Middle-income Americans have struggled as real wages and real estate values have plummeted in the past few years. Businesses are reluctant to give raises or hire new employees, and the jobs that are returning may not be the deliverance some think it is. Getting ahead will be getting harder for some time.
Pay for working stiffs barely moves
Though the news of accelerated hiring was considered a sign of a possible return to health for the economy, real wages are still in the gutter for most people. As of March of 2011, according to CNN, American workers made an average of $22.87 an hour, which was an increase of 1 cent from January of 2011. Average wages have been barely growing, increasing by 0.7 percent for all workers in the same period, according to Bloomberg. Wages differ from earnings, as earnings are money received and wages are rates at which people are paid. The average workweek of 34.3 hours didn’t change from February to March.
Household wealth tumbling
American household wealth has also been on the decline, as the Federal Reserve estimates the average American household lost about 18 percent of its net worth in the recessionary period, according to USA Today. The loss was biggest for the wealthy, as the wealthiest of Americans have greater holdings in stock markets and other investments as well as larger real estate holdings. A survey that the Federal Reserve used found that the median home value for survey subjects fell from $207,000 to $176,000 from late 2007 to 2009. The survey was conducted by re-surveying more than 3,800 families who had participated in the 2007 Survey of Consumer Finances. Americans who have the bulk of their net worth in their primary residence will have a harder time recovering losses the longer that real estate values stay low.
Dismal year ahead
Economic indicators are pointing to conditions becoming harsher. Employers are hiring, but won’t pay workers more than they have to. Because the job market has been dismal over the past few years, employers feel that employees will take whatever they can get. Making matters worse is the increasing price of oil and price of gasoline, and the rising cost of food and other consumer items. If price increases keep up, things are likely to get quite warm for the middle class, who will have to cut back to afford the necessities on lower wages.