6 percent.

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Median household income, all and non-elderly, 1979–2012 (2012 dollars)

Year All households Non-elderly households
1979 $48,520
1980 $46,985
1981 $46,205
1982 $46,082
1983 $45,760
1984 $47,181
1985 $48,063
1986 $49,764
1987 $50,389
1988 $50,776
1989 $51,681
1990 $50,994
1991 $49,529
1992 $49,122
1993 $48,884
1994 $49,429 $57,064
1995 $50,978 $58,566
1996 $51,720 $59,660
1997 $52,784 $60,429
1998 $54,702 $62,878
1999 $56,080 $64,498
2000 $55,987 $64,843
2001 $54,766 $63,844
2002 $54,127 $63,190
2003 $54,079 $62,635
2004 $53,891 $61,901
2005 $54,486 $61,497
2006 $54,892 $62,322
2007 $55,627 $62,617
2008 $53,644 $60,563
2009 $53,285 $59,755
2010 $51,892 $58,211
2011 $51,100 $56,802
2012 $51,017 $57,353

Note: Non-elderly households are households in which the householder is younger than 65 years old. Shaded areas denote recessions.

Source: Current Population Survey Annual Social and Economic Supplement Historical Income Tables (Table H-5)

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Stagnant wages over last ten years

The key driver of these income trends, besides lower employment and hours in the aftermath of the financial crisis, has been wage stagnation. In 2012, the median man working full-time, full-year experienced a slight increase in real earnings of 0.4 percent, from $49,209 to $49,398. The median woman working full-time, full-year also saw a 0.3 percent drop, from $37,893 to $37,791. Looking over a longer horizon, the trends are stark. The median woman working full-time, full year saw her earnings grow from $29,261 in 1973 to $38,548 in 2002, and then stagnate for a decade, to $37,791 in 2012. Since 1973, the median man working full-time, full-year has seen no sustained growth, dropping from $51,668 in 1973 to $50,323 in 2002 and falling further over the last ten years to $49,398 in 2012.

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Real earnings of workers, by gender, 1973–2012 (2012 dollars)

Year Men: Full-time, full-year Women: Full-time, full-year
1973 $51,668 $29,261
1974 $49,833 $29,279
1975 $49,492 $29,110
1976 $49,384 $29,726
1977 $50,454 $29,729
1978 $50,806 $30,199
1979 $50,150 $29,921
1980 $49,378 $29,706
1981 $49,078 $29,071
1982 $48,152 $29,731
1983 $47,942 $30,488
1984 $48,871 $31,110
1985 $49,237 $31,795
1986 $50,482 $32,445
1987 $50,166 $32,697
1988 $49,715 $32,836
1989 $48,865 $33,557
1990 $47,136 $33,757
1991 $48,370 $33,791
1992 $48,419 $34,273
1993 $47,579 $34,028
1994 $47,269 $34,019
1995 $47,118 $33,656
1996 $46,841 $34,551
1997 $48,032 $35,621
1998 $49,722 $36,382
1999 $50,147 $36,264
2000 $49,669 $36,616
2001 $49,640 $37,890
2002 $50,323 $38,548
2003 $50,771 $38,357
2004 $49,591 $37,975
2005 $48,676 $37,470
2006 $48,127 $37,028
2007 $49,958 $38,872
2008 $49,446 $38,119
2009 $50,448 $38,835
2010 $50,497 $38,846
2011 $49,209 $37,893
2012 $49,398 $37,791

Note: Earnings are wage and salary income. Shaded areas denote recessions.

Source: Current Population Survey Annual Social and Economic Supplement Historical Income Tables (Table P-41)

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