Economic pain widespread

WASHINGTON - Things really are bad all over - and they had gone bad even before the housing and finance industries crashed over the last year and sent the economy spiraling downward.

New census data show that throughout the first half of the decade, the slumping economy touched nearly every community in the country. Incomes dropped while poverty and unemployment rose in the vast majority of the nation's cities and towns.

Small and medium-size cities in the Midwest, already suffering from an ailing auto industry, were hit the hardest, with unemployment rates doubling or tripling in communities throughout Michigan, Ohio, Indiana and Illinois.

The numbers were not as bad in other parts of the country, but no region was spared, with incomes dropping as home prices escalated. The result: an unsustainable housing market that ultimately fueled the current economic crisis.

"For a while we were on a binge of living beyond our means," said David Wyss, chief economist at Standard & Poor's, the credit-rating service. "We were financing our spending habits by treating houses like giant ATMs."

The data, which are being released today, are the first detailed economic, social and demographic information for small and medium-size cities since the 2000 census. It was collected over three years, from 2005 through 2007, providing a mid-decade snapshot of every community with at least 20,000 residents.

Among the findings:

Median household income dropped in 77 percent of the cities and towns. Incomes dropped in the wealthiest communities as well as the poorest. Charleston, Ill., home to Eastern Illinois University, had the biggest drop - 31 percent - to a median household income of just under $21,000. Nationally, incomes dropped 4.3 percent during the period, to $50,007.

The poverty rate increased in 70 percent of the cities and towns. Athens, Ohio, home to Ohio University, had the highest poverty rate, at 52.3 percent, in the 2005-07 period. Nationally, the poverty rate increased from 12.4 percent to 13.3 percent since the start of the decade.

The unemployment rate increased in 71 percent of the cities and towns. Muskegon, Mich., a city of about 40,000 near Lake Michigan, had the highest unemployment rate, at 22.1 percent. Nationally, the unemployment rate increased from about 4 percent in 2000 to 6.6 percent in the 2005-07 period.

Median home values increased in 92 percent of the cities and towns studied - doubling and tripling in many cities, mainly in California. Nationally, the median home value increased 26 percent, to $181,800.