It’s Not Just You–The Income of Americans Has Been Declining During the “Recovery”
Not only have our incomes continued to go down since the recession officially ended, they’ve gone down more than they did during the recession.
The recession officially ended June 2009. But since then we have had the weakest recovery since the Great Depression, eight decades earlier.
A report released last Wednesday, August 21, 2013, confirms what you have likely been feeling: household income, which fell steeply during the official recession, continued falling after the “recovery” began. According to respected data from the U.S. Census Bureau, the nation’s inflation-adjusted median annual household income hit bottom August 2011, and since then has only modestly recovered. So our median income now continues to be lower than at the end of the recession four years ago, and substantially lower than when the recession officially began December 2007.
Here are the numbers:
- During the official recession from December 2007 through June 2009, median annual household income declined by 1.8%.
- During the “recovery” from July 2009 through August 2011, income declined steeply, by 6.9%, during that period.
- During the improving recovery from September 2011 through June 2013, income edged upward, by 2.7%.
- This puts median annual household income now 6.1% less than at the start of the recession.
So if you feel like you have been sliding backwards, it’s true. Not just you, not just a few million Americans, but the entire country on average has been sliding backwards based on this very practical measure of median household income. As one of the authors of this report explains:
In many ways, median household income provides a measure of the net effect of economic activity on the middle class and how well they are able to buy food, housing, and other necessities every month, especially now during this unprecedented period of economic stagnation. Based on our data, almost every group is worse off now than it was four years ago, with the exception of households with householders 65 to 74 years old. For some groups of householders—Blacks, men living alone, young and upper-middle age brackets, part-time workers, the unemployed, females with children present, and those with only a high school degree or some college but no degree—the declines have tended to be larger than average.
It’s essential for every person to take responsibility for their own financial life, to work very hard to better their own lives and that of their children. We don’t throw in the towel because it’s hard.
But it’s also important to recognize the economic landscape that we live in. We are fighting against the tide. That doesn’t mean that we can’t succeed. It just means that it’ll take that much more effort, skill, creativity, and even wisdom, to get there.
It might be wise for you to consider ways to better your situation that you would not have considered in better times. If you are here reading this, you may be considering bankruptcy. It may be able to solve your financial problems more creatively, more skillfully than you thought possible. Give us a call. It may or may not be the right solution for you. The responsible thing to do is to find out.