Average Americans off to rough start this millenium
The economy is doing great. That's the message the White House and business reporters have been pedaling, ever since the recession "ended" in 2002. But this week, none other than the Federal Reserve Board -- a bastion of corporate-class boosterism -- has come out with a report clearly showing that for most of us, things aren't so good.
In its Survey of Consumer Finances, published every third year, the Feds analyzed trends from 2001-2004. On a host of indicators, there are a host of troubling signs:
WAGES AND INCOME DOWN: From 2001 to 2004, average family income fell 2.3%, and median income stagnated, rising only 1.6%. Real wages -- those adjusted for inflation -- dropped 6%.
GROWING INEQUALITY: The median net worth of the wealthiest 10% of families increased 4% to $924,100 in 2004 from $887,900 in the previous Fed survey. At the same time, the net worth of the bottom 20% of the income distribution declined by more than 10% to $7,500. The income group from 20% to 40% had a 13% drop in net wealth to $34,300. Net worth is the difference between family assets, such as stocks and homes, and liabilities.
RISING DEBT: The percentage of families holding debt rose 1.3 percentage points to 76.4%. The median debt level jumped 33.9% to $55,300. Some of this was "good debt"-- i.e., home mortgages -- but it's also clear people are deep in hock.
REGIONAL DISPARITIES: The Northeast was the only region to show gains in both average and median - the point at which half earned more and half earned less - incomes from 2001 to 2004. In the Midwest and South, both income measures declined. In the West, only the median rose.
Note that this was all BEFORE high energy prices and other inflation pressures gouged more money from people's wallets.
Chris Kromm is executive director of the Institute for Southern Studies and publisher of the Institute's online magazine, Facing South.