"The inflation-adjusted income of the median household—smack in the middle of the populace—fell 4.8% between 2000 and 2009, even worse than the 1970s, when median income rose 1.9% despite high unemployment and inflation. Between 2007 and 2009, incomes fell 4.2%."
The above paragraph is from a Wall Street Journal article describing the pain the American middle class has experienced over the "lost decade." The media has generally referred to the "lost decade" for the lack-luster results of the S&P 500 from 2000-2009. While I disagree that this time period was a lost decade for a well-allocated investor, I do agree with the author of this article that it was a lost decade in terms of real or inflation-adjusted income.
In his autobiography, Alan Greenspan describes this phenomenon and says how the mass influx of labor from China and India kept prices and inflation relatively low world-wide for an extended period of time. The good news, he says, is that as these economies are continually developed and experience a rising middle class, world-wide wages, including those in America, will rise. The question always seems to come back to when.
As we wait, it's quite likely that the disparity between the 'haves' and the 'have nots' will continue to increase, as described in the article. If this trend continues, the societal and political implications may be great.
To Your Prosperity,
Kevin Kroskey, CFP, MBA
The above paragraph is from a Wall Street Journal article describing the pain the American middle class has experienced over the "lost decade." The media has generally referred to the "lost decade" for the lack-luster results of the S&P 500 from 2000-2009. While I disagree that this time period was a lost decade for a well-allocated investor, I do agree with the author of this article that it was a lost decade in terms of real or inflation-adjusted income.
In his autobiography, Alan Greenspan describes this phenomenon and says how the mass influx of labor from China and India kept prices and inflation relatively low world-wide for an extended period of time. The good news, he says, is that as these economies are continually developed and experience a rising middle class, world-wide wages, including those in America, will rise. The question always seems to come back to when.
As we wait, it's quite likely that the disparity between the 'haves' and the 'have nots' will continue to increase, as described in the article. If this trend continues, the societal and political implications may be great.
To Your Prosperity,
Kevin Kroskey, CFP, MBA