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Incomes Even Lower Since Recession Ended

Incomes Even Lower Since Recession Ended

 

Feeling poor and like your paycheck isn’t stretching as far as it used to?† You’re not alone.† According to a new report from the U.S. Census Bureau, household income has fallen almost 10 percent since the recession began in December of 2007.† And even worse, the decline became twice as great in the two years following the recession than it was during the recession itself.

So how does that happen?

According to Politico, both decreases in income were “highly correlated with high levels of unemployment, increases in the duration of unemployment and the large number of persons who have experienced ‘employment hardship.’”

Of course, recession doesn’t actually relate to unemployment, although the two tend to go hand in hand, but to the growth of the economy in the country.† Two down quarters in a row mark a recession, and one up quarter marks “the end” regardless of the state of employment, pay or other factors that actually have an impact on people versus economic indicators.

As long as the economy is growing — or officially no longer shrinking — there’s no real incentive for businesses to increase pay, bring back cost of living increases, add overtime or even stop laying off workers.† And for those workers they do hire back, a lower initial wage can and is being offered.† Workers are supposed to feel so grateful to have a job that any money is enough, something corporations, looking to expand their profit margins, are relying on.

It’s no wonder that the drop in income has been the most drastic in households of families led either by adults under the age of 25 or African American heads of house.† Those two groups have had the largest percentage of unemployment, and are the most likely because of it to take anything offered, having no resources to hold out for something better or higher paying.

As long as job insecurity goes hand in hand with corporate greed, it doesn’t matter if the economy is in a recession or a boom.† Either way, household incomes will continue to suffer.

 

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42 comments

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8:18PM PDT on Oct 14, 2011

THANK YOU, Jonathan Y. and Rosalind R. I was surprised to find out that it had ended, too! Or maybe it just ended for the rich, because where I am, people are still going to food shelters and homes are empty because of foreclosures (and the banks can't unload them), and the jobless rate is still 8%!

5:59AM PDT on Oct 13, 2011

WOW, when did the recession end?
Oh yes, now I remember ---it was when the New Depression began!
Bah Humbug!

10:51PM PDT on Oct 12, 2011

Reinvent capitalism.

10:15PM PDT on Oct 12, 2011

Part Three:

6. Social Security is a Ponzi scheme.
Don’t believe it. Social Security is solvent for the next 26 years. It could be solvent for the next century if we raised the ceiling on income subject to the Social Security payroll tax. That ceiling is now $106,800.
7. It’s unfair that lower-income Americans don’t pay income tax.
Wrong. There’s nothing unfair about it. Lower-income Americans pay out a larger share of their paychecks in payroll taxes, sales taxes, user fees, and tolls than everyone else.
Demagogues through history have known that big lies, repeated often enough, start being believed — unless they’re rebutted. These seven economic whoppers are just plain wrong. Make sure you know the truth – and spread it on.

10:14PM PDT on Oct 12, 2011

Part Two:

4. Cutting the budget deficit now is more important than boosting the economy.
Untrue. With so many Americans out of work, budget cuts now will shrink the economy. They’ll increase unemployment and reduce tax revenues. That will worsen the ratio of the debt to the total economy. The first priority must be getting jobs and growth back by boosting the economy. Only then, when jobs and growth are returning vigorously, should we turn to cutting the deficit.
5. Medicare and Medicaid are the major drivers of budget deficits.
Wrong. Medicare and Medicaid spending is rising quickly, to be sure. But that’s because the nation’s health-care costs are rising so fast. One of the best ways of slowing these costs is to use Medicare and Medicaid’s bargaining power over drug companies and hospitals to reduce costs, and to move from a fee-for-service system to a fee-for-healthy outcomes system. And since Medicare has far lower administrative costs than private health insurers, we should make Medicare available to everyone.
6. Social Security is a Ponzi scheme.
Don’t believe it. Social Security is solvent for the next 26 years. It could be solvent for the next century if we raised the ceiling on income subject to the Social Security payroll tax. That ceiling is now $106,800.

10:14PM PDT on Oct 12, 2011

The Recession ended? When? I'm sick of this callous language the economists and ruling 1% use to conceal their sins. This is a Depression. It doesn't look exactly like the Great Depression because of the laws and programs that were created to prevent the same level of devastation. But it's still a depression. And we're not out of it. It doesn't matter what level the DOW is at.

Saying that it's *only* a recession, and then that it ended, is a cruel slap in the face to the 16.5 million Americans currently willing to work but still have no jobs.

I know, I know, they like to hide behind their cute little clean-cut definitions, based on level of GDP and unemployment rate, etc., but tell that to the 16.5 million. Tell that to the additional 25 million that are stuck with part-time work instead of full-time jobs with benefits. Tell that to the 40 million Americans whose employers dropped their health insurance and, obviously, they can't afford any on their own. Tell that to all of us whose incomes have not kept up with inflation over the last decade, never mind the last 4 years!

Sick American shit. I'm embarrassed and ashamed. I have to look to the Occupy Wall St. movement to find hope in our future.

Three more "free trade" agreements crafted by the Obama administration were just passed. There goes a few million more jobs overseas. Thanks, Obama, we deeply appreciate that.

10:14PM PDT on Oct 12, 2011

Robert Reich: Leading Economist Busts Lies: Part One

1. Tax cuts for the rich trickle down to everyone else.
Baloney. Ronald Reagan and George W. Bush both sliced taxes on the rich and what happened? Most Americans’ wages (measured by the real median wage) began flattening under Reagan and has dropped since George W. Bush. Trickle-down economics is a cruel joke.
2. Higher taxes on the rich would hurt the economy and slow job growth.
False. From the end of World War II until 1981, the richest Americans faced a top marginal tax rate of 70 percent or above. Under Dwight Eisenhower it was 91 percent. Even after all deductions and credits, the top taxes on the very rich were far higher than they’ve been since. Yet the economy grew faster during those years than it has since. (Don’t believe small businesses would be hurt by a higher marginal tax; fewer than 2 percent of small business owners are in the highest tax bracket.)
3. Shrinking government generates more jobs.
Wrong again. It means fewer government workers – everyone from teachers, fire fighters, police officers, and social workers at the state and local levels to safety inspectors and military personnel at the federal. And fewer government contractors, who would employ fewer private-sector workers. According to Moody’s economist Mark Zandi (a campaign advisor to John McCain), the $61 billion in spending cuts proposed by the House GOP will cost the economy 700,000 jobs this year and next.

10:02PM PDT on Oct 12, 2011

The worst is yet to come, I'm sorry to say.

8:45PM PDT on Oct 12, 2011

Jeffrey W. said,

"The Obama economic policies are sure working out well, aren't they?"

One thing that can be said for infrastructure spending is that it has to be done anyway. Will it create enough jobs to keep up with the out-sourcing and off-shoring of U.S. jobs? Probably not. Unless the out-sourcing of jobs to other countries is addressed directly the depression will continue no matter who is in office.

Tax breaks to the wealthy have not created jobs during either administration. I am not sure what you are complaining about because Mr. Obama has continued the tax breaks that Bush used right through this administration. The same tax breaks that brought us "the worst financial collapse since the great depression."

What else is being offered by the Corpublicans? I don't think that throwing granny out into the street will be successful and I don't think that people want to breath poisonous air or allow governemnt to abdicate its repsonsibility to preserve the environment for future generations. That is not what Americans want. That is silly.

8:34PM PDT on Oct 12, 2011

Diane O. said,

* * *
"There's sooo much money in America and we are sitting on it....we aren't spending....this country needs ObamaCare rescinded and we need Obama out!! Once that happens we'll begin an historic recovery....."

I have to think that you are talking about the obscene profits being made by slave labor in China and not being invested here. What is your plan for a historic recovery?

I don't think bringing back the health care system we had will work. No matter how you wrap the flag around it, it wasn't much of a health care system at all. It was only a money making system at the expense of those with pre-existing conditions. Any system that has such a kill rate is one of the worst health care systems in the world.

The elderly are on Medicare and that is the largest group of claims. If the elderly and the unhealthy (pre-existing conditions) were excluded who were included in the private health care system? It only leaves the young and the healthy (those that do not need health care but pay premiums to support double digit increases yearly and CEO salaries). You want that back?

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