The Recovery That Left Out Almost Everybody
September 26, 2014
Total employment has risen every month for more than four years. According to the Current Population Survey, more than eight million jobs have been created since the trough, while the number of unemployed has been cut by nearly six million, according to the Wall Street Journal.
And despite the fact that the unemployment rate has fallen by almost 4 percent, average Americans continue to remain gloomy about the current economy and anxious about the future.
- According to a recent Pew Research report, only 21 percent rate current conditions as excellent or good.
- 79 percent view conditions as fair or poor.
- 33 percent agree that jobs are readily available, yet only 26 percent believe that good jobs are available.
Even though the recession ended five years ago, only 21 percent of people believe that the recession ended, according to the Public Religion Institute.
A recent report may resolve the paradox and help explain why there is a fundamental disconnect between official job numbers and what most Americans experience.
- Every fall, the U.S. Commerce Department issues a detailed analysis of trends in income.
- This year it found that median household income was $51,939, 8 percent lower than was it was in 2007.
- Furthermore, the Federal Reserve's triennial Survey of Consumer Finances confirms these findings and reports that median family income has decreased by 5 percent.
- Only families in the top 10 percent, those with annual incomes averaging $400,000, saw gains during these three years.
So while median earnings haven't changed much, there have also been fewer positions for Americans than there were before the recession. In 2007, 108.6 million Americans were working full time, year-round; in 2013 only 105.9 million were doing so. Although jobs are being created, too many of them are part-time to maintain growth in household incomes.
The American economy, despite a modest recovery, hasn't worked for average families since the end of the Clinton administration. The economy will only work by rewarding work and allowing family incomes to rise.
Source: William A. Galston, "The Recovery That Left Out Almost Everybody," Wall Street Journal, September 23, 2014.
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