WASHINGTON -- Household incomes declined for the fourth straight year in 2011, the U.S. Census Bureau announced on Wednesday, in another reminder of the economy's failure to recover from the worst recession since the Great Depression.
In its annual economic snapshot, the Census Bureau reported that the median household income -- half of Americans made more, half made less -- fell 1.5 percent to $50,054 last year, using inflation-adjusted dollar amounts. Incomes have fallen 8.1 percent since 2007, the year before the Great Recession got started (it ended halfway through 2009).
Doug Walter of Ivyland, Pa. spent most of his career earning between $55,000 and $60,000 a year working in the parts and service departments of car dealerships. "I was an average middle-class white guy," Walter, 45, said in an interview.
In 2009, many car dealerships closed as the American auto industry plunged into bankruptcy. Walter and his wife both became unemployed. "It sucked," he said.
After two years of joblessness, Walter finally gave up on finding a new job, so he started his own business -- a consignment store in Warrington, Pa.
"Couldn't find [a job], so I made one," he said, adding that the business has supported itself but not turned much profit so far. "I'm hoping that by the end of this year or beginning of next, I'll be able to structure a salary for myself."
Walter said he expects to earn something somewhere near the poverty line this year, which the Census Bureau set Wednesday at $23,201 for a family of four. Not what he used to make, but better than nothing.
And not unusual: Most workers who have become re-employed after losing long-held jobs in the past three years have found themselves earning less money than before, the Labor Department said in August. According to the National Employment Law Project, 60 percent of the jobs lost in the Great Recession paid middle wages, while the 58 percent of the jobs created in the recovery pay low wages.
Persistently high unemployment is helping keep wage growth down. Scott Pickard of Long Beach, Calif. said he is earning $8,000 less than his $78,000 former salary following a three-year unemployment spell he described as devastating.
"When I hit three-year mark, that was rock bottom," he said. "I was not having very healthy thoughts."
Pickard, 50, said he kept his sanity and eventually found work in April as a staff training specialist at a local university thanks to relentless networking and frequent meetings with other unemployed people. "If I were sitting in front of a computer and just sending out resumes," he said, "I would have gone nuts."
Pickard stressed that he considers himself to be much better off than some others, saying his income reduction is marginal compared to losses suffered by people he knows. Of course, he would have been better off without the long unemployment spell. "To the extent that had I not been laid off and would have continued in my career without the interruption," he said, "I would probably be making six figures at this point."
Workers are not reaping the gains of their extra productivity.
Worker productivity grew 11 times more quickly than worker pay between 1979 and 2011: While <a href="http://stateofworkingamerica.org/fact-sheets/key-findings/" target="_blank">worker productivity rose 69 percent</a>, median hourly compensation rose just 6.5 percent, according to the Economic Policy Institute. [Chart credit: <a href="http://stateofworkingamerica.org/chart/swa-wages-figure-4u-change-total-economy/" target="_hplink">Economic Policy Institute</a>]
CEO pay has skyrocketed.
Maybe it's time to consider your CEO's massive pay package as a cut out of your own paycheck. <a href="http://stateofworkingamerica.org/wages/" target="_hplink">CEO pay is more than 200 times</a> that of a typical worker, up from 30 times that of a typical worker in the late 1970s, according to the Economic Policy Institute.
There aren't enough jobs.
At its current rate of job creation, the U.S. will not return to its pre-recession unemployment rate of around 5 percent before 2020, according to the Economic Policy Institute.
Job growth was slow even before the recession.
From the Economic Policy Institute: "The business cycle from 2000-2007 is the weakest full business cycle on record for job creation, due to the fact that demand was insufficient to drive overall GDP gains that were robust enough to generate strong job growth." It appears that the middle class squeeze has hurt job creation and economic growth.
We are poorer than we could be.
Households in the middle fifth of income distribution would have been making $18,897 more per year as of 2007 if their incomes had grown as quickly as overall average incomes between 1979 and 2007, according to the Economic Policy Institute. (The sizable income growth for top earners since 1979 skewed the overall average.)
The rich have captured most income growth.
The top one percent captured 60 percent of total income growth between 1979 and 2007, while the bottom 90 percent was left with just 9 percent of the total, according to the Economic Policy Institute. Moreover, the top one percent's incomes rose 241 percent, in contrast to 11 percent growth for the bottom fifth and 19 percent growth for the middle fifth. [Chart credit: <a href="http://stateofworkingamerica.org/chart/swa-income-figure-2a-real-median-family/" target="_hplink">Economic Policy Institute</a>]
Wages have grown more quickly for the rich.
Wages for the top one percent spiked 131 percent between 1979 and 2010, while wages for the bottom 90 percent of workers rose just 15 percent over that same period, according to the Economic Policy Institute. [Chart credit: <a href="http://stateofworkingamerica.org/chart/swa-wages-figure-4h-change-real-annual-wages/" target="_hplink">Economic Policy Institute</a>]
The poorest Americans are earning less than in 1979.
Americans in the bottom tenth of the wage distribution earned less last year than the lowest earners did in 1979, accounting for inflation, according to the Economic Policy Institute. Meanwhile, the real wages of the median worker rose only 6 percent between 1979 and 2011.
The American Dream is eroding.
"Families headed by early baby boomers (born between 1945-1954) are the last generation (on average) to achieve higher living standards than the one that preceded them," the Economic Policy Institute says. Among families with incomes below $28,000 in 1994, less than 1 percent made it to the top fifth of incomes 10 years later, according to the Economic Policy Institute.
This has been a lost decade.
On average, hourly pay has not grown at all since 2002 for workers with a college degree or with only a high school degree, according to the Economic Policy Institute. Wages have not grown for college graduates in nearly every occupation, and college graduates in the 70th income percentile or lower have had stagnant or falling wages since 2000. [Chart credit: <a href="http://stateofworkingamerica.org/chart/swa-wages-figure-4a-change-total-economy/" target="_hplink">Economic Policy Institute</a>]