Rich flourishing, poor struggling in recession recovery: report
If you’ve been confused about headlines detailing the economic recovery, you’re not alone.
That’s because, there’s two stories going on right now. For every group that’s bouncing back, another is slugging behind. Canada’s aerospace industry is doing well, for instance, while our nation’s youths can’t find work anywhere.
The most prevalent recovery discrepancy? That would be between the rich and the poor. Chances are, you hear plenty about how the well-off are back, or close, to pre-recession normal, but new research suggests the same isn’t true for low-income families.
According to this week’s “A Tale of Two Recessions” event in New York co-sponsored by Consumer Reports and the Columbia Graduate School of Journalism, economists seem pretty convinced that not only is the middle-class disappearing, but the recession’s aftermath is dissolving it that much further.
By Consumer Reports’ Employment Index, lower-income Americans lost more jobs than they gained in 23 of the past 24 months. Conversely, “more affluent Americans seem to be gaining more jobs than they are losing,” the report notes.
The same goes for consumer sentiment about the economy. While affluent ($100,000-plus income) and middle-income ($50,000-$100,000) households measure the economy over the crucial “50” score in the Consumer Reports Sentiment Index, low-income Americans consider it well below that level. After bottoming out in October of 2009, low-income consumers aren’t close to that “50” score; affluent Americans were the first to return to that mark after the recession, middle-income households took a year longer to succeed that “50” measure.
Some are calling this trend – the rich staying rich, the poor getting poorer and the middle-class going one of those two routes – the death of the American dream.
“We’ve really lost the whole idea that you can rise and fall in American society,” said Raymond D. Horton, a Columbia Business School professor. “We’ve really been stagnant for a while.”
By Jason Buckland, MSN Money