William Galston explains why the “recovery” doesn’t feel like much of an actual recovery to most Americans:
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.”
Yes, I know household income isn’t always the best measure of actual wealth, but read on:
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 is not by choice. About the same number of Americans were employed last month as in December 2007. But during that period, according to the Bureau of Labor Statistics, the number of Americans working part time who wanted a full-time job jumped to 7.2 million from 4.6 million. Not only are hourly wages stagnating; America’s families want more hours of work than the economy is providing.
Household size is likely increasing, due to the college debt crisis and the full-time employment crisis. That means stagnant wages spread out over more people in the same household.
I’ll look for more numbers to confirm this, but in the meantime it certainly seems to jibe with what Americans have been telling pollsters.