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News : US Economy Last Updated: Jan 9, 2015 - 5:24 AM


Typical American household income in 2013 was below the 1989 level
By Michael Hennigan, Finfacts founder and editor
Sep 17, 2014 - 5:47 AM

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The typical American household income in 2013 was below the 1989 level according to data from the Census Bureau that was published Tuesday.

In its annual report on income, health insurance and poverty [pdf] the agency reported that the inflation-adjusted median annual household income - - the mid-point where half of households are above and half below - - rose 0.3% in 2013 to $51,939, which compared with $52,432. in 1989.

The median income was about 8% below the level of 2007, when the recession officially began and since the recovery started in 2009, median incomes are down 4% and back to the 1996 level of $52,741 (the median income dropped in 1990-1995).

Since 2009, incomes have risen only for the top 5% of earners.

The official poverty rate declined for the first time since 2006 to 14.5%, down from 15% in 2012 but it was up on the 2007 level of 12.5% level

Almost 45.3m Americans were living in poverty last year. The poverty level was $23,624 for a family of four.

The Census Bureau said that 13.4% of Americans had no health insurance in 2013 - - the Affordable Care Act, known as Obamacare only became operational from late 2013.

Neil Irwin of The New York Times comments: "Around 1999, growth in the United States economy stopped translating to growth in middle-class incomes. In the last 15 years, median income has been more or less flat while there was far sharper growth in, for example, per capita gross domestic product

Irwin adds: "Evolving technology favors those with the most advanced skills and allows companies to replace formerly middle-class workers with machines. Declining union power gives workers less power at the bargaining table over wages. Cultural norms have shifted such that top executives and financiers are paid much more compared with regular workers than they used to be. ...But there really is no mystery as to why public opinion has been persistently down on the quality of the economy for years. You can’t eat GDP. You can’t live in a rising stock market. You can’t give your kids a better life because your company’s CEO was able to give himself a big raise."

Source: The New York Times

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