INCOME DROP FOR 2007-2010 VERSUS 1978-1983

(The following is from post #394963 on Motley Fool Investment Analysis Clubs/Macro Economic Trends and Risks, June 13, 2012)

If anyone wants to look at the source of all this recent media activity, it is at: http://www.federalreserve.gov/pubs/bulletin/2012/pdf/scf12.pdf

Median family income, which was already edging down in the years before the recession, continued to decline, dropping from $49,600 in 2007 to $45,800 in 2010, about where it was in the mid-1990s.

As to the 1982 recession (the worst since the Great Depression, by the way), household income (note the change from family to household) began to drop in 1979 in inflation adjusted dollars and continued to 1983 when it began to rise again. See Fig. 1 in http://www.federalreserve.gov/pubs/bulletin/2012/pdf/scf12.pdf

It is interesting that women's median incomes were actually rising by 1982 for full-time workers (Fig. 2). It was the male full-time workers who made the decline.

Peak household income peaked in 1978 at $46,202 with a bottom of $43,453 in 1983, a drop of $2,749 or 5.95% (inflation adjusted). Household income peaked $52,823 in 2007 and dropped to $49,445 in 2010 or 6.39% (inflation adjusted). Thus the drop in 2007-2010 was bigger by 0.44% than in 1978-1983. http://www.davemanuel.com/median-household-income.php

NOTE: Median household income in nominal dollars actually grew during the 1978-1983 period from $13,121 to $18,859 so the drop in inflation corrected dollars depends on how you count inflation. Whereas even nominal dollars dropped from 2007 to 2010 from $47,752 to $47,022 or 1.53%. Also note that the difference between 1978 and 2010 in nominal dollars is huge but the difference in inflation corrected dollars is small. Also note that the all-time high in inflation adjusted dollars came in 1999 at $53,252.http://www.davemanuel.com/median-household-income.php so the decline has been going on for a long time though the total to 2007 is not huge, just a bit over $429 or a decline of 0.8%, but to 2010 the decline is much larger $3,807 for a decline 7.15%.