Median household income in R.I. continues to fall

Posted by Wayne G. Barber

PROVIDENCE, R.I. — Even though the state's unemployment situation has brightened in recent years, household income for Rhode Islanders has fallen steadily since the start of the Great Recession and continues to decline, according to recent numbers from the U.S. Census.

In 2008, as the recession took hold across America, Rhode Island's median household income peaked at $61,655, when adjusted for inflation to the value of the dollar in 2015. By 2014, the latest year available, it had fallen to $55,259. While roughly paralleling the change in household income across the nation, Rhode Island is out of step with its neighbors Connecticut and Massachusetts, which have seen a rebound since hitting post-recession lows.

As median household incomes fall, the middle class is forced to entrench economically, cutting back on discretionary spending and tapping assets, such as retirement funds and home equity, that represent most families' largest accumulation of wealth. The slowdown in consumer spending can grind the state's economy to a halt and put the brakes on recovery.

Rhode Island's unemployment rate reached a seasonally adjusted peak of 11.3 percent in June 2009, the year that household incomes began falling. It remained above 11.0 percent until November 2011, when it began dropping nearly every month, according to figures from the U.S. Bureau of Labor Statistics. It had fallen to 5.6 percent in August, the latest month available ahead of Thursday's planned announcement of the September rate.

For Connecticut, the peak also was in 2008, when it was $75,928 in 2015 inflation-adjusted dollars. It bottomed out at $68,641 in 2013 and stood at $70,517 in 2014. In unadjusted dollars, those figures were $68,595 in 2008; $67,098 in 2013; and $70,048 in 2014.

Massachusetts, too, peaked in 2008, at $72,392 in inflation-adjusted dollars. The low point was $66,599 in 2011. It had risen to $69,623 in 2014. The unadjusted dollars: $64,401 in 2008, $62,859 in 2011 and $69,160 in 2014.

The nation came in lower than the three Southern New England states. It peaked in 2007 at $58,321 in adjusted dollars. The bottom was $53,323 in 2012. In 2014, it was $54,017. In unadjusted dollars: $50,740 in 2007, $51,371 in 2012 and $53,657 in 2014.Source: Paul Edward Parker

Providence Journal Staff Writer