American Families are Being Wiped Out, Net Worth Plunges 40%
Despite some modest improvement recently – housing prices have begun to stabilize and unemployment has ticked downward – the Federal Reserve said Monday, the median net worth of American families plunged nearly 40 percent from 2007 to 2010.
Specifically, median net worth has gone from $126,400 before the Great Recession to $77,300 in 2010.
According to the Washington Post:
Over a span of three years, Americans watched progress that took almost a generation to accumulate evaporate. The promise of retirement built on the inevitable rise of the stock market proved illusory for most. Homeownership, once heralded as a pathway to wealth, became an albatross.
The findings underscore the depth of the wounds of the financial crisis and how far many families remain from healing. If the recession set Americans back 20 years, economists say, the road forward is sure to be a long one. And so far, the country has seen only a halting recovery.
According to the Federal Reserve, the brunt of the upheaval fell hardest on middle class Americans. In years gone by, America had a strong middle class who, with their significant purchasing power, drove the economy.
But, that’s no longer the case. Business Insider states:
Over the past couple of decades, the American economy has increasingly mostly worked for the richest Americans, at the expense of everyone else. As a result, the disparity between “the 1%” and “the 99%” has hit a level not seen since the 1920s. And there is a widespread and growing sense that life here is not fair or right.
America’s middle class needs to have the ability to spend again as that disposable income helps drive the economy for everyone. If not, the entire economy will continue to suffer, and more so, for those in the middle.