This chart clearly illustrates that median household income has been declining over the years, despite big claims from the BLS that more people are working and that the economic outlook is improving. How can the situation be getting better, if people are working longer hours and taking home less pay? In fact, since 2000, household income for every race has been dropping. This is not what an economic recovery should look like. This is more like an economic illusion.
Some facts to consider
Things get worse, when adjusted for inflation, today’s average hourly wage has the same purchasing power did back in 1980. A salary of $4.03 an hour, in 1973 has the same purchasing power as roughly $23.00 (to be exact the figure is $22.41). The average hourly earnings in the US as of Dec 2015 are $25.24 per hour. This shows you how bad things are right now. Don’t focus on the dollar amount, but on what that dollar can buy you today and sadly a dollar, today buys you a lot less than it bought you in 1973, 1980, 1990 and even 2000.
Things get worse, when adjusted for inflation, today’s average hourly wage has the same purchasing power did back in 1980. A salary of $4.03 an hour, in 1973 has the same purchasing power as roughly $23.00 (to be exact the figure is $22.41)
Conclusion
The recession has not ended at all. The massive rally in the stock market is just masking reality. Most individuals are too poor to invest in the stock market, and this is why more Americans drink coffee today as opposed to owning stocks. Maybe they are not too poor to invest, but they certainly think so and hence avoid the markets. Additionally, while the salaries appear to be rising when inflation is factored in, people are working more for less and are having a hard time making ends meet. This is why there are so many individuals on food stamps and why the number of families requiring financial assistance ahs continued to soar year after year during this so-called economic recovery.
This article is provided courtesy of the Tactical Investor, where psychology and technical analysis intersect seamlessly.
