Americans Earning Less Dough
Americans earned a smaller average income in 2005 than in 2000
It’s the fifth consecutive year Americans had to make ends meet with less money than at the peak of the last economic expansion, new government data show. The average income in 2005 was $55,238, nearly 1% less than the $55,714 in 2000, after adjusting for inflation, an analysis of new Internal Revenue Service statistical tables shows. The combined income of all Americans in 2005 was slightly larger than it was in 2000, but because more people were dividing up the national income pie, the average was smaller.
People with incomes of more than $1 million also got 62% of the savings from the reduced tax rates on long-term capital gains and dividends President Bush signed into law in 2003. The IRS data showed that the number of Americans making less than $25,000 a year shrank, down by 3.2 million, or 5.5%. The fact that average incomes remained lower in 2005 than five years earlier helps explain why so many Americans report feeling economic stress, despite overall growth in the economy. Many Americans are also paying a larger share of their healthcare costs and have had their retirement benefits reduced. Boo!
