A new comprehensive report by the Federal Reserve finds that most Americans’ incomes have fallen since 2007, and the recovery hasn’t brought them back.
This post comes from Marilyn Lewis at partner site Money Talks News.
The verdict is in on the economic recovery, and it’s what you may have suspected: The only Americans who have really recovered are wealthy ones.
The majority of U.S. families could not even handle an unanticipated expense as small as $400, Federal Reserve Chair Janet Yellen says a new Federal Reserve survey has revealed. Those families would need to sell something, borrow or not pay, she said.
Financial crisis looming for many families
“For many lower-income families without assets, the definition of a financial crisis is a month or two without a paycheck, or the advent of a sudden illness or some other unexpected expense,” Yellen said, speaking to the Corporation for Enterprise Development, a nonprofit organization whose goal is financial independence for lower-income families.
She described more findings from the Fed’s Survey of Consumer Finances, a major study done every three years. This year’s study is called “Changes in U.S. Family Finances from 2010 to 2013: Evidence from the Survey of Consumer Finances” (.pdf file). Among the findings:
- The median net worth of the bottom 20 percent of U.S. households, some 25 million households in the lowest income bracket, was just $6,400. The median is the point in the middle for the group; half had a net worth that was higher, and half were lower.
- Many of those families had no savings at all. For some, their debts exceeded assets.
- The families in the bottom 40 percent in income had lost household wealth since 2010. “One reason is that income has continued to fall for these families,” she said……more