It’s official: Wall Street has recovered from the recession. Yesterday,
The Dow Jones Industrial Average rose to its highest level ever, erasing losses from the financial crisis after a four-year rally fueled by the fastest profit growth since the 1990s and monetary stimulus from the Federal Reserve. About $10 trillion has been restored to U.S. equities as retailers, banks and manufacturers led the recovery from the worst bear market since the 1930s.
Meanwhile, back in the real world, America’s middle class is still losing ground.
In the wake of the Great Recession, millions of middle-class people are being pinched by stagnating incomes and the increased cost of living. America’s median household income has dropped by more than $4,000 since 2000…
The unemployment rate has been getting better – but for most American families, life is still getting worse.
One of the most disturbing trends of the recession is still very far from being reversed. America’s middle-class jobs have been decimated since 2007, replaced largely by low-wage jobs.
In other words, wages are still falling. From the San Francisco Federal Reserve Bank:
Many middle-class workers have lost their jobs and, if they have been able to secure new employment at all, find themselves earning far lower wages post-recession… on average over the next 25 years, these workers will earn 11% less [than they would have, if they hadn’t lost their jobs during the recession].
Back in Washington, DC, what are the politicians doing?
- House Republicans believe they’re “on the side of the angels” on defense spending. They are coalescing around a budget deal that would allow the Pentagon more flexibility to move money around (for instance, using savings that resulted from troop withdrawals to restore funding to military contractors).
- House Budget Committee Chairman Paul Ryan is working on next year’s budget. Should be interesting to read. The last time he proposed a budget, a whopping 62% of the budget cuts came from programs that help low-income people.
- And Ryan still plans to privatize Medicare. His only question: what should the cut-off age be? Should current Medicare benefits be guaranteed for people 55-and-older? 56-and-older? Even older than that? [The League of Women Voters analyzed Ryan’s proposal and calculated that the voucher system would pay only 32% of the cost of covered procedures, leaving patients to pay the other 68% of the cost. Read Time Magazine’s piece on medical costs here.]
Obviously, last November’s election didn’t change the dynamics in Washington.
What is it going to take, to do that?