A new analysis of household income reveals some statistics that might be counter-intuitive. The study, authored by former Census Bureau economists Gordon W. Green Jr. and John F. Coder and published by Sentier Research, shows that median income for Americans has decreased more sharply during the economic recovery than during the recession.
The survey that presented these results focuses on monthly income data, which the study’s authors believe are more accurate than the popular annual data. The monthly data is more recent, helping to contribute to more potentially accurate results. Also, the annual data is subject to a “telescoping” effect, wherein respondents are more likely unable to correctly identify the timing of financial changes.
When the recession began in December 2007, the median salary was $55,309. This figure was down to $49,909 by June 2011, the most recent period with monthly data available.
It’s always interesting to look at data reflecting the economy as a whole, but most of the time, the only data points that matter are the specific conditions that affect your household. While the economy is slowing down, if a family has been able to increase income through negotiation, a strategic carer move, excellent performance, or picking up extra work on the side, the overall economy’s failure doesn’t matter.
It’s probably because I’m paying more attention now, but it seems like the economy is a significantly bigger piece of the news cycle than it ever has been. The economy has been the primary issue for politicians as well, replacing war and social issues. As someone who writes about personal finances, I can’t complain about this trend, but I often need to remind myself that macroeconomic issues aren’t that connected to people’s day-to-day experiences. It does trickle down. For example, the economy suffers and the financial industry suffers with it. With a sluggish industry, financial companies are less likely to hire or offer competitive salaries and benefits, protecting profits as much as possible for shareholders. Financial firms increase fees, fire customers, and make life difficult for employees.
At the individual level, these changes might not matter. I can move my money to an account that doesn’t charge fees. I can find a new job or find ways to supplement my income.