Household income tumbles during the Obama “recovery”
The New York Times delivers some news so grim that it had to cook the headline to hide it: “Median Household Income Down 7.3% Since Start of Recession.”
Well, yes, but as the Times reluctantly admits in the very last paragraph of the story, 5.6 percent of that decline has occurred since the Obama “recovery” began. And median annual household income just fell by 1.1 percent in a single month – February 2013 – after the Obama “recovery” has supposedly been in progress for years. That’s after $6 trillion in deficit spending to “stimulate” the economy, supposedly for the benefit of the average household.
What’s behind this decline in household income, which has become so drastically pronounced throughout the Obama era?
The analysts at Sentier Research (a company that provides demographic and income analysis, run by former Census Bureau officials) note that median income has been depressed recently by inflation. While inflation is still quite low, income growth has been so weak that even very little inflation is enough to wipe out whatever gains households are seeing in their paychecks.
The longer-run trends are even more depressing.
February’s median annual household income was 5.6 percent lower than it was in June 2009, the month the recovery technically began; 7.3 percent lower than in December 2007, when the most recent recession officially started; and 8.4 percent lower than in January 2000, the earliest date that this statistical series became available.
Okay, so income is depressed by inflation, but there really isn’t any inflation, and happy days are here again thanks to the re-election of President Obama, but the long-run trends are depressing, and the chief culprit is weak income growth. (Although given the way inflation is computed these days, I would not discount the effect of rising gas and food costs upon median income, even during periods where inflation is nominally flat.)
Why is income growth weak? You can look back over the last few months and find attempts to blame it on everything from Hurricane Sandy to “fear of the fiscal cliff,” but we’re past all that now, and such factors cannot have suppressed income growth for years beforehand. And overall household income was artificially stimulated by the raid on Social Security revenue that Obama passed off as a “payroll tax cut,” right up until he abruptly stopped caring about it during the fiscal cliff showdown, because he had to pretend he was a deficit hawk to demand for tax increases. Arguably, income growth has been in even worse shape than we thought, with the problem partially masked by reduced payroll taxes.
Median household income is a big number driven by enormously complex calculations, so there are many factors involved, but maybe it’s time for these media analysts to think about the tectonic shift to part-time work inspired by fear of ObamaCare. Not only does part-time work pay less, but the dissolution of full-time career positions means fewer opportunities to build high income through a long relationship with a single employer. High unemployment in general drives median income down, and the number of people who exit the workforce entirely because they can never find work has increased. The media used to fret about such things under Obama’s predecessor, when unemployment was a little more than half what it is today.