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US Household Income Won’t Recover For Another Decade

US Household Income Won’t Recover For Another Decade

Though household income has been falling ever since the recession ended, there’s even more bad news in sight for working families: they shouldn’t expect any increases in their income beyond inflation for at least another decade. According to the Wall Street Journal, “economists expect inflation-adjusted incomes to rise over the next decade, but the 5% projected gain isn’t enough to reach prerecession levels.”

It won’t be until 2021 that incomes will get back to where they were when the recession ended, finally making back some of the losses that families have seen during and after the recession. Julia Coronado, an economist quoted in the article bleakly explains that this means that “standards of living in the U.S. will continue to decline as we deleverage and emerging markets take over as the growth engine of the global economy.” Basically, because American households are still busy paying off their debts, there just isn’t enough room in the economy to invest in continued growth.

This is terrible news for American families: though the poverty rate is exploding, increasing incomes aren’t going to be able to compensate for these losses anytime soon. The government isn’t going to be much help as budget cuts likely mean that income supplements are going to be cut, blowing another hole in many households’ income. And because of GOP procedural maneuvers, it looks like the Senate might never pass any bill that will help create jobs for those who have been left unemployed.

Hopefully this news will spur some kind of action among those who have the power to influence the economy, be it Congress or the Fed. The jobs crisis and the stagnant economy are now not merely today’s problems, but will affect families’ income for years to come. This further underscores the importance of acting on the economy today, as it could help make up some of the lost income that families are beginning to see.

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Photo credit: Aaaarrrrgggghhhh!'s Flickr stream.

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24 comments

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7:00AM PDT on Oct 21, 2011

Thanks for the article.

10:41AM PDT on Oct 19, 2011

And if the Repubs get in.....it NEVER will

6:50AM PDT on Oct 19, 2011

If the Repubtea party gets into office in 2012, you can kiss the recovery for the poor and middle class goodby. Corporate America will get even richer and stronger to crush waht is let of the middle class in this country. Buyer beware of their 999 plans to solve any or all our problems.

2:46AM PDT on Oct 19, 2011

Should the Government do more to help those who have lost income during the recession? Of course they should but they will not, due to the fact that they are the problem and the cause of this recession, along with the help of their sponsors, the Corporations and the wealthy.
What some sections of your Government secretly wants is to be part of this elite group, and they don't care who loses once they get what they've always desired, that is excepting those members who are already stinking rich.

12:19AM PDT on Oct 19, 2011

Very depressing.

10:04PM PDT on Oct 18, 2011

http://burningbabylon.wordpress.com/2008/10/07/secret-illuminati-blueprint-silent-weapons-for-quiet-wars/

8:40PM PDT on Oct 18, 2011

Ten years at least, I'm sorry to say.

4:49PM PDT on Oct 18, 2011

Steve R. can you explain how these 50% are being supported by other peoples money? I'm sure that everyone here would like to be educated regarding your opinion! Because it is unlikely that you can prove your comments with facts.

Jeffrey W. is just a terrorist that wants to see the economy totally trashed so he can exploit more poor people.

Diane O. has already been challenged, so I'll just leave that one be!

3:43PM PDT on Oct 18, 2011

You are being less than truthful, Nancy L. Regardless of wage level when working, unemployment benefits are arbitrarily low. I assure you, NancyDianeO, no one is paying for a vacation across country with unemployment benefits-- a one-way bus ride from, say, MS to Miami is more than $125, and it takes 3 days.

And, ummm, if you are so teabagging self-righteous, why are you friends with someone who "loves getting paid for not looking for a job"?

Shall I tell you about a few friends of mine? One, a PhD, is flipping burgers, and he was out of work for more than a year before he got the low wage job. Diane O posts here at all hours of day and night: if she isn't a paid shill for Koch&Co, she is living off parents or a husband. Therefore, she is not working class and any input she offers is based on her prejudices and not experience in the real world of the working class. You, Nancy? First posting of yours I've come across, so about you I'll just say if what you've said here is your unpaid opinion, you are willfully ignorant.

3:16PM PDT on Oct 18, 2011

Despite how grim the information is, thank you for sharing it.

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