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Income and Poverty Rate Held Steady in 2012

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Between 2011 and 2012 in the United States, neither real median income nor the poverty rate changed. For the previous four years (2008, 2009, 2010, 2011) either poverty increased (2008, 2009, 2010) or median household income decreased (2008, 2010, 2011).

Blue bars denote recession periods

As you can see from these charts, when poverty goes up, median income historically tends to go down. Some years the change for one estimate is statistically significant while the change for the other is not. It’s also noteworthy that for the first time since 1992, the year-to-year changes for both estimates were not statistically significant ─ in other words, not enough to be considered a real change.

So while we are not seeing income increase and poverty fall, we are not seeing the opposite either.

The lack of change between 2011 and 2012 was widespread for both income and poverty across demographic groups, geographic regions and other characteristics.  Likewise, most earnings estimates were flat across the two years and there was no change in the female-to-male earnings ratio.   Most measures of income inequality were the same in 2012 as in 2011.

One area with a positive change was in the number of workers.  There were 2.7 million more people with earnings in 2012 than in 2011. One million more men reported full-time, year-round work in 2012 than in 2011. The change in the number of women working full time, year- round was not statistically significant.

The findings show that our nation has not yet recovered to its prerecession circumstances. Median household income in 2012 was still 8.3 percent lower than in 2007, the year before the most recent recession. Poverty was 2.5 percentage points higher than in 2007. Median income was also 9.0 percent lower than the median household income peak that occurred in 1999.

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