Most Americans believe that the economy is currently in recession, though clearly that is not the case. (A recession is defined as at least two consecutive quarters of negative economic growth.)
Our economy has been resilient: growing, despite higher interest rates and other headwinds. Some have called the gloomy mood a “vibesession.”
Why is the average American so fiscally gloomy when in fact the US has the world’s strongest economy? Because for far too many, economic life is not getting better. Average wage workers - essential workers we called them not too long ago - have been hard hit. Happy days are not here again (or ever were.)
As the affluent have prospered, middle and lower income communities have regressed.
This is not necessarily a new thing, but since the pandemic, and the wave of high inflation that followed, average Americans have been feeling slammed. Income disparities have increased, dramatically.
According to the Federal Reserve Bank of St. Louis, the numbers (based on 2022 data, the latest available) are stark:
The top 10% of households by wealth had $6.7 million on average. As a group, they held 66.9% of total household wealth.
The bottom 50% of households by wealth had $50,000 on average. As a group, they held only 2.5% of total household wealth.
People of color have suffered even worse, economically.
Black families owned about 23 cents for every $1 of white family wealth, on average.
Hispanic families owned about 19 cents for every $1 of white family wealth, on average.
As horrific as they are, these figures actually represent some progress. According the the St. Louis Fed, racial wealth gaps are the lowest they have been in two decades.
We see the financial disparity manifest itself in many ways, with housing costs being especially problematic.
According to data from 2022, home prices have increased 1,608% in the past five decades, while inflation had increased just 644% in comparison. In other words, Americans have seen a steep decline in their purchasing power when it comes to homeownership.
Wages have not kept pace with inflation. Minimum wage workers cannot afford basic, market-rate housing in many parts of the county.
Those higher up the income scale have not fared much better.
Locally, the impact of income disparities is top of mind, as this story in our local media notes: “When a house went from $150,000 or $200,000 six years ago, to $600,000 now, that’s a big jump…Which, in essence, makes it difficult for a young person to buy a home or even rent an apartment in Columbia County.” - Matt Murrell, Chair, Columbia County Board of Supervisors.
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Make no mistake: inequality of any kind is unacceptable and unconscionable. And what the income inequality statistics actually represent is the failure of our society to “lift as we climb.”
And so, lifting as we climb, onward and upward we go, struggling and striving, and hoping that the buds and blossoms of our desires will burst into glorious fruition ere long. With courage, born of success achieved in the past, with a keen sense of the responsibility which we shall continue to assume, we look forward to a future large with promise and hope. Seeking no favors because of our color, nor patronage because of our needs, we knock at the bar of justice, asking an equal chance.’
- Mary Church Terrell
What can we do? How can you help?
Is there hope for meaningful change?
Of course, there’s hope…and more than that, there are reasons to believe we can manifest the changes we need.
More to come …