Median Income Falling, Even As More Find Jobs
If you're feeling poor you're not alone. We're bringing home less money now than when the recession began.
According to a newly released report from Sentier Research, median household income was $50,020 in January, 7.8 percent less than it was when the economic downturn began in December 2007 and 5.4 percent less than it was when the recovery began in June 2009.
Yet more people are finding work. January’s unemployment rate is at its lowest since early 2009, according to the Bureau of Labor Statistics.
What's going on? First, wages have stagnated over the last several decades -- a slow but steady drag on paychecks, heightened by wide layoffs of the recession. Second, the types of jobs created these days just aren't that high-paying. During the economic downturn, 40 percent of the jobs lost came from high-wage industries -- but high-wage industries accounted for only 14 percent of the new positions created in the first year of post-downturn job growth. This trend has continued.
For example, employment gains were made in small businesses, according to Intuit--a firm that analyzes payroll data of companies with 20 or less employees. Susan Woodward, a consultant for Intuit, told CNN Money that these are ”low-wage, hourly jobs."
The new income statistics don’t match up with other indicators of economic recovery, which include increased auto sales, higher industrial output, an improved housing market and climbing consumer confidence, according to the Associated Press
With limited income, Americans are buying more on credit. CredAbility--a non-profit credit counseling agency--released its Consumer Distress Index in February that showed Americans have been in financial distress because of decreasing household budgets.