The unemployment rate is high, poverty rates are on the rise and the average salary in the nation has declined, so it should come as no surprise that the time between 2000 and 2010 is considered a lost decade for the middle class. So what is a lost decade? Essentially it is a decade in which no growth was realized — or in this specific case, a decade with negative growth.
In 2000, the median household income in the United States was $53,164. This was up about $5,000 from 1990 figure of $48,423. Unfortunately, the decade between 2000 and 2010 saw a 7 percent decline in incomes. Last year, the median household income in the nation was $49,445. This is similar to the figures seen in 1996.
Unfortunately for many Americans, this was not an across-the-board decline. According to a CNNMoney.com report on the topic, “those losses disproportionately hit the lowest 60 percent of Americans, while the richest 40 percent actually gained wealth, relative to the entire U.S. economy.” This definitely lends some credence to the concept that the rich keep getting richer and the poor keep getting poorer.
While a decrease in median household income is of concern, the increase in poverty rates is equally disconcerting. The nation is not as upwardly mobile as it once was, and we are seeing more people drop from the middle class down into poverty. In fact, some previously high-income earning individuals were hit so hard by the Great Recession that they have found themselves among the lowest income earners today.
As a typically optimistic person, it is hard to not get down reading all of the negative economic news these past few months. I don’t share it with you to be a negative Nelly but more to draw attention to the issue that something needs to be done. Other countries, like China and India, are seeing an increase in their middle class while our nation sees a decline. An entire decade of progress has been lost, and it may take the rest of this decade to make up for these losses.