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Household income fell 4.8% during economic recovery, study finds

August 23, 2012|By Ricardo Lopez
  • American household median annual incomes have fallen from $53,508 in June 2009 to $50,964 in June of this year, according to a study by Sentier Research.
American household median annual incomes have fallen from $53,508 in June… (Sentier Research )

American household median annual incomes have fallen 4.8% since the recession ended, from $53,508 in June 2009 -- when the recession technically ended -- to $50,964 in June of this year, a study found.

But for some subgroups, such as African Americans and those without a college degree, the declines were even starker, according to a study conducted by Sentier Research, an Annapolis, Md.-based research group.

The nearly 5% decline during the recovery is even larger than the 2.6% drop in median income during the recession.

That adds to a total drop of 7.2% since December 2007 when the recession began, according to the study. 

"This latest report continues our efforts to help chronicle one important dimension of the economic hardships now being experienced by a large number of American households," wrote co-author Gordon Green. "Based on our data, almost every group is worse off now than it was three years ago, with the exception of households with householders 65 years old and over."

For some, the effects of the recession were much more pronounced: 

-- For households headed by those between the ages of 25 and 34, real median annual income fell 8.9% from $54,520 in June 2009 to $49,659.

-- The opposite occurred for households headed by those 65 to 74 years old. For this age bracket, income rose by 6.5% from $39,548 to $42,113 during the same three-year period.

-- Regionally, the drops were disparate. Households in the West region saw a drop of 8.5% -- from $59,065 to $54,071 -- compared with the Midwest's 1.1% decline.

-- Perhaps the starkest drop was among African American households, which saw median income drop 11.1% from $36,567 to $32,498.

The report also found that in blue states, where Democrats have strongholds, income levels were down 5.2%, compared with red states, which were down 5%. In swing states, median household income dropped by 5.7% to $51,430.

The Sentier Research analysis follows this week's news that the middle class has been steadily shrinking. 

A report by the Pew Research Center found that the middle class fell to to 51% of the population in 2011 from 61% in 1971.

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ricardo.lopez2@latimes.com

Follow Ricardo Lopez on Twitter.

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