Thursday, September 11, 2014

qotd: Federal Reserve report on consumer finances

Federal Reserve Bulletin
September 2014

Changes in U.S. Family Finances from 2010 to 2013: Evidence from the
Survey of Consumer Finances

The Federal Reserve Board's triennial Survey of Consumer Finances (SCF)
collects information about family incomes, net worth, balance sheet
components, credit use, and other financial outcomes. The 2013 SCF
reveals substantial disparities in the evolution of income and net worth
since the previous time the survey was conducted, in 2010.

Family incomes

* Between 2010 and 2013, mean (overall average) family income rose 4
percent in real terms, but median income fell 5 percent, consistent with
increasing income concentration during this period.

* Families at the bottom of the income distribution saw continued
substantial declines in average real incomes between 2010 and 2013,
continuing the trend observed between the 2007 and 2010 surveys.

* Families in the middle to upper-middle parts (between the 40th and
90th percentiles) of the income distribution saw little change in
average real incomes between 2010 and 2013 and thus have failed to
recover the losses experienced between 2007 and 2010.

* Only families at the very top of the income distribution saw
widespread income gains between 2010 and 2013.

* The differentials in average income growth between 2010 and 2013 are
also observed for other family groupings in which large differences in
income levels are observed, notably across education groups, by race and
ethnicity, homeownership status, and levels of net worth.

Net worth

* Consistent with income trends and differential holdings of housing
and corporate equities, families at the bottom of the income
distribution saw continued substantial declines in real net worth
between 2010 and 2013, while those in the top half saw, on average,
modest gains.

* Ownership rates of housing and businesses fell substantially between
2010 and 2013.

* Retirement plan participation in 2013 continued on the downward
trajectory observed between the 2007 and 2010 surveys for families in
the bottom half of the income distribution.

* The decrease in stock ownership rates was most pronounced for the
bottom half of the income distribution.


Comment by Don McCanne

The recovery of the economy has left behind everyone except the wealthy.
Most individuals and families are less able to afford housing,
education, retirement, vacations, college expenses, and, of especial
concern to us, health care. Many economists believe that this may
represent the new normal.

The public policies that we need to bring us all back on a solid footing
are straightforward. But politics has resulted in the erection of almost
impenetrable barriers. Just today the Senate reconfirmed the fact that
billionaires are still free to buy our elections (and the billionaires
have fared very well as the rest of us have been left behind).

If we could improve just the financing of health care so that it is
affordable for everyone, we would have taken one major step towards
implementing the public policies that we need to more equitably share
the gains in our economy. The Affordable Care Act falls far too short of
the level of equitable health care financing that we need. The
progressive financing that characterizes a single payer system would
move us more dramatically in the right direction. Not only would
everyone have health care, but we would be improving family incomes and
net worth as well.

Policy is easy. But we really have to work on the politics. The
billionaires can buy the souls of the politicians for only so long.
Start sharpening your pitchforks (Hanauer).

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