Who was hurt by the recession?
The recession has greatly damaged the economy, but did it inflict pain equally? Have households of all income levels suffered? N.C. Cooperative Extension economist Mike Walden answers.
“The short answer is yes. We have some new data from the Census Bureau that looks at the reduction in incomes during the recession for households of different income levels, and the answer is yes. All households of all income levels on average did suffer. For most of them, the decline was about 4 percent of their income. So between 2000 and the end of 2007, when the recession began, and the middle of 2009, when it is officially ended, households on average saw their incomes go down by about 4 percent. That is actually a fairly big number; it doesn’t sound like it, but it is a big number.
“However there is one group that suffered a little bit less, and that is our very highest-income households. They saw their income go down but by about 2 percent. My guess is that is probably correlated with education. What we find is that the highest educational levels are for those households with the highest incomes, and we can see in the data that people with more education did not see their unemployment rates rise as much.
“Now I should caution people in listening to this that these impacts on income do not take into account what has happened to wealth. And that may very well have differed by income levels also.”Category: Economic Perspective