American Household Income Declines As Cost Of Living Increases And Many Consumers Searching For Relief
September 01, 2012 (PRLEAP.COM) Business NewsAccording to a recent report from Sentier Research, a well-respected Washington firm that specializes in demographic and economic research, Americans' finances are in worse shape now than they were three years ago.
Since the recent recession's official end in June 2009, Americans' average household income has declined by nearly five percent after adjusting for inflation. By comparison, household incomes declined by just 2.6 percent during the recession itself, which lasted for about 18 months in 2008 and 2009.
According to the report, incomes are now over eight percent lower than they were in 2000, when everyday items like food, fuel and clothing cost far less than they do today.
The Sentier report points to an even more troubling financial trend. Between 2007 and 2010, when the economy had just begun to recover from the recession, the net worth of the average American household plummeted by 39 percent.
The value of the average American household is now lower than at any point since 1992. In other words, the recent recession erased 20 years of hard-fought economic gains.
With the unemployment rate hovering above eight percent and over 40 percent of the total population of unemployed workers remaining jobless for six months or more, the economy may be stuck in a rut for a while.
Although the recession left no part of the country untouched, certain areas fared worse than others. During the three-year period, income levels fell by 8.5 percent in the West, 4.9 percent in the South and Northeast and just over one percent in the Midwest.
Recent productivity gains not covered in the Sentier report lend increased urgency to its findings. During the three years since the recession ended, American corporate profits grew at a healthy pace thanks largely to the contributions of existing workers.
In other words, American companies avoided making new hires by asking more of their current employees. Improved corporate earnings are great news for individual companies and the workers that they employ, but they have yet to spur meaningful job creation.
In response to falling incomes, higher unemployment and plummeting household net worth, American consumers have taken on more debt than ever before. As the cost of food, gasoline and heating oil continues to rise, families everywhere are beginning to take drastic measures just to keep their heads above water.
Millions of Americans now routinely run credit card balances that they can't afford to pay, adding thousands of dollars per year in interest charges to an already crushing debt burden. Many struggle just to make the minimum payments on their credit card bills each month.
Running high credit card balances is a costly and dangerous game. To get their spiraling debt situations under control, countless hard-working Americans have so far been forced to declare bankruptcy and put their families through years of untold pain. Thousands more will follow them into the financial abyss this year.
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National Debt Relief's pioneering debt relief program has a proven track record of pulling American families out of debt. Like bankruptcy, debt settlement can reduce dramatically reduce borrowers' outstanding loan balances and provides a clear path to financial freedom. Unlike bankruptcy, it doesn't require the services of a lawyer and won't permanently damage its clients' ability to borrow money.
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