More Hours, Less Living? Middle Class in a Post-2007 World.
January 9th, 2012 § Leave a Comment
If it seems like you’re putting in more hours and still struggling to make ends meet, that’s because that is exactly what’s happening. In our post-2007-housing-collapse economy, the average American worker has experienced a decrease in standard of living. In short, our dollar takes twice as long to earn and goes half as far as it did pre-2007.
Not since at least 1960 has the US standard of living fallen so fast for so long. The average American has $1,315 less in annual disposable income now than at the onset of the Great Recession.
What has led to the most dramatic drop in the US standard of living since at least 1960? One factor is stagnant incomes: Real median income is down 9.8 percent since the start of the recession through this June, according to Sentier Research in Annapolis, Md., citing census bureau data. Another is falling net worth – think about the value of your home and, if you have one, your retirement portfolio. A third is rising consumer prices, with inflation eroding people’s buying power by 3.25 percent since mid-2008.
The recession has effected diverse groups unevenly. For example those without a college education or low skilled workers faced unemployment as companies moved production offshore or bought equipment that replaced manpower. But even those working may have found salaries and benefits cut, increased responsibilities (and hours) because of staff reductions and no signs of a living wage pay increase on the horizon. Between technological advances and weak economic growth, this period has been the most difficult for American households since the 1930s. “If you don’t have the education and you don’t have the right skills, then you are getting creamed.”
As we launch into this new year, this blog will start detailing ways to help you save money, cut corners, keep your chin up and ride out these seemingly endless economic waves to a supportive shoreline where you can at least get your head above water. Not every idea will have a huge impact on your bottom line, but collectively—like crazy couponing— you will see a difference.
Every cent counts. Every act of saving makes an impact.
