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CRE Finance World, Summer 2014

Median household income in the US actually declined over the past five years. The real median household income was $55,627 in 2007 (2012 dollars) compared to $51,017 in 2012. The real median household income is back to 1995 levels. Chart 3 Real Median Household Income 1967–2012 Source: U.S. Census Bureau, Current Population Survey, Historical Income Tables, Table H-5. The employment to population (E/P) ratio peaked in 1999 at 64.4%. In tandem with the great recession E/P dropped to 58.3% and as of year-end 2013 it remained at 58.6%. Prior to the great recession, the E/P ratio was not this low since 1982 (57.2%). This number is particularly disquieting considering that in 1982; women still did not participate fully in the workforce. Chart 4 Employment/Population Ratio 1980–2013 Source: US Bureau of Labor Statistics CRE Finance World Summer 2014 28 The Gini Ratio is a measure of income inequality. The higher the Gini Ratio number, the greater the financial concentration. The US has become a significantly less equal society over the past 45 years. The US Gini Ratio rose from 38.6% in 1968 to 47.7% in 2012. Chart 5 Gini Ratio Source: US Census Bureau As the US has become a more unequal society, income and its corresponding spending power have shifted away from the shrinking middle income and growing lower income brackets in favor of a smaller upper income segment. The Top 10% share of total income was 50.42% in 2012. This is the highest it has ever been and surpasses previous highs in 2007 (49.74%), 2006 (49.32%) and 1928 (49.29%), the year before the Great Depression. Although it dipped in 2008, it has resumed its ascent4. Challenges Confronting US Retail Properties


CRE Finance World, Summer 2014
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