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Household incomes dropped after recession ended

News reports each week describe different statistics about the economy. Some reports suggest the numbers are good, while in others, the numbers may be discouraging. Most experts agree, however, that the recession ended some time ago. Intuitively, you would think that would have a positive impact on Ohio residents' household budgets.

New research on the national scale says that household income has actually fallen since the end of the Great Recession. Cincinnati bankruptcy lawyers are aware that tighter household budgets can lead to increased financial distress, higher debt and for some people, the greater need to seek meaningful debt relief.

New research indicates that the inflation-adjusted median household income level for Americans has fallen 6.7 percent since the recession officially ended in June 2009. The research was conducted by two former Census Bureau Officials. What may be more surprising to some is that the research shows household income fell only 3.2 percent during the grips of the recession between Dec. 2007 and June 2009. In other words, household income has dropped more since the end of the recession than it did in the midst of the financial meltdown.

Overall, incomes fell 9.8 percent from the start of the recession to this June, the last month that figures were available. The researchers say the nearly 10 percent drop in median household income represents the biggest decline in a number of decades.

The researchers note that during the recession itself, wage gains outpaced inflation, accounting, in part, for the greater drop in income following the end of the recession. Unemployment is down slightly, but wages are down to a greater extent. The researchers say many Americans who lost their jobs since the recession bit have taken new jobs at lower wages. The average worker has taken a new job after being unemployed making 17.5 percent less than the worker's previous wage.

Some people have tried to weather the storm by taking on more debt in the hopes that future wages will be higher to accommodate that debt. For those that are finding it hard to make ends meet, there may be legal options to find meaningful debt relief. Ohioans buried in debt should consider speaking with an experienced bankruptcy attorney who can explain different options that may be available under the bankruptcy code.

Source: San Francisco Chronicle, "Household income falls more after recession," Robert Pear, Oct. 10, 2011

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