Family income declines Study shows drop only in Northeast

BOSTON – The longest economic expansion in U.S. history didn’t raise median family incomes in the Northeast states, according to a report by Northeastern University researchers.

The Center for Labor Market Studies said that despite high-tech business successes, a booming housing market and low unemployment, the Northeast saw median family incomes decline by 1.2 percent from 1989 through 1999.

Nationally, median family income grew by 6 percent during the same time period, and by 11.3 percent in Midwestern states, the study reported.

Though the Northeast saw 4.6 percent job growth during the study period, the nation as a whole had 19.1 percent job growth, led by a 25.6 percent increase in the south and 24.6 percent in the West.

“The middle-class family saw no economic gain over the 1990s as a whole,” Andrew Sum, director of the Center for Labor Market Studies, told The Boston Globe in an interview published Tuesday. “That was so different from the ’80s,” when incomes in the Northeast rose 14.8 percent, he said.

Critics of the report, such as Mark Zandi, an economist for Economy.com in West Chester, Pa., say it was flawed because it lumped data for the entire decade into one statistic. The region’s recession in the early 1990s makes the entire decade appear less prosperous, he said.

Zandi said New England led the country into recession, but then emerged as “one of the strongest regions in the country. In terms of income and wealth creation, it’s right at the top, from 1995-96 to the current time.”

Sum does not dispute his critics, and acknowledges that the year 2000, which was excluded from the survey, was one of best years in the region’s economic history.

However, he said, to obtain a meaningful comparison, “you have to look at performance over a whole economic cycle, peak to peak.”

According to the report, the loss of 800,000 relatively high-paying manufacturing jobs during the decade helped fuel the decline in median family income. Growth in service sector jobs helped power the economy, but amplified the disparity between the highest and lowest-paid workers in the region.

The region also saw a loss of 3 million workers during the 1990s, far more than any other region, according to the study.