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Typical CT Families Lost Ground Sharply In 2010 As Incomes Rose For Wealthier

Drop Was Second-Largest Among States

By JANICE PODSADA and MATTHEW STURDEVANT

September 22, 2011

Median household income dropped last year in Connecticut more than in any other state except Nevada, even as the state's per-capita income rose by 2.9 percent.

Median income — the point at which half of household earnings are more and half are less — declined by 6.08 percent in Connecticut last year, falling to $64,032 from $68,174 in 2009, according to U.S. Census estimates released Thursday. Estimates are based on the ongoing American Community Survey.

In the same period, median household income for the U.S. as a whole fell by about 2.2 percent, decreasing to $50,046 in 2010 from $51,190 in 2009, the report said.

Median household income is considered the single most important measure of broad prosperity because it measures how the most typical families are faring. Across the nation, the number has generally been dropping since the 2001 recession.

Total income, by contrast, continues to rise in all but the worst recession years in Connecticut, which is by far the richest state for per-capita income — the total number of dollars earned divided by the total number of people.

Despute the drop for typical families, the state's per-capita income was $56,001 last year, up 2.9 percent from the previous year. Connecticut's per-capita income reached its zenith in 2008, at $56,245, and then dropped to $54,400 in 2009, according to Department of Commerce data.

That means more money is being earned by households above the median. It isn't entirely clear where the bump-up is coming, but many people believe the richest residents are seeing the biggest increases.

Nicholas S. Perna, a Yale University lecturer and Webster Bank adviser, who had not viewed the report, offered two possible explanations for the decline in Connecticut's median household income.

The first possibility, said Perna, is that "somehow or another bonuses and stock options were much smaller last year."

The second explanation — if true — could indicate that the state is undergoing a shift in the mix of jobs. But it's not yet clear if that is the case, Perna said.

"We know that Connecticut is not all that great at generating jobs. Are we also now beginning to see a change in the mix of jobs?" Perna said.

"If a change in the mix is a factor dragging the average down, then it's a major public policy issue. Our success has rested on having a high income level. If that is the problem, then it's serious," Perna said.

Nevada experienced the largest drop in median household income last year. Median income fell by 6.1 percent, dropping to $51,001 in 2010 from $54,313.

The decline in median income "reflects the weakness we've had over the last decade," said Fred Carstensen, director of the University of Connecticut's Center for Economic Analysis. "It basically confirms that we're in a very, very difficult economy. We know it was bad — the really big question is how we are going to get out of it."

The issue in Connecticut, Carstensen said, "is not cost, it's climate. We have this terrible permitting regime in Connecticut. Getting permits can take years. … Businesses say they'd like to come to Connecticut, but they don't know how long something like this will take."

Poverty

Connecticut's poverty level increased as part of a national trend, although poor people are a smaller portion of Connecticut's population than that of the U.S. overall.

Last year, 10.1 percent of Connecticut residents were living below the federal poverty level, compared with 9.4 percent in 2009. The federal poverty level is defined as a single person making less than $11,139 annually, a family of three earning less than $17,374, or a family of five making less than $26,439. Nationally, people living in poverty increased from 14.3 percent in 2009 to 15.3 percent last year.

Windham County had the greatest percentage of poor people of any Connecticut county, with 12.3 percent living below the federal poverty level. Windham was followed by New Haven and Hartford counties, with 11.7 percent and 11.4 percent, respectively. Tolland and Litchfield counties had the lowest poverty levels last year at 5.4 percent and 6.5 percent, respectively, and, in Tolland and New Haven counties, the poverty rate declined between 2009 and 2010.

Uninsured

The number of people without health insurance in Connecticut was up slightly, to about 320,300, or 9.1 percent last year, compared with about 304,200, or 8.8 percent, in 2009, yet Connecticut fared better than the nation.

The U.S. Census Bureau's American Community Survey data released Thursday define "uninsured" as a person who did not have health insurance at the time the survey was conducted in 2010.

Fairfield County had the highest rate of people without health insurance at 11.7 percent last year, up from 10.9 percent in 2009. Hartford County had the second-highest rate, at 8.5 percent, compared with 8.1 percent in 2009. Hartford County was followed last year by Litchfield, Middlesex and New Haven counties. Tolland County had the lowest percentage of people without health insurance, at 5.1 percent last year and in 2009.

Massachusetts had the lowest percentage of people without health insurance last year compared with other states, followed by Hawaii, Vermont, Iowa, Minnesota and Connecticut. Washington, D.C., and Puerto Rico were ranked between Hawaii and Vermont. Texas had the greatest percentage of people without health insurance, followed by Nevada, Florida, Alaska and New Mexico. In general, states in the Northeast and Midwest had high levels of people covered by health insurance, while those in the South and West had lower levels.

Nationally, the ranks of the uninsured increased from 45.5 million, or 15.1 percent, in 2009, to 47.1 million, or 15.5 percent, last year.