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News from EPI Census Report Shows Stagnant Incomes: Safety net programs keep millions out of poverty, only the top five percent are recovering from the Great Recession

The 2012 poverty and income data released yesterday by the U.S. Census Bureau show modest income growth for most households between 2011 and 2012. From 2011 to 2012, median household income for non-elderly households (those with a head of household younger than 65 years old) increased from $56,802 to $57,353. However, this increase barely began to offset the losses incurred during the recession. Incomes are substantially lower than they were before the recession began. From 2009-2012, only households in the top 5 percent of the income distributions saw gains.

In their analysis, EPI President Lawrence Mishel and economists Elise Gould and Heidi Shierholz explain that the trends of the Great Recession and its aftermath come on the heels of the weak economy of 2000-2007—the first business cycle on record where incomes for those at the middle did not rise. In fact, as Mishel and Gould explain, most of the gains to low- and moderate-income families in the strong labor market of the late 1990s have been erased by the weak labor market of the last 12 years.

“The report tells us what we already knew. Hourly wages have been stagnant, across the board for many years, even for college grads. We’re not seeing much job growth, even as the unemployment rate falls,” said Mishel. “It shouldn’t be surprising that incomes are not going up if people are not working more, finding jobs, or seeing increases in their weekly paychecks.”

The poverty rate remains elevated, staying constant at 15.0 percent between 2011 and 2012. The number of people living below the poverty line in 2012 was 46.5 million. Since 2000, poverty has generally been on an upward trajectory. The poverty rate increased between 2000 and 2007 from 11.3 percent to 12.5 percent, then continued to rise through the Great Recession.

“The Census data show just how important safety net programs such as SNAP, unemployment insurance, and Social Security are to ordinary Americans,” said Gould. “In 2012, 1.7 million people were kept out of poverty by unemployment insurance and 15.3 million elderly Americans were kept out of poverty by Social Security. Furthermore, if SNAP were added to the Census definition of money income, then 4 million fewer people would be in poverty.”

“Given predictions for the health of the labor market, it’s likely that the poverty rate will not fall even to 2000 levels for some time,” said Gould. “Now is no time to be considering cuts to the safety net.”