Household incomes have fallen faster since the end of the Great Recession than they did during it, even as corporations have returned to greater profitability than they reached before the Great Recession. Corporate profits passed their pre-recession levels earlier this year, but according to a new study from Sentier Research, household incomes have fallen behind, dropping nearly five percent from June 2009 to June 2012. During the recession, incomes dropped just 2.6 percent, as the Washington Post reports:

Incomes have dropped more since the beginning of the recovery than they did during the recession itself, when they declined 2.6 percent, according to the report, which analyzed data from the Census Bureau’s Current Population Survey. The recession, the most severe since the Great Depression, lasted from December 2007 to June 2009.

Overall, median income is 7.2 percent below its December 2007 level and 8.1 percent below where it stood in January 2000, which was at $55,470, according to the report.

Corporate profits are at record levels, reaching an all-time high of 11 percent of the nation’s gross domestic product in July. But instead of re-investing that cash into jobs that will help the economy recover, corporations are sitting on cash — the members of the Standard and Poor’s 500 held $800 billion in cash in June 2011.

And while they are loathe to spend money on new workers, many of America’s companies have had no problem enriching executives. Even as some companies layoff workers, they have spent money on share buybacks that make executives rich. Executive compensation, meanwhile, has grown 127 times faster than worker pay over the last three decades, and many companies have paid outlandish bonuses and salaries to executives even as they layoff workers.

All of that has had an effect on the American middle class, which, according to a study released today by Pew Research Center, had its “worst decade in modern history” during the first 10 years of the 21st century.

The middle class is shrinking, and so is its share of America’s income and wage growth, according to a new study released Thursday. The study from the Pew Research Center found that the middle class — defined as Americans with incomes between $39,000 and $118,000 — fell backward in income for the first time since the end of World War II, and the number of Americans who fit into that category shrunk from 61 percent in 1971 to just 51 percent in 2011.

The share of income that went to the middle class also fell during the first decade of the 21st century, a 10-year period that featured two damaging recessions, including the worst economic downturn since the Great Depression, and a major housing crisis. The share of income that went to the wealthiest Americans, however, has grown substantially since 1970, as the Washington Post notes:

In 1970, the share of U.S. income that went to the middle class was 62 percent, while wealthier Americans received just 29 percent. But by 2010, the middle class garnered 45 percent of the nation’s income, tying a low first reached in 2006, compared to 46 percent for upper-income Americans.

Since 2000, the median income for America’s middle class has fallen from $72,956 to $69,487.

The Pew survey is the latest to note rising income inequality in America as the middle class continues to struggle while the wealthy remain relatively prosperous. Income inequality in the U.S. is now comparable, if not worse, than it is in countries like Ivory Coast and Pakistan, as middle class wages have stagnated. A 2010 Census Bureau study found that incomes for the bottom tier of Americans fell four times faster than they did for the wealthiest after the recession.

The “lost decade” for the middle class corresponds to declining tax rates for the wealthy and a growth in corporate profits. In the last 12 years, incomes for the wealthiest 400 Americans quadrupled even as their tax rates were halved, and executive compensation has grown 127 times faster over the last three decades than worker pay, one study found.

In the wake of the tragic shooting at a movie theater in Aurora, CO earlier this month, the nation has been engaged in a dialogue about the best ways to prevent violent crime — including passing stricter gun control legislation, requiring more background checks for firearm purchases, and increasing mental illness reporting. However, one writer at Scientific American suggests that homicides in the U.S. actually stem from a very different kind of source: the nation’s high rates of income inequality.

Eric Michael Johnson cites a study conducted by Harvard’s Ichiro Kawachi that analyzed the homicide rates in each state and the District of Columbia. Kawachi found that as the gap between the rich and the poor rose, the rate of homicide rose along with it:

The results were unambiguous: when income inequality was higher, so was the rate of homicide. Income inequality alone explained 74% of the variance in murder rates and half of the aggravated assaults. However, social capital had an even stronger association and, by itself, accounted for 82% of homicides and 61% of assaults. Other factors such as unemployment, poverty, or number of high school graduates were only weakly associated and alcohol consumption had no connection to violent crime at all. A World Bank sponsored study subsequently confirmed these results on income inequality concluding that, worldwide, homicide and the unequal distribution of resources are inextricably tied.

Income inequality in the U.S. has been rapidly rising since 1979. And an uptick in violent crimes certainly isn’t the only documented negative effect of the widening gulf between the rich and the poor. Studies have already shown that economic disparity has caused a problematic education gap, put an outsized burden on the Social Security program, and stifled the political power of a downtrodden middle class.

According to an analysis by the pay research group Equilar, compensation for top bank CEOs grew by nearly 12 percent last year. The Financial Times noted that these increases occurred “despite widespread falls in profits and share prices“:

Top US and European bankers, including JPMorgan Chase’s Jamie Dimon and Citigroup’s Vikram Pandit, have enjoyed double-digit annual pay rises averaging almost 12 per cent, despite widespread falls in profits and share prices, Financial Times research shows. [...]

The analysis of total pay awarded to 15 bank chiefs by Equilar, a US pay research group, shows they received an average 11.9 per cent pay rise last year to $12.8m, the second increase in a row. However, the pace of growth has slowed.

Bankers such as Brian Moynihan at Bank of America, Citigroup’s Mr Pandit and JPMorgan’s Mr Dimon enjoyed the largest gains.

According to a different estimate by Bloomberg News, Wall Street CEO pay grew by 20 percent last year. At the same time, worker wages grew by only 2.1 percent. And inflation adjusted wages actually declined by 0.6 percent between March 2011 and March 2012.

At the moment, in fact, wages as a percentage of the economy are near all-time lows:

Over the last 30 years, CEO pay has increased 127 times faster than worker pay.

As ThinkProgress has reported, American income inequality has skyrocketed over the last three decades. The wealthiest Americans have captured a large share of the nation’s economic prosperity, and their incomes continue to rise even as middle class wages remain stagnant. This income inequality has serious repercussions for the middle class, jeopardizing their economic ability and their political power.

But it doesn’t just affect people who are currently in the workforce. It has also contributed to a growing education gap that is affecting low- and middle-income children, according to a Center for American Progress report on income inequality and the middle class. The lowest-achieving students from high-income backgrounds are more likely to obtain a college education than the highest achieving students from low-income backgrounds, the report showed:

Perhaps most stunningly, there is evidence that low-income children who demonstrate aptitude for postsecondary education do not have the same access as children from higher-income backgrounds. The U.S. Department of Education reports that the probability that a top-scoring low-income student completes college is about the same as the probability that a low-scoring high-income student does, while the probability that a top-scoring middle-income student completes college is about as likely as a middle-scoring high-income student.

As income inequality continues to increase, the gap in educational attainment is growing too. The achievement gap between high- and low-income students is 30 to 40 percent larger than it was a generation ago, according to the paper, and income inequality is the primary reason. Areas of the country in which the middle class makes a higher share of income, meanwhile, demonstrate higher scores on achievement tests.

These problems lead to cycles of inequality that persist through generations. As Alan Krueger, chairman of the president’s Council of Economic Advisers, notes, the future economic mobility of American children is more closely tied to their parents’ income than it is in any other developed country. That means that rising income inequality, and the growing education gap it leads to, is jeopardizing the future for millions of American children before they even have a chance to change it.