Long-Term Decline in US Standard of Living: Rockefeller Foundation

The economic insecurity of the American families is greater than at any time on record, according to a new report from the Rockefeller Foundation.

One in five Americans, the report found, has experienced a decline of 25 percent or more in available household income in the past – Cheney / Bush / Obama – decade. 

The typical American experiencing such a plunge will require six to eight years just to climb back to previous levels of income.

The economic insecurity of the American families is greater than at any time on record, according to a new report from the Rockefeller Foundation.

One in five Americans, the report found, has experienced a decline of 25 percent or more in available household income in the past – Cheney / Bush / Obama – decade. 

The typical American experiencing such a plunge will require six to eight years just to climb back to previous levels of income.

Measuring the depth and breadth of the recession, and the havoc it has caused for Americans, has become a sort of cottage industry in academia and the nonprofit research world.

But what sets apart this Rockefeller examination and several recent studies for other institutions is that

by taking the longer view, they reveal that problems are deepening with each passing decade.

“Economic insecurity has increased over the last quarter-century,” 

states one of the report’s co-authors, Jacob Hacker, a Yale professor.

“The level of economic insecurity experienced by Americans was greater than at any time over the past quarter-century.”

The report, which draws on a variety of Census and Federal Reserve data, notes that

in 1985, 12.2 percent of Americans experienced an economic loss sufficient to render them economically insecure.

During the recession of the early 2000s, the insecurity rose to 17 percent; today it is 25 percent.

The narrative arc is not reassuring.

“The ‘new normal’ in each subsequent economic cycle has featured a higher level of economic insecurity,”

the foundation’s Web site notes

There are many factors complicit in the increased agitation of the American middle class,

from declining real wages to the three-decade erosion of pensions and health plans

and the new insistence of corporate boards on reducing company matches for 401(k) plans.

Overall income and family wealth has grown during this time.

But the gains are far from equal, according to this piece in the New York Times.

After-tax income rose by 21 percent for the middle fifth of American households,

but increased by 112 percent for the richest 10 percent of households

and by 256 percent for the top 1 percent, according to Mr. Hacker’s report.

Finally, the Rockefeller Foundation report echoes the work of the Brandeis Institute on Assets and Social Policy,

which found that by almost every measure, black and Latino Americans have fared worse.

“African-Americans and Hispanics stand out as uniquely vulnerable to the economic insecurity,” the report found.

With the national economy now sitting becalmed, and many indicators hinting at a downward trend,

some commentators have tended to talk of psychological factors,

as if to suggest that Americans need only to snap out of their funk.

This report suggests that this funk is grounded in prosaic reality far more than many want to acknowledge.