Incomes fell more after the recession ended
In June 2009, when economists declared that the recession had ended, many households in Georgia and across the U.S. believed that there were better times ahead. However, according to a new study by two former Census Bureau officials, that was not the case. After the recession ended, household incomes continued to fall, and they did so at a faster rate than during the economic downturn, leading to continuing high rates of bankruptcy and foreclosure throughout the country.
During the recession, which officially took place from December of 2009 to June of 2009, the median household income dropped by 3.2 percent. Between June of 2009 and June of 2011, after the recession had been declared ended, the median household income fell 6.7 percent to just under $50,000.
Interestingly, the unemployment rate dropped slightly during that same period, going from 9.5 percent in June of 2009 to 9.2 percent in June of 2011. Economists believe that this is because there are simply more people who have exited the labor force permanently, neither working nor actively looking for work.
In addition, hourly pay rates have fallen, so even though there may be more people working, those people are not earning as much money as they may have in the same position before the recession. many of these pay cuts have been voluntary – people have settled for lower pay in order to find work that they desperately need to pay their bills.
In sum, median household incomes dropped by almost 10 percent from the beginning of the recession to June of this year. According to economic researchers, this is the largest decrease in income in the U.S. in several decades.
Source: New York Times, “Recession Officially Over, U.S. Incomes Kept Falling,” Robert Pear, Oct. 9, 2011