How are we doing?
That is the question that reverberates in every report of the latest economic data. It’s the one that nags Americans as they head to the voting booth. It’s the question that sets our national mood. A new report provides the most exhaustive look at how Americans’ personal finances are faring — and sheds light on why the soaring stock market and occasionally giddy headlines have rarely translated into mass contentment with the economy.
Every three years, the Federal Reserve’s Survey of Consumer Finances interviews thousands of American families (6,026 for the newly published 2013 edition) about their income, savings, investments and debts. It is some of the richest information available about Americans’ financial lives, particularly in the 2010 to 2013 period of halting, inconsistent recovery from the Great Recession.
So how are we doing?
No recovery in incomes for most groups
The most basic measure of financial well-being is how much money people make and how much that money can buy. Many measures, such as per capita personal income, have risen in recent years, even after adjusting for inflation.
But this survey gives us a richer view of how incomes of people in different groups were affected. It is rather depressing.
Incomes rose nicely in the 2010 to 2013 time frame for the top 10 percent of earners (who had a median income of $230,000 last year). They rose slightly, by 0.7 percent, for the 80th to 90th percentile of earners (median of $122,000). But real incomes fell for every other group of earners.
Separate people by age or education, and the same basic pattern applies. Those with a college degree have done fine, but anything less than that and incomes have fallen. Both young adult households (those headed by someone under 35) and those households headed by someone over 75 have seen steep income declines in that same period.
This is the simplest yet most important fact to understand about the current economic recovery: It has not resulted in higher incomes for anyone other than those who were already doing well. And very large groups of Americans have experienced falling incomes.
That is the question that reverberates in every report of the latest economic data. It’s the one that nags Americans as they head to the voting booth. It’s the question that sets our national mood. A new report provides the most exhaustive look at how Americans’ personal finances are faring — and sheds light on why the soaring stock market and occasionally giddy headlines have rarely translated into mass contentment with the economy.
Every three years, the Federal Reserve’s Survey of Consumer Finances interviews thousands of American families (6,026 for the newly published 2013 edition) about their income, savings, investments and debts. It is some of the richest information available about Americans’ financial lives, particularly in the 2010 to 2013 period of halting, inconsistent recovery from the Great Recession.
So how are we doing?
No recovery in incomes for most groups
The most basic measure of financial well-being is how much money people make and how much that money can buy. Many measures, such as per capita personal income, have risen in recent years, even after adjusting for inflation.
But this survey gives us a richer view of how incomes of people in different groups were affected. It is rather depressing.
Incomes rose nicely in the 2010 to 2013 time frame for the top 10 percent of earners (who had a median income of $230,000 last year). They rose slightly, by 0.7 percent, for the 80th to 90th percentile of earners (median of $122,000). But real incomes fell for every other group of earners.
Separate people by age or education, and the same basic pattern applies. Those with a college degree have done fine, but anything less than that and incomes have fallen. Both young adult households (those headed by someone under 35) and those households headed by someone over 75 have seen steep income declines in that same period.
This is the simplest yet most important fact to understand about the current economic recovery: It has not resulted in higher incomes for anyone other than those who were already doing well. And very large groups of Americans have experienced falling incomes.
