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The harder we work, the less we make. That seems to be the mantra of the Obama recovery. That is, if we have a job.
In the last four years, real median household income has fallen during both the recession and the recovery. Amazing. It's like still standing in the muck after the ebb tide.
According to Sentier Research, the June median income in the United States sat at $52,098, or 3.9% lower than in June 2009, the month tagged as the start of the recovery.
The median income of Americans continues to decline (adjusted for inflation), increasing concerns about the long-term health of the middle class and consumer purchasing patterns.
Still, it's not just the last five years that has seen the middle class take a steep dive. The trend, adjusted for inflation, is much worse.
The current income level now represents an 8% drop beneath its post-dot-com peak of $56,648 in February 2002. For the record, the median income represents the very middle of a salary distribution, meaning if 101 individuals were standing in line according to their income, the 51st person would represent the median. This contrasts from the mean, which would represent the average of all income levels.
This precipitous decline is bothersome to economists, as the stagnation of American incomes has prevented the economy from getting its mojo back in recent years. Consumer spending represents approximately 70% of the economy, most of the spending driven by the middle class.
Despite recent commitments to "bolster the middle class" and to focus on "high-paying" jobs across the country, the Obama administration has failed its citizens, and catered heavily to corporate interests and centralized planning that have hammered workers across the country.
No longer can this be defined as a left or right issue, but rather one that is up-or-down.
Will the middle class rise in the America, like it did for six decades before the millennium, or will government incentives continue to provide financial opportunity for the few at the expense of the rest?
Today, we highlight three important causes of this salary stagnation, and, more important, what Americans can do about it.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.