“Despite 2011’s marking the second full year of the recovery, poverty continued to rise in many regions. An estimated 335,760 people fell into poverty in California alone last year, pushing up the state’s poverty rate to 16.6%… [Further] with jobs scarce, many Americans have accepted pay cuts to take available jobs.”
That doesn’t sound so good now does it?
Article below by Josh Mitchell of the WSJ:
The income of the typical U.S. family fell or was flat in almost every state last year, with the drop particularly steep in places where the economy has been hit hard by the housing bust.
The median annual household income—the point on the income scale at which half earn more and half earn less—fell in 18 states in 2011 from a year earlier after adjusting for inflation, according to a Census Bureau report to be released Thursday.
The sharpest drop occurred in Nevada, where median income fell by 6%. The median fell by 3.8% in California and by 2.9% in Arizona and Florida. Those four states are among those that have seen the biggest falls in home values and housing construction since the financial crisis, and where Americans are still struggling with the resulting heavy debt and high unemployment.
Nationally, the median income dropped by 1.3% to $50,502 in 2011. A separate report last week reported a slightly different median income level, but either way, the number is at a level last seen in the mid-1990s, continuing a long period of stagnant or falling wages since an all-time peak in 1999.
Last week’s report focused on the national picture of income and poverty, while Thursday’s data provide detail on the health of the recovery at the state and local level. It shows that despite 2011’s marking the second full year of the recovery, poverty continued to rise in many regions. An estimated 335,760 people fell into poverty in California alone last year, pushing up the state’s poverty rate to 16.6%. Poverty is defined as an annual income of $23,021 or lower for a family of four.
“These are also the states that boomed the most, so we’re talking about a higher peak to fall from,” said Rakesh Kochhar, an economist at the Pew Research Center.
These regions are still suffering from the aftereffects of the financial crash, which left a glut of housing that depressed home values, Mr. Kochhar said. Many families have seen their wealth decline as a result and have cut spending, which in turn has hurt businesses. Companies, in turn, have put off hiring.
With jobs scarce, many Americans have accepted pay cuts to take available jobs. Donna Durham, 57 years old, of Lakeland, Fla., is earning $2 an hour less than she was making before the recession, when she worked full-time as a machine operator at an embroidery shop. Since being laid off during the downturn, she has rotated among three part-time jobs and now makes about $1,700 a month before taxes—barely enough to keep up with her bills. “I work all the time, odds and ends jobs, whatever I can find,” Ms. Durham said.
Ms. Durham earned a diploma at a technical school in 2009 in hopes of landing a job designing architectural blueprints with computer software. Those jobs have been taken by laid-off engineers who settled for lower salaries, Ms. Durham said.
In Lakeland and Winter Haven, a region in central Florida, the median income fell by 5% last year to $40,272—the steepest decline among any large metro area in the state.
The Census report is part of the American Community Survey, a continuous report that collects a wide range of demographic, social, economic and housing data. It samples more than 3.3 million addresses per year.
Median income fell in 18 states last year, against 35 that saw drops in 2010. Maryland had the highest median income last year, at $70,004, while Mississippi had the lowest, at $36,919.
One outlier was Vermont, the only state to register a statistically meaningful increase. The typical family’s income rose 4% to $52,776, the data show, while the state’s poverty rate fell
Art Woolf, a University of Vermont economist, said the state’s small population—about 626,000—makes it prone to larger-than-usual swings in the data.
Nonetheless, he said the Census data on income are consistent with a similar rise in state-tax revenue. Mr. Woolf said Vermont’s birthrate has historically been low and that younger workers are fleeing the state for warmer and more-populous areas. That has left a relatively small pool of job seekers for available jobs, pushing up salaries, he said. The state’s unemployment rate for July, 5%, was among the lowest in the nation.