Families in the province were £860 worse off last year than before the property crash; the sharpest fall anywhere in the UK, according to new analysis published today by the independent think-tank the Resolution Foundation.
Typical household incomes in Northern Ireland were £21,794 on the eve of downturn.
The region then experienced the sharpest fall in living standards of anywhere in the UK, with typical incomes falling by 6.7 per cent (£1,470 a year) between 2007-08 and 2011-12.
Living standards have recovered steadily since then but were still £864 below their pre-downturn level in 2014.
The foundation says that while further increases are expected this year, the weak performance is due partly to a relatively sluggish jobs recovery compared to other UK regions.
Its current employment rate is still 2.1 per cent lower than in early-2008. It also experienced the biggest real pay squeeze of anywhere in the UK, with typical hourly wages falling by 13.4 per cent between 2009 and 2014, compared to a UK figure of 9.3 per cent.
As a result, it says the province has been overtaken by traditionally weak economic areas such as the North East, Wales and Yorkshire and the Humber, and now has the lowest household incomes of anywhere in the country.
The findings also reveal that the downturn has been felt very differently with pensioner households likely to have fared far better than those of working age.
Typical incomes among pensioner households were 9.4 per cent above their pre-downturn level last year, while working age households were still 4.6 per cent down.
That suggests, the foundation claims, that official data on household incomes is either flawed or accurate but out of date.
“Northern Ireland experienced the biggest fall in living standards of anywhere in the UK, with typical incomes falling by almost £1,500 between 2008 and 2012,” saidLaura Gardiner, senior policy analyst with the foundation.
“This is largely down to the pay squeeze workers faced.
“Typical incomes have recovered since then but there is a long way to go before they return to pre-downturn levels.
“There are also considerable generational differences behind this headline fall in living standards, with pensioner households likely to have fared far better than those of working age.
“This makes it hard to talk about living standards in a way that resonates with people’s experiences across Northern Ireland.”