A decade of falling incomes

If you were born before 1955, you're part of a group that's enjoyed remarkable prosperity. Born later and you're among those who are losing ground at an accelerating pace.

USA Today analyzed U.S. Census data to track just how far incomes have fallen since 2000. The story said:

Household income for people in their peak earning years -- between ages 45 and 54 -- plunged $7,700 to $64,349 from 2000 through 2008, after adjusting for inflation. People in their 20s and 30s suffered similar drops. Older people enjoyed all the gains.

Why is this happening?

• Older people are working longer and have better-paying jobs. Another story says necessity and better health are two factors keeping older people in the workplace.
• Low wages around the world force those in the U.S. to drop.
• A Bloomberg story says that more recently, falling profits have prompted employers to cut wages.
• Social Security and that increasingly rare benefit called a pension plan provide secure income for many older folks. Suddenly the dreaded "fixed income" so many complain about is looking mighty good.

Another key development is that women wage earners are doing better than they used to. The gender gap is closing -- although it's still there. A chart at USA Today shows, for instance, that for those in the 55-64 age range, men lost 11.2% in inflation-adjusted income between 2000 and 2008, and women gained 20.6%.

The Census has produced all kinds of interesting and often depressing information about U.S. households in 2008, the first year of the Great Recession:

• Per capital income declined by 3.1% last year to $26,964, Bloomberg reported. Median household income dropped 3.6% to $50,303.
• The states with the highest median household incomes last year were, in order, Maryland, New Jersey, Connecticut, Alaska and Hawaii. Before you pull up stakes to move to one of those places, a CNN story said, examine the cost of living first.
• However, the median household income last year rose in only five states: New York, New Jersey, Kansas, Louisiana and Texas (where 24% of people don't have health insurance -- compared with a national rate of 15%).
• Also on the health care front, the number of uninsured rose to 46.3 million nationwide, The Wall Street Journal reported, with the biggest increase among families earning between $50,000 and $74,999.
• The percentage of people over age 15 who have never married was 31 last year, up from 27% in 2000. That suggests more people are putting off marriage because of the economy, a New York Times story said. And that presents another difficulty, considering the median housing price was $197,600, a 2% drop but still out of reach for many single people.
• The number of foreign-born people in the U.S. declined somewhat.  
• The percentage of American households on welfare was 2.3%, with Alaska leading the way with 6%, The Associated Press reported.

 Related reading:

• Gap between rich, poor Americans accelerates
• Tax-friendly places to retire
• How to retire in bad times
• Even well-off can imagine becoming poor

Published Sept. 23, 2009