West Virginians have had no shortage of economic challenges over the past few years. Jobs have grown scarce, health care costs have risen, and financial insecurity has grown. One economic challenge, however, stretches back for decades, slow income growth for middle class families.
For the first half of the 20th century, the middle class grew along with the overall growth of the economy. But a troubling trend began in the latter part of the century that continues today. This chart compares inflation adjusted personal income per capita with median family income for West Virginia from 1974 to 2008. The numbers are indexed to their 1974 levels to facilitate the comparison.
Personal Income per capita and Median Family Income (family of 4), 1974-2008
Source: U.S. Census Bureau and the Bureau of Economic Analysis
The chart shows that since the late 1970s, median income growth has been slow compared to overall growth in the economy. Since 2000, there has been almost no improvement in median family income, despite increasing growth in the economy.
If median family income had grown in sync with personal income per capita, then the median family income in 2008 would have been almost $80,000 compared to the actual level of $58,000.
The gap between overall economic growth and middle class income is due to rising inequality. In the past several decades much of the national economy’s growth has gone to those at the top of the income distribution. This trend is also happening in West Virginia. And as working West Virginians’ incomes remain stagnant, their economic hardships continue.