Tuesday, May 22, 2018
Opinion

Column: For many, no recovery

Take a look at these charts. They show everything you need to know about why Americans are still so down on the economy.

From the start of the recession in 2007 to today, the average price of the things you buy — clothes, food, housing — has risen by 15 percent. This, in itself, isn't a problem at all. The problem is that wages haven't kept pace with that increase. In fact, for all but the top wage earners, real (inflation-adjusted) earnings are actually down over the same period.

That's why, though the economy may be strengthening, Americans say they still don't feel it.

Late last week, the Bureau of Economic Analysis revised its estimate of economic growth for the second quarter of 2014, reporting that real gross domestic product grew at an annualized rate of 4.2 percent — a slight improvement from previous estimates and a dramatic improvement from the first quarter, when real GDP declined by 2.1 percent.

But so far, the good news has yet to reach the average worker's wallet.

Say you're a median wage earner, right in the 50th percentile. In 2007, you could buy a week's worth of groceries for $100. Today those same groceries cost $115, but you have only $112 in your pocket.

Those figures, from a recent Economic Policy Institute report on our mediocre wage growth, provide important context for a new Rutgers University poll showing increasing pessimism in the aftermath of the Great Recession. Most striking: Seven in 10 Americans polled say the recession did permanent damage to the economy. In 2009, at the start of the recovery, 49 percent of Americans polled said the same. One reason pessimism has risen throughout the "recovery" is that over the same period, wages have not. In the Rutgers poll, 57 percent of respondents say they have less or the same amount of earnings and savings now as they did five years ago. Nearly six in 10 describe their financial situation negatively.

And by and large, Americans don't see much improvement on the horizon, according to the poll.

"Just 4 in 10 say they expect their family's finances to get a little (31 percent) or a lot (9 percent) better over the next year," the Rutgers survey authors write. "An equal number (42 percent) expect stagnation, with their financial condition staying the same. And nearly one in five see things getting harder for them over the next 12 months."

The stock market is going gangbusters; the S&P Index just closed above 2,000 for the first time. But according to the Rutgers survey, only 14 percent of Americans think what happens on Wall Street affects them greatly. When it comes to wages at least, it's still a bear market.

Christopher Ingraham is a data journalist focusing primarily on issues of politics, policy and economics. He previously worked at the Brookings Institution and the Pew Research Center.

© 2014 Washington Post

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