While the wealthy are sitting on huge piles of cash, the rest of the country is not doing so well. The Wall Street Journal reports:
More than five years after the official end of the recession, the Public Religion Research Institute finds, only 21% of Americans believe the recession has ended.
Two recent reports help explain the disconnect between the official jobs numbers and the economic experience of most Americans. Every fall, the U.S. Commerce Department issues a detailed analysis of trends in income, poverty and health insurance. Although economists have some technical quibbles with the Commerce data, the broad trends are unmistakable.
This year's report found that median household income was $51,939 in 2013, 8% lower than in 2007, the last year before the recession. Households in the middle of the income distribution earned about $4,500 less last year than they had six years earlier. No wonder 56% of Americans told the Pew Research Center that their incomes were falling behind the cost of living.
The Federal Reserve's triennial Survey of Consumer Finances confirms these findings. Between 2010 and 2013, the Fed reports, median family income fell by 5%, even though average family income rose by 4%. This is, note the authors, "consistent with increasing income concentration during this period." Only families in the top 10%, with annual incomes averaging nearly $400,000, saw gains during these three years. Families headed by college graduates eked out a gain of 1%, while those with a high-school diploma or less saw declines of about 7%. Those in the middle—with some postsecondary education—did the worst: From 2010 to 2013, their annual incomes declined to less than $41,000 from $46,000—an 11% plunge. Families headed by workers under age 35 have done especially badly—even when the heads of those young families have college degrees. The economic struggles of the millennials are more than anecdotal.
What's going on? The Census report offers a clue. The median earnings for Americans working full-time year round haven't changed much since 2007. But more than five years into the recovery, there are fewer such workers than 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.This part really caught my attention: "Only families in the top 10%, with annual incomes averaging nearly $400,000, saw gains during these three years." Hey, Obama is not called President Goldman Sachs for nothing.