According to a study
done by former Bureau staffer Gordon Green and others at data-crunching firm
Sentier Research, the income of the typical American household, adjusted for
inflation and in 2011 dollars, has dropped well below the January 2000 level ($55,836).
Based on data such as consumer-credit levels, "it looks like we're at a
bottoming point," he said. [...] that process is over, it will constrain
the economy, even if the U.S. is spared additional adverse shocks, leaving
Americans groping for a way through an uneven recovery. --
Americans are two years into a recovery that doesn't feel
much different to many of them from life during the most bruising recession in
seven decades. Scenes of the long haul back from the slump show a nation
struggling to rebuild after a battering that crossed ages, regions and
occupations.
According to a study
done by former Bureau staffer Gordon Green and others at data-crunching firm
Sentier Research, the income of the typical American household, adjusted for
inflation and in 2011 dollars, has dropped well below the January 2000 level ($55,836).
Based on data such as consumer-credit levels, "it looks like we're at a
bottoming point," he said. [...] that process is over, it will constrain
the economy, even if the U.S. is spared additional adverse shocks, leaving
Americans groping for a way through an uneven recovery. --
Americans are two years into a recovery that doesn't feel
much different to many of them from life during the most bruising recession in
seven decades. Scenes of the long haul back from the slump show a nation
struggling to rebuild after a battering that crossed ages, regions and
occupations.
A sobering set of economic statistics is at the heart of
tales of Americans moving in with relatives, switching careers and dialing back
on spending to cope with straitened circumstances amid the fitful rebound.
One benchmark, income of the median household -- meaning
the one in the very middle of the middle -- declined 3.2% to $53,518 during the
2007-2009 recession and fell a further 6.7% to $49,909 between June 2009 and
June 2011, according to an analysis of monthly Census Bureau numbers. According
to a study done by former Bureau staffer Gordon Green and others at
data-crunching firm Sentier Research, the income of the typical American
household, adjusted for inflation and in 2011 dollars, has dropped well below
the January 2000 level ($55,836).
Other data paint a similarly bleak picture. No recession
since the Great Depression was deeper or longer than the most recent. It has
taken two years for the nation's total output of goods and services to return
to pre-recession levels, longer than after any recession since World War II.
And on a per-capita basis, the Commerce Department said Thursday, output
remains 3% lower than it was at the end of 2007.
Since the recession's end in mid-2009, the economy has
been expanding but it isn't adding jobs at a fast-enough pace -- at least
150,000 a month -- to absorb the growing population. The unemployment rate
stands at 9.1%, and nearly half the unemployed have been out of work for six
months or more. Housing, the most fragile sector, has yet to rebound. As of
June, home prices were 10.1% below mid-2009 levels. One in five mortgage
borrowers has a loan bigger than the value of the underlying home.
been expanding but it isn't adding jobs at a fast-enough pace -- at least
150,000 a month -- to absorb the growing population. The unemployment rate
stands at 9.1%, and nearly half the unemployed have been out of work for six
months or more. Housing, the most fragile sector, has yet to rebound. As of
June, home prices were 10.1% below mid-2009 levels. One in five mortgage
borrowers has a loan bigger than the value of the underlying home.
Education, once a reliable means to employment and
earning power, has been no insurance against declining incomes during the
recovery. Between June 2009 and June 2011, the median income of households led
by high school graduates fell 8.2%, Sentier estimates. Households led by people
with two-year associates degrees saw incomes fall even more: 11.2%. And even
those led by individuals with bachelor's degrees were squeezed: down 5.9%.
earning power, has been no insurance against declining incomes during the
recovery. Between June 2009 and June 2011, the median income of households led
by high school graduates fell 8.2%, Sentier estimates. Households led by people
with two-year associates degrees saw incomes fall even more: 11.2%. And even
those led by individuals with bachelor's degrees were squeezed: down 5.9%.
Recoveries are hard-pressed to take hold when earnings
tread water or fall behind. Consumers who have less income and smaller
retirement accounts -- or who are underwater on their mortgages -- are likely
to spend less. Worries about finding or losing a job, or paying back debts,
translate into cautious spending. Only 21% of Americans responding to the
October Wall Street Journal/NBC News poll said they expected the economy to
improve in the next 12 months. In the latest Wall Street Journal survey of
economists, respondents said it would take more than a decade for median income
to return to pre-recession levels.
tread water or fall behind. Consumers who have less income and smaller
retirement accounts -- or who are underwater on their mortgages -- are likely
to spend less. Worries about finding or losing a job, or paying back debts,
translate into cautious spending. Only 21% of Americans responding to the
October Wall Street Journal/NBC News poll said they expected the economy to
improve in the next 12 months. In the latest Wall Street Journal survey of
economists, respondents said it would take more than a decade for median income
to return to pre-recession levels.
Amid meager, if any, income growth, U.S. households are
gradually whittling down their debt burdens. Americans are roughly halfway
through efforts to reduce their debt, according to Jerry Webman, senior
investment officer and chief economist at Oppenheimer Funds. Based on data such
as consumer-credit levels, "it looks like we're at a bottoming
point," he said. Until that process is over, it will constrain the
economy, even if the U.S. is spared additional adverse shocks, leaving
Americans groping for a way through an uneven recovery.
gradually whittling down their debt burdens. Americans are roughly halfway
through efforts to reduce their debt, according to Jerry Webman, senior
investment officer and chief economist at Oppenheimer Funds. Based on data such
as consumer-credit levels, "it looks like we're at a bottoming
point," he said. Until that process is over, it will constrain the
economy, even if the U.S. is spared additional adverse shocks, leaving
Americans groping for a way through an uneven recovery.
Retrenching After
Earnings Decline
Annual salary
In 2007: $50,000
In 2007: $50,000
In 2011: $40,000
Groundhog Day, Feb. 2, 2010, isn't a day that Tanya
Ross-Lane of Akron, Ohio, wants to relive.
Groundhog Day, Feb. 2, 2010, isn't a day that Tanya
Ross-Lane of Akron, Ohio, wants to relive.
After 13 years helping workers at Diebold Inc., a maker
of ATMs and security systems, update their job skills through training
programs, she was laid off from her job, which paid $55,000 a year.
of ATMs and security systems, update their job skills through training
programs, she was laid off from her job, which paid $55,000 a year.
At the time, her husband, Michael Lane, also was
unemployed, having lost his job with a home contractor, where he was earning
$15 to $20 an hour pouring concrete and installing cabinets and floors. The
couple sold her 10-year-old Saab, kept their 2003 Jeep, and worked out a lower
interest rate on their mortgage. "We keep things modest. We don't go out
much. We cut off the lights and don't buy steak," Mr. Lane said.
unemployed, having lost his job with a home contractor, where he was earning
$15 to $20 an hour pouring concrete and installing cabinets and floors. The
couple sold her 10-year-old Saab, kept their 2003 Jeep, and worked out a lower
interest rate on their mortgage. "We keep things modest. We don't go out
much. We cut off the lights and don't buy steak," Mr. Lane said.
Ms. Ross-Lane, 54 years old, took a six-week job with the
Census Bureau. She also joined a local church's Community Job Club to keep her
spirits up and network. Through Diebold connections, she learned of an opening:
the Portage Lakes Career Center, a technical school in Uniontown, Ohio, needed
a Human Resource Development Coordinator to design classes to help workers
update skills. Ms. Ross-Lane started Nov. 1, 2010, earning $40,000 a year.
Census Bureau. She also joined a local church's Community Job Club to keep her
spirits up and network. Through Diebold connections, she learned of an opening:
the Portage Lakes Career Center, a technical school in Uniontown, Ohio, needed
a Human Resource Development Coordinator to design classes to help workers
update skills. Ms. Ross-Lane started Nov. 1, 2010, earning $40,000 a year.
But she still goes to Job Club meetings. "So many
people who lost jobs have an identity crisis. They don't know what to do,"
she said. "I want to give back and help other people improve their
interview skills, coach them on careers and offer encouragement."
people who lost jobs have an identity crisis. They don't know what to do,"
she said. "I want to give back and help other people improve their
interview skills, coach them on careers and offer encouragement."
In May 2010, Mr. Lane, 58, landed work through a
temporary agency, earning $9.50 an hour with a window-installation company. At
first, business was good. Last year, when homeowners were receiving tax credits
for new energy-efficient windows, he was working 70 hours a week. The company
promised full-time employment after 120 days, but 16 months in, Mr. Lane is
still a temp -- now working 40 hours a week.
temporary agency, earning $9.50 an hour with a window-installation company. At
first, business was good. Last year, when homeowners were receiving tax credits
for new energy-efficient windows, he was working 70 hours a week. The company
promised full-time employment after 120 days, but 16 months in, Mr. Lane is
still a temp -- now working 40 hours a week.
Prospects aren't great: The company has a hiring freeze.
One coworker with a 22-year tenure is making $12 an hour. Still, Mr. Lane would
like the security and benefits of being a company employee. "It's clean
and the work is not extremely hard," he said. "I could be working at
a lot worse places."
-- Clare Ansberry
like the security and benefits of being a company employee. "It's clean
and the work is not extremely hard," he said. "I could be working at
a lot worse places."
-- Clare Ansberry
Retrenching After
Earnings Decline
Annual salary
In 2007: $50,000
In 2011: $40,000
In 2007: $50,000
In 2011: $40,000
Groundhog Day, Feb. 2, 2010, isn't a day that Tanya
Ross-Lane of Akron, Ohio, wants to relive.
Ross-Lane of Akron, Ohio, wants to relive.
After 13 years helping workers at Diebold Inc., a maker
of ATMs and security systems, update their job skills through training
programs, she was laid off from her job, which paid $55,000 a year.
of ATMs and security systems, update their job skills through training
programs, she was laid off from her job, which paid $55,000 a year.
At the time, her husband, Michael Lane, also was
unemployed, having lost his job with a home contractor, where he was earning
$15 to $20 an hour pouring concrete and installing cabinets and floors. The
couple sold her 10-year-old Saab, kept their 2003 Jeep, and worked out a lower
interest rate on their mortgage. "We keep things modest. We don't go out
much. We cut off the lights and don't buy steak," Mr. Lane said.
unemployed, having lost his job with a home contractor, where he was earning
$15 to $20 an hour pouring concrete and installing cabinets and floors. The
couple sold her 10-year-old Saab, kept their 2003 Jeep, and worked out a lower
interest rate on their mortgage. "We keep things modest. We don't go out
much. We cut off the lights and don't buy steak," Mr. Lane said.
Ms. Ross-Lane, 54 years old, took a six-week job with the
Census Bureau. She also joined a local church's Community Job Club to keep her
spirits up and network. Through Diebold connections, she learned of an opening:
the Portage Lakes Career Center, a technical school in Uniontown, Ohio, needed
a Human Resource Development Coordinator to design classes to help workers
update skills. Ms. Ross-Lane started Nov. 1, 2010, earning $40,000 a year.
Census Bureau. She also joined a local church's Community Job Club to keep her
spirits up and network. Through Diebold connections, she learned of an opening:
the Portage Lakes Career Center, a technical school in Uniontown, Ohio, needed
a Human Resource Development Coordinator to design classes to help workers
update skills. Ms. Ross-Lane started Nov. 1, 2010, earning $40,000 a year.
But she still goes to Job Club meetings. "So many
people who lost jobs have an identity crisis. They don't know what to do,"
she said. "I want to give back and help other people improve their
interview skills, coach them on careers and offer encouragement."
people who lost jobs have an identity crisis. They don't know what to do,"
she said. "I want to give back and help other people improve their
interview skills, coach them on careers and offer encouragement."
In May 2010, Mr. Lane, 58, landed work through a
temporary agency, earning $9.50 an hour with a window-installation company. At
first, business was good. Last year, when homeowners were receiving tax credits
for new energy-efficient windows, he was working 70 hours a week. The company
promised full-time employment after 120 days, but 16 months in, Mr. Lane is
still a temp -- now working 40 hours a week.
temporary agency, earning $9.50 an hour with a window-installation company. At
first, business was good. Last year, when homeowners were receiving tax credits
for new energy-efficient windows, he was working 70 hours a week. The company
promised full-time employment after 120 days, but 16 months in, Mr. Lane is
still a temp -- now working 40 hours a week.
Prospects aren't great: The company has a hiring freeze.
One coworker with a 22-year tenure is making $12 an hour. Still, Mr. Lane would
like the security and benefits of being a company employee. "It's clean
and the work is not extremely hard," he said. "I could be working at
a lot worse places."
-- Clare Ansberry
like the security and benefits of being a company employee. "It's clean
and the work is not extremely hard," he said. "I could be working at
a lot worse places."
-- Clare Ansberry
As Jobs Vanish, Sticking to Knitting
Student-loan and car debt In 2007: $0
Student-loan and car debt In 2007: $0
In 2011: $48,500
Shelby Stofle graduated in December from the University
of California at Berkeley with $10,250 in student-loan debt -- and no job
offers from a dozen applications.
of California at Berkeley with $10,250 in student-loan debt -- and no job
offers from a dozen applications.
The 24-year-old had hoped to work in environmental
conservation or sustainable agriculture but struck out even at a grocery store
near her rural hometown of Suisun City, Calif.
conservation or sustainable agriculture but struck out even at a grocery store
near her rural hometown of Suisun City, Calif.
"It wasn't what everybody tells you is going to
happen when you graduate," said Ms. Stofle, who studied abroad in Ghana
while in college, raises chickens in her backyard and dyes wool as a hobby.
happen when you graduate," said Ms. Stofle, who studied abroad in Ghana
while in college, raises chickens in her backyard and dyes wool as a hobby.
Discouraged, she shifted gears and signed up in January
for a free state-run training program near Suisun City. Over several months,
she learned how to install solar panels and other skills, but nothing
translated into a job.
for a free state-run training program near Suisun City. Over several months,
she learned how to install solar panels and other skills, but nothing
translated into a job.
In March, Ms. Stofle was hired to tend and sell plants
for a nursery. But her hours have been cut and she now works part-time, taking
home about $1,200 a month after taxes.
for a nursery. But her hours have been cut and she now works part-time, taking
home about $1,200 a month after taxes.
"You hear you're going to get into a career, and
it's going to start paying a lot -- that's why you go to school," she
said. "But I make as much now as my 17-year-old co-worker. I took the time
and spent the money to go to school. Did it mean anything?"
it's going to start paying a lot -- that's why you go to school," she
said. "But I make as much now as my 17-year-old co-worker. I took the time
and spent the money to go to school. Did it mean anything?"
Her husband, Greg King, a 29-year-old student at
California State University at Sacramento, brings in $700 after taxes each
month as a part-time food clerk and bookkeeper at grocery chain Safeway.
California State University at Sacramento, brings in $700 after taxes each
month as a part-time food clerk and bookkeeper at grocery chain Safeway.
That leaves the couple scraping to pay their monthly
bills, including $525 in rent, a $300 car payment, and Ms. Stofle's
student-loan payment of $110. Their expenses will increase when Mr. King
graduates in December with $30,000 in student loans.
bills, including $525 in rent, a $300 car payment, and Ms. Stofle's
student-loan payment of $110. Their expenses will increase when Mr. King
graduates in December with $30,000 in student loans.
Ms. Stofle just learned that the nursery won't need her
after the busy season ends in November -- although she may be asked back in
February, when business ramps up. With many employment options exhausted, she
said she feels her best shot is to set up her own business, selling her
hand-made scarves at craft fairs and farmers' markets. Meanwhile, Mr. King, who
is studying for his bachelor's degree in criminal justice, said he "didn't
want to put all my eggs in one basket" so he also is training to be an
emergency medical technician and pursuing an electrician's apprenticeship.
after the busy season ends in November -- although she may be asked back in
February, when business ramps up. With many employment options exhausted, she
said she feels her best shot is to set up her own business, selling her
hand-made scarves at craft fairs and farmers' markets. Meanwhile, Mr. King, who
is studying for his bachelor's degree in criminal justice, said he "didn't
want to put all my eggs in one basket" so he also is training to be an
emergency medical technician and pursuing an electrician's apprenticeship.
All the hustling is hard on the couple's marriage.
Because of work schedules, they sometimes go days without seeing each other.
"We're really worried and stressed, but we know that someday it'll pay
off," Ms. Stofle said. "That's our hope, at least."
-- Vauhini Vara
"We're really worried and stressed, but we know that someday it'll pay
off," Ms. Stofle said. "That's our hope, at least."
-- Vauhini Vara
Restaurant Gives Way to Food Truck
Weekend sales in 2007: $7,000, from 18 goats
In 2011: $4,000, from nine goats
In 2011: $4,000, from nine goats
When Cupertino Cid came to the U.S. in 1988, the Mexican
immigrant brought an expertise in preparing barbacoa, a goat-meat specialty
that is slow-cooked overnight. "I always hoped to make a living from
barbacoa," he said.
immigrant brought an expertise in preparing barbacoa, a goat-meat specialty
that is slow-cooked overnight. "I always hoped to make a living from
barbacoa," he said.
After 15 years managing pizza parlors in Los Angeles, Mr.
Cid, 51 years old, realized his dream. He opened a small restaurant -- 12
stools around a counter -- and an outdoor stall at the Alameda Swap Meet, a
market frequented by fellow immigrants.
Cid, 51 years old, realized his dream. He opened a small restaurant -- 12
stools around a counter -- and an outdoor stall at the Alameda Swap Meet, a
market frequented by fellow immigrants.
In 2007, he employed four full-time workers. Each
weekend, sales topped $7,000; he grilled 18 goats to make enough barbacoa
tacos, burritos and sandwiches to meet demand. "There were lines going
back farther than you could see," Mr. Cid recalled.
weekend, sales topped $7,000; he grilled 18 goats to make enough barbacoa
tacos, burritos and sandwiches to meet demand. "There were lines going
back farther than you could see," Mr. Cid recalled.
When the economy began to sputter, the swap meet lost
customers -- and Mr. Cid's establishments began to lose money. Two years ago,
he closed the restaurant and stall. He bought a food truck, which he parks
customers -- and Mr. Cid's establishments began to lose money. Two years ago,
he closed the restaurant and stall. He bought a food truck, which he parks
Saturdays and Sundays on the edge of the swap meet.
Retrenching has been painful for Mr. Cid, his wife,
Maria, and their four children. Debts have mounted and the family sometimes is
behind the $1,500 monthly rent on their three-bedroom apartment, he said.
Maria, and their four children. Debts have mounted and the family sometimes is
behind the $1,500 monthly rent on their three-bedroom apartment, he said.
These days, it takes just nine goats to feed the typical
weekend crowd, and sales rarely top $4,000. To keep costs down, everyone in the
family helps out on the truck.
weekend crowd, and sales rarely top $4,000. To keep costs down, everyone in the
family helps out on the truck.
On weekends, Ana, 20, and Carlos, 18, both at the
University of California in Santa Barbara, head home to pitch in. "It's
been tough juggling school and work," Carlos said. Ana and Carlos cover
their $31,000-per student annual tuition with a grants, loans and part-time
work -- along with help from their father. Ana worries about their financial
circumstances. But, "my parents tell us that all we should focus on is
going to school," she said.
University of California in Santa Barbara, head home to pitch in. "It's
been tough juggling school and work," Carlos said. Ana and Carlos cover
their $31,000-per student annual tuition with a grants, loans and part-time
work -- along with help from their father. Ana worries about their financial
circumstances. But, "my parents tell us that all we should focus on is
going to school," she said.
The youngest, 11-year-old Alfredo, delivers food orders
to shopkeepers and picks up supplies. "I know the whole swap meet by
heart," declared the sixth-grader, who earns $20 a weekend in pocket
money.
to shopkeepers and picks up supplies. "I know the whole swap meet by
heart," declared the sixth-grader, who earns $20 a weekend in pocket
money.
Alfredo likes playing videogames. He wishes he could get
a PlayStation 3 console. "My parents said it's expensive for now," he
said, adding that he hopes to save money for one, after buying family Christmas
presents.
a PlayStation 3 console. "My parents said it's expensive for now," he
said, adding that he hopes to save money for one, after buying family Christmas
presents.
"Times are tough but I don't give up," Mr. Cid
said. "I'm sure my children's future won't be selling tacos."
-- Miriam Jordan
said. "I'm sure my children's future won't be selling tacos."
-- Miriam Jordan
Corporate
Safety Net
Slips Away
Safety Net
Slips Away
College savings
In 2007: about $100,000
In 2011: $22,000
In 2007: about $100,000
In 2011: $22,000
Terry Sullivan spent more than a decade at Verizon
Communications Inc., working his way up to become a marketing director at the
telecom giant.
Communications Inc., working his way up to become a marketing director at the
telecom giant.
But when it came to marketing himself, Mr. Sullivan's
initial efforts fell flat. After being laid off in December 2009 -- among about
26,000 workers let go -- Mr. Sullivan spent six months at home in Flower Mound,
Texas, applying for jobs online.
initial efforts fell flat. After being laid off in December 2009 -- among about
26,000 workers let go -- Mr. Sullivan spent six months at home in Flower Mound,
Texas, applying for jobs online.
When his applications got no response -- despite
experience such as overseeing a $105 million annual budget and more than 1,000
employees and contractors in his most recent post -- the 56-year-old realized,
experience such as overseeing a $105 million annual budget and more than 1,000
employees and contractors in his most recent post -- the 56-year-old realized,
"My resumes were falling into a sinkhole," and changed tack.
He began attending a Dallas-area support group for job
seekers and setting up events for his local chapter of the American Marketing
Association. In late 2010, Mr. Sullivan's networking efforts brought him to a
presentation given by Mark Bourg, who runs MarketCision, a Dallas-area
marketing firm. Impressed, Mr. Sullivan approached Mr. Bourg after his talk.
seekers and setting up events for his local chapter of the American Marketing
Association. In late 2010, Mr. Sullivan's networking efforts brought him to a
presentation given by Mark Bourg, who runs MarketCision, a Dallas-area
marketing firm. Impressed, Mr. Sullivan approached Mr. Bourg after his talk.
The relationship resulted in a consulting gig. He is still looking for
full-time work.
full-time work.
These days, instead of family trips to the movies and
restaurant dinners, the Sullivan family will spend evenings helping mom,
Cydney, decorate the purses she sells at craft fairs.
restaurant dinners, the Sullivan family will spend evenings helping mom,
Cydney, decorate the purses she sells at craft fairs.
The Sullivans have had to raid the college money they set
aside for their son and daughter -- a high school senior and junior,
respectively.
aside for their son and daughter -- a high school senior and junior,
respectively.
-- Ben Casselman
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