Data released Wednesday by the Census Bureau show that the middle class lost ground in terms of income for the fourth consecutive year. This slump occurred even though the economy was growing, albeit modestly. In 2011, real household income in the middle of the income distribution was $50,054, a 1.5 percent ($780) decline since 2010. These households are bringing home less real income than they did in 1996. Since 2007, the year the Great Recession began, median household income dropped by 8.1 percent ($4,400).

Working age households in the middle of the income distribution were hit even harder in 2011. Median household income for this group was $55,600, falling by 2.4 percent ($1,400) since 2010 and 9 percent ($5,700) since 2007. Workers’ wages are falling behind even though productivity is up in the nation. Budget and Tax Center research shows that North Carolina’s workers’ pay growth is also lagging far behind productivity gains.

Well, if the middle class lost ground and the poverty rate was unchanged during the same time period, to whom did the economic gains accrue? Read More…