Photo (cc) by rachaelvoorhees
It’s been five years since the Great Recession and the American economy appears to still be in neutral.
A recent column on Al Jazeera America by Pulitzer Prize-winning journalist David Cay Johnston said that if you focus solely on the short term, you may think the economy is improving. But look further back and it’s clear that most Americans were in some ways better off after the Great Depression than they are today, Johnston said.
It may be jarring to hear that the vast majority of Americans, the 90 percent, enjoyed bigger income gains in the 1930s than in recent years, but that is what the data show.
The data also indicate tandem increases in both want and wealth, with the vast majority worse off in 2013 than in 2009, while those at the apex of the economy are enjoying a much larger — and growing — share of national income.
With the richest 1 percent of Americans capturing 93 percent of all income gains since the recession ended, it’s understandable that the majority of Americans (57 percent) think we’re still in a recession, economist and Siena College economics professor Aaron Pacitti wrote on The Huffington Post.
Because jobs and wages have improved at a snail’s pace, Americans simply aren’t feeling the effects of the recovery. “Living standards, especially for young Americans, are worse than any point in recent history,” Pacitti said.
Johnston painted the following bleak picture of how Americans have fared since the recession ended:
- Jobs. “With population growth taken into account, America needs more than 145 million jobs to surpass 2008’s employment percentage,” Johnston said.
- Wages. The average hourly wage for private sectors went up in 2013, but only by 12 cents per hour. “More revealing, the average hourly pay of $20.13 last year was smaller than in 1972 and 1973,” Johnston said. So people had to work 52 weeks in 2013 to make what workers earned in 49 weeks in 1972 and 1973, adjusted for inflation.
- Income declines. About 90 percent of Americans experienced an income decline of about 2 percent in 2012 compared with 2009, when adjusting for inflation. The majority of Americans had 31 percent more income in 1936 than in 1933.
It’s understandable why some economists, like Pacitti, said America has moved from the Great Recession to the Great Stagnation. Johnston said:
To sum up, there are some tiny improvements in the job and income numbers, but only if you limit the analysis to the last few years. Look back a decade or four decades or even eight decades, and the story changes from an America of growing prosperity to one of falling incomes, not enough jobs and ever fatter slices of the income pie for the elite.
What has your experience been since the Great Recession ended? Do you feel like you’re better or worse off? Share your thoughts below or on our Facebook page.