Saturday, October 15, 2011

Squeeze Play

Americans' ability to access basic life necessities are at recession lows. And the country likely won't catch up with pre-recession incomes for a long time.

Gallup’s Basic Necessities Index fell to a level on bar with lows measured in February and March 2009. At the same time, the U.S. median income declined 7 percent in the past decade and although economists predict incomes will rise in the next 10 years, the growth won’t be enough to get incomes back to pre-recession levels, according to the Wall Street Journal.

High levels of unemployment and plummeting home values have battered Americans’ incomes, making it increasingly difficult for them to get access to basic necessities like food, healthcare and shelter. Nearly 20 percent of Americans say they've had trouble putting food on the table in the past 12 months, according to another recent Gallup poll. And while incomes dropped during the recession, the recovery has only exacerbated that trend.

Between December 2007 and June 2009, U.S. incomes fell 3.2 percent, while during the recovery between June 2009 and June 2011 incomes dropped 6.7 percent, a recent study from former Census Bureau officials found.

Even as incomes fall, companies are still squeezing as much they can out of workers. Profits per employee went up for the second year in a row last year, according to financial analysis firm Sageworks.

Employers’ ability to get the most of their employees may be one reason the income gap between the wealthy and everyone else continues to grow. The total net worth of the bottom 60 percent ofU.S. households is less than that of Forbes 400 richest Americans.
(emphasis added)

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