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By Maryalice Gill November 18, 2011

Biden says middle income earners lost ground before the recession

Vice President Joe Biden visited a New Hampshire university Oct. 20, 2011, to promote President Barack Obama’s American Jobs Act before an audience whom he called "the 9/11 generation."

Speaking to a full house inside Plymouth State University’s lecture hall, Biden talked about the need to restore the middle class and to bring jobs back to America. He said middle-income-earning Americans have been "under siege," long before the economic recession hit.

"In the previous decade, before the current recession, the middle class was getting killed," said Biden. "During that period between 2001-07, productivity of American workers was up 20 percent, but median income of the middle class dropped by $2,100 during this time."

Did the median of middle-income households really take a $2,100 hit before the economy hit the fan?  We looked into Biden’s claim to find out.

First we contacted Biden’s staff to find out which figures they were using to come to the $2,100 decrease in the median income for middle-class households.

Tobin Marcus, Biden’s deputy economic policy adviser, told us the vice president was referring to real median household income for working age households. "We’re looking at the core wage-earning households as opposed to retirees," Marcus said.

"Working age households" are typically considered houses headed by someone between the ages of 25 and 54, and the median income was chosen to represent middle income wage earners.

Biden’s office cited the Census Bureau’s Annual Social and Economic Supplement to the Current Population Surveys for year-ending data for 2000 and 2007.

They said they compared inflation-adjusted numbers, using the "annual average" increase column of the Bureau of Labor Statistics’ Consumer Price Index.

We took a look at their numbers, and their calculations checked out.

To be sure, we contacted Dennis Delay, an economist with the New Hampshire Center for Public Policy Studies and a New Hampshire State Forecast Manager for the New England Economic Partnership.

He confirmed the calculations Biden’s campaign provided.

"I looked at the data sources, and they appear to be correct, and the data calculated correctly," Delay said.

Delay then pointed us to a report by the Economic Policy Institute which used the same data. From 2000-07, the Institute said the real median income of working age households fell from $61,574 in 2000 to $59,460 in 2007—a decrease of $2,114.

The White House Task Force on the Middle Class cited a "weak labor market" and "anemic job growth of the 2000s" among some of the problems that contributed to the approximately 3.4 percent decline in the median of middle class incomes over the seven years leading up to the economic recession.

"Clearly median inflation adjusted income fell much faster during the recession (2007 to present)," Delay said. "But the fall in that indicator during a period of economic expansion (2000 to 2007) is very troubling. I don’t believe any other period of economic expansion saw a commensurate decline in median inflation adjusted income."

Our ruling:

Vice President Biden said the median income of the middle class dropped by $2,100 from 2001-07, and the numbers check out. We rate Biden’s claim True.

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Our Sources

Already a lost decade: Working-age household income down more than 10% since 2000, The Economic Policy Institute, Nov. 15, 2011

Email, Dennis Delay, Economist, New Hampshire Center for Public Policy Studies, Nov. 15, 2011

Telephone interview, Kendra Barkoff and Tobin Marcus, Vice President Biden’s Office, Oct. 28, 2011

Email, Kendra Barkoff, Vice President Biden’s Office, Oct. 28, 2011

The White House, Annual Report of the White House Task Force on the Middle Class, Accessed Nov. 17, 2011.

Age of Householder--Households, Type of Household, Race, and Hispanic Origin of Householder by Total Money Income in 2000, U.S. Census Bureau, accessed Oct. 28, 2011

Age of Householder--Households, by Total Money Income in 2007, Type of Household, Race and Hispanic Origin of Householder, U.S. Census Bureau, accessed Oct. 28, 2011

Consumer Price Index, U.S. Department of Labor, Bureau of Labor Statistics, accessed Oct. 28, 2011

Federal Reserve Bank of Chicago and University of Chicago, Health and the Savings of Insured Versus Uninsured, Working-Age Households in the U.S, accessed Nov. 17, 2011.

CPI Inflation Calculator, Bureau of Labor Statistics, Accessed Nov. 17, 2001.

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Biden says middle income earners lost ground before the recession

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