The labor market is the foundation of income for the vast majority of families. Family incomes are affected by weak labor markets, both through job loss and through hours and wage cuts for those who have work. This chart shows median, or typical, household income, both overall and for working-age households. The typical working-age household saw an income decline of $2,700 from 2007 to 2009. Furthermore, given that this recession came on the heels of one of the worst business cycles (2000-07) on record in terms of job creation, the typical working-age household brought in roughly $5,000 less in 2009 than it did in the year 2000.
Because racial and ethnic minorities are disproportionately hit by job loss in recessions, their incomes drop further than that of whites. African Americans in particular have seen very large income declines during the Great Recession.
The Great Recession has seen a substantial rise in poverty. In 2009, one in seven people were living in poverty, and one in five kids under the age of 18 was living in poverty. Young kids have been the hardest hit, with nearly one in four children under the age of 6 living in poverty.
Racial and ethnic minority families are much more likely to be living in poverty than non-Hispanic workers, regardless of whether the economy is in an expansion or recession. In the Great Recession, however, Hispanics in particular have seen large increases in poverty. Roughly one in four Hispanics and African Americans are living in poverty.
Other fallout
With the bursting of the housing bubble, the decline in the stock market, and the weakness of the labor market, household wealth has taken a substantial hit in the Great Recession. The median net worth of whites fell by around a third from 2004 to 2007, dropping from around $150,000 to around $100,000. The median wealth of blacks, historically much lower than that of whites, took an even bigger hit, dropping by over three-quarters, from around $10,000 to around $2,000.
As most Americans, particularly those under 65 years old, rely on health insurance obtained through the workplace, it is no surprise that employer-sponsored health insurance fell dramatically in the Great Recession. The share of Americans under age 65 who are covered by employment-based health insurance fell from 62.9% in 2007 to 58.9% in 2009. Some of that decline was offset by increases in public insurance coverage, but nevertheless in 2009 there were 50.7 million people, 7.5 million of them children, without any type of health insurance.
What’s in store
The last two recessions have been characterized by very slow labor market recoveries. If job growth is similar to that of the last two recoveries (early 1990s and early 2000s), then the much greater scale of job loss in the Great Recession means it could be well into the next decade before we make up all the jobs lost.
Republicans and Democrats, start introducing bills as part of an Ownership Act to broaden individual ownership of FUTURE wealth-creating, income-generating productive capital assets, and start seriously creating new owners, without taking anything away from those who already OWN America.
Support the Agenda of The Just Third Way Movement athttp://foreconomicjustice.org/?p=5797
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice
Support the Capital Homestead Act athttp://www.cesj.org/homestead/index.htm andhttp://www.cesj.org/homestead/summary-cha.htm. See the full Act athttp://cesj.org/homestead/strategies/national/cha-full.pdf
http://stateofworkingamerica.org/great-recession/falling-income-rising-poverty/
