By John W. Schoen, NBC News
The poor stayed poor and the rich got richer, but the middle?slipped a few more rungs down the economic ladder.
More than five years after the Great Recession began, the lingering impact of the worst downturn in a half-century continues to deplete the standard of living of middle-class American households.
Median household income, after adjusting for inflation, fell 1.5 percent last year to $50,054,?according to the Census Bureau's annual report?on income and poverty issued released Wednesday. The poverty rate, at 15 percent, remained stuck at the highest level since 1993.
For Ray Bober, 45, of Pittsburgh, whose unemployment benefits ran out this year after a family printing business failed several years ago, the dismal economy takes a toll every time he sends out another resume that goes nowhere.
?You have to learn to roll with the punches and laugh a little; it?s very depressing,? he said. ?It takes a toll, especially this long. You want to reach out and shake your fist in the air and blame someone, but you can?t. The way it is, is the way it is. There?s nothing you can do about it but stay in the fight."
For millions of middle-class American households, the fight began well before the Great Recession destroyed more than 8 million jobs, or even before the financial collapse in 2008 that gave birth to the downturn. Median household income, adjusted for inflation, has been dropping for 13 years.
The?drop?in income has been magnified by the persistent high unemployment, currently above 8?percent, which peaked at a monthly pace of?more than 800,000 jobs shed in November 2008. On top of job growth that's been weaker than any recovery in a half-century, wages haven't budged since the recession ended.
Last year, median family household income fell 1.7 percent, to $62,273, according to the Census Bureau. ?The decline has left income for those in the median 8.1 percent lower than in 2007, the year before the recession began, and 8.9 percent lower than the median peak in 1999.
?The lasting impact (of the Great Recession) has been at levels above the poverty level,? said Tim Smeedling, director of the Institute for Research on Poverty University of Wisconsin?Madison. ?It?s been in the middle."
To cope with falling wages, many households have ?doubled up? to share expenses. There were about 22.3 million such "shared" households as of last spring, up from 19.7 million when the recession began, according to the Census data.
For many, moving back home is the only way to avoid falling into poverty.
?Family is the oldest welfare program in the world,? said Smeedling. ?But if they move back in with their parents, given that most parents' income is somewhat higher than poverty, they won?t be counted as being poor. This doubling up conceals some of the impact of poverty.?
Bober is one of those for whom family offers the last threads of a social safety net. He lives with his mother and sister in the inner city house he grew up in.
?Between the bunch of us we pull together well,? he said. ?But we?re backsliding.?
Not everyone is falling behind. While the median income slipped last year, those at the top of the income ladder continued to move ahead. The top 5 percent of incomes rose by 5.3 percent last year, according to government data.
Those at the very bottom of the ladder continue to struggle, but their numbers stopped growing last year. The government said 46.2 million Americans were living in poverty last year, statistically the same as in 2010. The determination of poverty is based on a number of factors but typically a family of four was considered to be in poverty last year if its total household income was less than $23,021.
The government?s official poverty threshold is calculated using a half-century-old formula based on the average household?s food budget. To determine whether a household falls below that threshold, the Census adds up cash income including earnings, Social Security benefits, unemployment insurance and other government assistance paid in cash, plus interest and dividends on savings and investments. The Census doesn?t count non-cash assistance like food stamps or the earned income tax credit, which pays workers who make poverty-level wages.
Those assistance programs have helped blunt the impact on the very poor in ways that the government?s official numbers don?t fully capture. If the value of food stamps were included in the income calculation, for example, some 3.9 million fewer people would have fallen below the threshold last year, according to the latest data. If the earned income tax credit were included, another 3 million fewer children would be included.
The comparisons also illustrate the impact of the broadest safety net programs. If unemployment insurance were excluded from the income calculations, for example, another 16 million people aged 18 to 64 would have fallen below the poverty line last year. If Social Security benefits weren?t counted, another 14.5 million people would have fallen below the line.
But many long-term unemployed end up without those financial lifelines.
?People used to fall out of work all the time and onto a safety net,? said Arloc Sherman, a senior researcher at the?Center on Budget and Policy Priorities. "Now the kind of safety net we have is very work-based. So if you lose work, you fall to nothing. ?
The number of families at the very bottom of the ladder has remained relatively stable. But they?re not necessarily the same families, said Sherman.
?A lot of people who are at the bottom in one year weren?t there one or two or three years ago,? he said. ?It?s not?so much that there?s a growth of a new underclass that stays constantly at the bottom quite.
The latest Census data bear that out, as the number of people working full-time, year-round rose by more than two million, many of them shifting from part-time jobs to full time jobs, but at the lower end of the income spectrum. ?
?We think that shift from part-time to full-time could have kept the poverty rate from rising,? said David Johnson, head of the?Census Bureau's Social, Economic and Housing Statistics Division.
Pulling income lower
The growth of full-time employment on the low end of the wage scale also helped pull the median income lower, however, he said.
Confronted with a dismal job market, many of those out of work have tried going back to school, contributing to?the recent drop in the official count of the U.S. labor force to the lowest in three years.
Government statistics offer hope that the investment in time and money will pay off. The?unemployment rate for workers with a college degree stood at 4.9 percent last year compared with 9.4 percent for those with a high school diploma and 14.1 percent for those without one. The median weekly earnings for college graduates was $1,263 compared to $638 for Americans with just a high school diploma.
?Certainly, there?s been a lasting impact on people who don?t have college educations,? said Smeeding. ?They?re having a real hard time.? ?
So are many jobless workers who lack?the savings to pay for college. Bober tried that tack, enrolling in a local community college, but fell short of money for tuition and books when his unemployment benefits ran out.
Competition for low-skilled, low-wage jobs remains fierce, as he recently found out when he applied for a job as a night stock manager at a local retail outlet.
?I have management experience. When I was younger I used to call on supermarkets,? he said. ?So I figured, ?Hey I can move boxes just like the next guy. They emailed me back after a couple of days and said, ?Sorry you didn?t meet our qualifications.'"
The experience, he said, was a sobering reminder of the dismal employment outlook.
?It scared me because I always felt you can get a lesser job in life. Just suck it up; you can always find work,? he said. ?That isn?t true. And that?s a scary, scary thing."
Bober says he gets by these days doing odd jobs. He helps out a friend who owns a local funeral home. He?s landed work as an extra on film and television shows shot in Pittsburgh.
He doesn?t blame anyone in particular for his seemingly relentless search. But, as a former small businessman, he thinks something?s badly wrong with the American way of earning a living.
?When I was a kid, if a guy wanted to go an print up some Steelers T-shirts in his garage and show up at the football game and make up a couple of bucks, that was an enterprising guy.? He said. ?It was a hard-working upstanding citizen. Now, the government and the lawyers come and you?re a bootlegger.?
Related:
Economy's long slump pushing many down the ladder
After climbing economic ladder, one family fears falling backward
Mobile food pantry serves families in need
clear channel drexel dale george will obama birth certificate nick cannon lindsay lohan saturday night live
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.