Household Income Has Fallen More In The Recovery Than In The Great Recession
A truly sobering statistic brings home just how severe the downturn of the Great Recession was, and how weak the recovery has been:
Aug. 23 (Bloomberg) — American incomes declined more in the three-year expansion that started in June 2009 than during the longest recession since the Great Depression, according an analysis of U.S. Census Bureau data by Sentier Research LLC.
Median household income fell 4.8 percent on an inflation- adjusted basis since the recession ended in June 2009, more than the 2.6 percent drop during the 18-month contraction, the research firm’s Gordon Green and John Coder wrote in a report today. Household income is 7.2 percent below the December 2007 level, the former Census Bureau economic statisticians wrote.
“Almost every group is worse off than it was three years ago, and some groups had very large declines in income,” Green, who previously directed work on the Census Bureau’s income and poverty statistics program, said in a phone interview today. “We’re in an unprecedented period of economic stagnation.”
While gains in hourly earnings and average hours worked per week may have had “a minor mitigating effect” on income declines, they couldn’t offset a jobless rate that hasn’t fallen below 8 percent since February 2009 and a record duration of unemployment, according to the Annapolis, Maryland-based firm.
This is why it’s such a tough sell for the Obama Administration to pedal the idea that the economy has been in “recovery” since 2009. For most people, it’s been a recovery in name only.
Yes, the recovery has sucked.
I figure the explanation for this particular statistic is that there is probably lag time between recession (defined by contracting GDP) and household wealth loss (as people who have lost jobs spend down their savings). Especially since this was a recession in which household debt played a big role.
Absolutely none of this is surprising – $14 Trillion dollars in wealth and income was lost in the 2008 financial collapse. This was the worst economic catastrophe since the Great Depression.
So what should Congress and the President have done, to make the economy turn on a dime?
If there is nothing, this is another demand for the impossible, and a complaint that the impossible did not happen.
It really bugs me that the center-right “economic” argument is observation only. You must stop before analysis lest it undermine your case.
It is about as serious as “Greece exits Eurozone, blame Obama, vote GOP”
Yup. This has been obvious for a long damn time. Worker wages have been utterly flat since the 80s. The only reason standards of living have gone up is because of the ease of getting credit (and the societal acceptance of constantly carrying a debt load). That’s allowed companies with continually-rising profits to put that money in their own pockets, or overseas, rather than into the paychecks of the people that actually make that profit for them.
Until that changes, there will not be a recovery. Not in the US. Not in Europe. Not in China. Not anywhere.
This has been obvious for a long damn time. Worker wages have been utterly flat since the 80s. The only reason standards of living have gone up is because of the ease of getting credit (and the societal acceptance of constantly carrying a debt load).
I would also add that anymore both parents have to work at least one job to make ends meet. Between my husband and I we have 3.
I know very few people where one parent is able to stay at home, and most families I know one or both parents have more than one job (usually a full time job that comes with benefits and a part time job). I know a lot of people who waitress on the side.
@john personna: I agree the problems were “impossible” in the sense that the office of the President can’t fix them unilaterally and our country is currently too divided to implement the structural changes that need to take place. Personally, I don’t see much changing until a really bad crisis prompts a national epiphany.
However, I don’t have much sympathy for the President given the platform he ran on. I also don’t have much sympathy for Democrats since they spent their political capital on the ACA while they controlled the Presidency, Senate and House. Over-promising and under-delivering, like it or not, has consequences in politics.
But Democrats and liberals can take heart because Romney and the GoP are making promises they probably can’t keep, they will falsely believe they have a “mandate” (should they win this election) and they will inevitably overreach. And then they will, like the Democrats are doing now, will blame everyone and everything but themselves, their own hubris and stupidity.
@Andy:
The mature interpretation of a Presidential candidate’s promises are that he’ll try like heck to sell them to Congress. On economic fronts I think Obama did, and if we can fault him on anything, it would be “pre-compromising” toward the center, trying to make the case for Congress.
Think about his most recent jobs bill. He’d cut taxes and hire back furloughed teachers. The GOP gave that a flat no. Why exactly?
If I was going to contrast that with the GOP it would have to be with an absence of plans. They don’t give us anything that can be modeled.
Remember, last year the right was making the growth through austerity argument. They were arguing that cutting government spending “freed” the economy to grow.
It’s just one more thing that they’ve had to go silent on.
They cost now on party loyalty, “trust us, we’re Republicans.”
It’d be helpful to know if average household income rose over the same period insofar as it would demonstrate the worsening income / opportunity inequalities in our system.