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Compared to 1990s, middle-class working families lose ground in the 2000s

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Snapshot for August 27, 2008.

Compared to 1990s, middle-class working families lose ground in the 2000s

by Jared Bernstein

The economy expanded over the 2000s, and working families were highly productive, as output per hour rose 18% from 2000 to 2007. But despite their contributions to the economy’s growth, middle-income, working-age households—those headed by someone less than 65—lost ground over these years. Their median income, after adjusting for inflation, fell $2,000 between 2000 and 2007, from about $58,500 to $56,500 (2007 dollars).

The trend was very different in the 1990s. After declining in the recession (and the jobless recovery that followed), the median income of working-age households reversed course and rose consistently up through 2000. In fact, over the 1990s (1989-2000) median income was up almost 10%, or about $5,200. Had this 10% growth rate prevailed in the 2000s, the median income of working-age households would have gone up $3,600 instead of falling $2,000.

enlarge imageReal median income for working-age households, 1989-2007

For more analysis regarding the trends in median household income, read the latest EPI Income Picture, which looks at the recent Census Bureau numbers on income, poverty, and health insurance coverage.


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