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Is the average Utahn better off financially than four years ago? Census says no

Published September 13, 2012 9:29 am

Median household income has dropped 15 percent from 2008.
This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Adding fuel to this year's hottest political question, new census numbers show typical Utahns are significantly worse off financially now than four years ago — and perhaps even worse off than just a year ago, too.

The Census Bureau reported that median household income in Utah was $55,493 in 2011, down 15 percent from the last presidential election year of 2008 and off 5.1 percent from 2010.

It also said Utah's 2011 poverty rate was 11 percent — up from 10 percent in 2010 and from 7.6 percent in 2008.

However, sample sizes for Utah in the bureau's Current Population Survey are small, so the one-year change is not considered statistically significant — meaning it could be caused by errors in sampling as easily as by real economic changes. But the four-year change is considered statistically noteworthy.

"Still, it is the data that we have, so we respond to it," said Juliette Tennert, Utah state demographer. " ... The results seem to reflect what we know has happened" with incomes dropping and poverty increasing from lingering effects of the Great Recession.

Nationally — where sample sizes are larger and more reliable — estimates released Wednesday show the median income dropped 1.5 percent in 2011, down from $50,831 in 2010 to $50,054 in 2011 dollars. It said the national poverty rate was 15 percent, considered essentially unchanged from the previous year after three years of increases.

Despite margin-of-error issues, Tennert said the data show that "we compare favorably to other states. But compared to our history, our poverty rate is up."

Pam Perlich, senior research economist at the University of Utah, said it's no secret why income is down and poverty is up over time in Utah and the nation.

"There have been tremendous job losses, and many of the new jobs that are being created are not at as high of a wage level as the jobs that were lost," she said. "It's more than a recession, it's an economic restructuring."

Tennert said Utah lost 80,000 jobs from the beginning of the recession to its low point. But it has gained back 60,000 jobs since then — which may not show up in census numbers that reflect the situation a year ago, even though they are just now being released.

Still, with lower wages, depressed real estate prices and many Utahns owing more on mortgages than their homes are worth, Perlich said, "there's just an awful lot of households that are in very deep distress right now and just hanging on by a thread."

Perlich noted that Utah is higher than national average in household income in part "because we have more people per household than other states … and our teenagers have higher labor-participation rates. So you have more people living together and working, so that boosts household income. That's been the case for a long time."

Nationally, data show that incomes were up among only the top 5 percent of wage earners — while the incomes of all others dropped — "which also indicates a widening in the gap between the top and bottom," said David S. Johnson, chief of the census' Social, Economic and Housing Statistics Division.

Bill Tibbitts, associate director of the Crossroads Urban Center, which helps the poor, said the report "is a reminder about how much Utah's economy has changed since the beginning of the recession. ... You see some signs the economy is getting better, but for people on the bottom it's still really hard to find work. They are the first people fired and last hired."

Utah Democratic Party Chairman Jim Dabakis weighed in on the income gap.

"We simply cannot let the richest of the rich prosper and the rest of us decline with this mistaken idea that somehow, if we shower the uber-rich with money, they will make it better for the rest of us."

He added that Utah's GOP-controlled "Legislature and governor are so infused with this ideology of trickle-down that they are neglecting the poor in our community. It's unChristian. ... We have believed in this state that the emperor is fully dressed, but the emperor is standing there naked."

Utah Republican Party Chairman Thomas Wright said the longer view shows Utah's economy is well positioned.

"Utah has outperformed almost every state in the country on almost every statistic you can look at," Wright said. "We have one of the lowest unemployment rates. We have been rated the best place to do business."

He said Dabakis simply was making "a politically motivated statement to garner support for Democratic candidates. The governor and Legislature are very empathetic to lower-income families and the struggles of all families. They are doing everything they can to make our economy good."

ldavidson@sltrib.com