The Uneven Economic Recovery

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The United States economy took a dive in 2008. Since that time we have been promised a recovery, but do you feel like the economy has recovered in your home? Well, according to Ben Casselman, it depends on who you are.

The Recovery Gap

With this recovery, there have been two main categories that have reacted quite differently. For those that have held a job for quite some time and are in the upper levels of income (over $50,000), the economy has recovered quickly and effectively. It has almost felt like there has been no recession at all.

For those that are younger and are in the lower income levels, they have felt the recession the most and they are still feeling it. It absolutely makes sense. There are a ton of people looking for low-skill jobs, and the demand for products and services are down as well. A high supply of employees and a low demand for products makes for low wages and few job openings.

% wage increase for the two different age/income groups  *ref. the wsj
% wage increase for the two different age/income groups *ref. the wsj

Real Life Stories

Within the Wall Street article, they follow the life of a man that has worked at Burger King for the past 9 years. We’ll call him Mr. Bill Whopper. When Whopper started, he made $8 an hour. Since he has started, he has only earned one raise….for 15 cents. While he does still have his job, his pay has not changed at all since the recession, and his hours have been cut from full time to part time. In order for Bill to survive, he is forced to live with his brother (to avoid rent) and budget his money toward only food and clothing. It is no way to live, but since his recession has not ended, this is how he has to live.

I have been very fortunate in my life. It was difficult to find a job after college in 2008, but once I got into a large corporation and was able to prove myself, I have barely felt this recession at all. In fact, with both my full-time job and my website, I have increased my income by $45,000. But what if I wasn’t able to get my college education and experience? Well then I would be struggling just like Mr. Whopper.

Is the Recovery Being Affected by Obamacare?

When I read this article and process it, I can’t help but think that the Affordable Care Act has something to do with the lagging economy. I know of many local employers that are now cutting employee hours to part-time so they don’t have to mess with the new healthcare laws. In my mind, these changes are hurting those that have already been negatively affected by the recession – those that are young and/or in the lower income bracket.

What do you think?

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Money

Derek

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

6 Comments

  1. The young ones are the most affected by the economic problems because they do not have the experience and expertise that older people have when it comes to work, it is easier for companies to exploit that in order to create cut backs on certain operational expenses that they will incur.

    • Experience is huge in today’s world. Everyone wants at least 3 years worth of experience, but wouldn’t give you the chance to gain the experience at their company. That makes it incredibly difficult to start out. Universities that have mandatory internships are the best ones, because then you at least have some experience when you’re looking for a job out of college.

  2. Economists tell us the country climbed out of its recession four years ago. But most Americans would disagree.A new McClatchy-Marist poll shows that 54% of respondents think the country is still in a recession. About a third think the recession is over, and 8% aren’t sure.It doesn’t take an economic degree to see why. Although the economy is recovering in fits and starts, many Americans are still unemployed or underemployed. They’re working more part-time jobs, one of the largest categories for new employment in the recovery. They’re also seeing smaller paychecks after the payroll tax rate returned to 6.2% in January.Mortagages are still underwater, and housing loans are tough to get. Interest rates are so low that saving money seems fruitless.In short, it just doesn’t feel like we’re in a recovery.But there is good news. The 54% who think we’re in a recession is down from the 63% who felt the same way in March. In fact, the percentage of Americans holding this opinion is at its lowest point since 2008.Another interesting note from the poll is that Americans are pretty evenly split about whether things will get better economically for them in the next year. Nearly a third said yes, a third said their situation will be worse, and a bit more than a third said things will stay the same.
    Rosemarie Camacho recently posted..No last blog posts to return.

    • I remember when the government announced that we were officially out of the recession. With over 50% of people still feeling the impact today, I’d say the government was a bit premature in their announcement….

  3. I never understood the whole part time thing in the affordable care act. What is the purpose of that? All it seems to do is destroy jobs and make people work less hours.

    On another note; I was able to overcome the lacking experience issue by networking. The people I met in college and in the first few years of my career really helped me finding a job when I needed one, and also allowed me to prove myself and how valuable I can be to many different people.
    Levi Blackman recently posted..Diversifying Your Portfolio

    • Basically, small company owners are fearful because they don’t know how the healthcare changes will affect their businesses. So, instead of taking a beating by the new Affordable Care Act, they decide to only employ people part time so that they (the owners) will no longer be responsible for the employees’ insurance.


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