That’s how many months it took the country’s bottom half of earners to recover from the COVID-19 economic crisis—a remarkably fast comeback, a new online tracker of income changes shows.
Considering that when the pandemic hit, income for the bottom half of earners had only just fully recovered from the Great Recession of 2007-2009, 20 months is fast, according to makers of the new Realtime Inequality Tool, released Monday. Developed by economists at the University of California, Berkeley, the tool is meant to track how economic growth benefits people with different incomes differently. Traditional measures of economic recovery—such as gross domestic product—can mask the widely differing experience of different groups, they said.
"GDP growth statistics can be highly uninformative of how income is evolving for most Americans,” Gabriel Zucman, an associate professor of economics at UC Berkeley and one of the tool’s creators, wrote in an email.
Just before the pandemic hit, the average annual income of the lowest 50% of earners was $19,000, before taxes and any government aid they may have received, the tracker shows. It plummeted to $12,800 by April 2020, but by October 2021, was back to $19,000. After the last recession, in contrast, it took until September 2019 for the lowest earners to return to pre-recession levels of $18,600. (The tracker adjusts all figures for price inflation.)
The new tool, updated with every new monthly or quarterly release of economic statistics, uses a wide range of data from the Federal Reserve, the Bureau of Economic Analysis, the Census Bureau, and other sources. The goal is to give decision-makers timely information about how economic crises are affecting different demographics, and help them avoid mistakes such as withdrawing economic aid too quickly, the researchers said.
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