State's median income rises to highest on record
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By Bruce Edwards Rutland Herald - Published: January 6, 2009
Vermont families enjoyed a good year in 2007 with median family income rising to a record $65,786 but the onset of the recession will take a bite out of incomes through this year, according to The Vermont Economy Newsletter.
Median family income rose 4.6 percent, or $2,900, in 2007. Adjusted for an inflation rate of 2.8 percent, real income grew 1.7 percent.
"It was a good year economically," economist Arthur Woolf, co-publisher of the Vermont Economy Newsletter said Monday. "Things were humming along smartly."
Woolf said income gains in 2007 follow inflation-adjusted growth of 1.6 percent in 2006.
Those gains, however, will be offset somewhat by the onset of the recession that began in December 2007.
Woolf and fellow economist Richard Heaps are predicting a modest decline in inflation-adjusted median family income in 2008 and 2009. Although incomes continued to grow last year, high energy and food prices cut into much of the gains, they said.
Woolf and Heaps are projecting income growth will barely budge this year. While inflation will be low in 2009, they said it will erode whatever income gains families realize.
Median family income, which only includes married couples, is based on just released Vermont Tax Department data. (Half of all families earn more and half earn less than the median).
Woolf said the calculation only includes married couples filing jointly because he has an extensive database of married couples. He also said the data is more reflective of economic fundamentals.
When single-parent households, married couples filing separately and married couples filing jointly are all included, Woolf said the median income in 2007 was $56,257, an increase after inflation of 1.8 percent. Woolf said based on U.S. Census Bureau data Vermont's median income in 2007 for married couples was $70,500. He said median family income, which the Census Bureau defines as married couples and single parents with children, was $61,500 while median household income was $50,000. The Census Bureau defines household as any number of people living under one roof.
Doug Hoffer, a Burlington-based policy analyst, said the Woolf and Heaps report doesn't tell the whole story. Hoffer said there's more than a $4,000 income gap in median family income between the Vermont tax data and the Census Bureau data.
He said by using married filing jointly data, it excludes 155,000 single filers, or half the households in Vermont.
Hoffer, the author of the "Vermont Job Gap Study," also said census data on household income shows "the median declined from 2006 to 2007 by 3 percent."
"Art and Dick are trying to tell a reasonably happy story and I just don't agree with it," Hoffer said, "and I think most Vermonters understand that, not withstanding their assertion that incomes are rising, everybody knows that's not the case."
Colin Robinson of the Vermont Livable Wage Campaign also pointed out that between 2006 and 2007 the state's poverty rate increased from 7.7 percent to 8.4 percent.
Contact Bruce Edward at bruce.edwards@rutlandherald.com.
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