K-12 Tax and Spending Climate: Household Income Falls, Poverty Rate Rises

Conor Dougherty:

The typical American household saw its income fall for the third straight year in 2010 and the poverty rate clicked up to its highest level since 1993 as the aftermath of the latest recession continued to take a toll.

The median household income—what the statistical middle earns in a year—fell 2.3% to $49,445 in 2010, adjusted for inflation, according to the Census Bureau's annual snapshot on living standards released Tuesday. This comes on the heels of a so-called lost decade for earnings: Inflation-adjusted household income is down 7.1% from its 1999 peak, and 2010 was the first time since 1997 that American households made less than a median of $50,000.

The official poverty rate—defined as a family of four earning less than $22,314—was at 15.1% in 2010, up from 14.3% last year and up from 12.5% in 2007, before the recession was in full force. The official poverty rate has been criticized by economists and researchers because it doesn't take into account many of the programs the government uses to aid the poor, such as subsidized housing and the Earned Income Tax Credit.

Posted by jimz at September 13, 2011 2:22 PM
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