Household Income Declines for Second Year in a Row

by Patrick Brennan

The Census Department released their 2011 report on household economic status yesterday, and predictably, it’s depressing news: Real household income declined for the second year in a row, this time by 1.5 percent:

That number now sits 8.9 percent lower than it did before the recession, in 2007. Incomes dropped most precipitously in the West, by 4.1 percent (versus 1.5 percent in the Northeast and 2.1 percent in the Midwest), while they were essentially unchanged in the South, with a 0.1 percent increase (regional numbers are somewhat unreliable, though). And for all the talk about the “End of Men,” median incomes for full-time-employed men and women decreased by the same amount, 2.5 percent.

Shares of aggregate income for the bottom four quintiles decreased by between 1.2 and 1.8 percent, while the share for the top quintile increased 1.6 percent, and for the top 5 percent, by 4.9 percent, although that’s a less reliable number. Most of these numbers change very little when you look at equivalency-adjusted income, which (basically) adjusts for the number of people in a household, a more accurate measure that often reduces apparent inequality. When you take that into account, though, the bottom quintile’s change is dramatically different, with no decrease at all, actually a 0.1 percent increase. This is consistent with a decades-long pattern in which inequality has grown between the middle and the top, but not the middle and the bottom, so to speak.

The poverty rate remained constant, at 15 percent (after increasing in the three preceding years). That didn’t change across most demographics, including various household statuses: The poverty rate for married couples remained at around 6 percent, while it sat at 32 percent in single-mother households, and about 16 percent among single-father households.

The share of the population covered by health insurance did, happily, increase, from 83.7 percent to 84.3 percent. That increase of 3.6 million persons, however, appears to be entirely attributable to the increase in government-insurance rolls, which swelled by 4 million (raising that share of the population from 31.2 percent to 32.2 percent).

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