You Actually Are Poorer Now Than You Were in 2008

According to an analysis conducted by two former census bureau officials median income for the average American is still around 6 percent lower (after adjusting for inflation) than when the recession began in early 2008.  So if you feel poorer today than you did a few years ago you are not alone.

Median income change

The drop in income can be primarily attributed to a freeze in wages as employers cut labor costs following the global financial crisis and inflationary impacts which drove real wages lower. While median income has declined for most population groups the hardest hit were African-Americans, people who did not attend college, and younger households. Sadly this will further drive income inequality as income levels for more affluent groups has recovered faster

President Obama recently commented on the income disparity, “…..Even though our businesses are creating new jobs and have broken record profits, nearly all the income gains of the past 10 years have continued to flow to the top 1 percent…..”

But the good news is that incomes are rising. Thanks to an improving economy, mild inflation and growing consumer demand, employers are hiring at a faster rate – which is boosting wages as the labor supply pool shrinks. So while you may feel poorer now, chances are that with some hard work and luck you will be much better off in 2018!

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