Jul 31, 2014
Despite increasing productivity gains, middle class and working class Americans are not seeing any rewards from their work and efforts. In fact, they are losing ground as their economic well-being continues to decline.
A new study by the Russell Sage Foundation found that the net worth of a typical household has dropped 36 percent over the past 10 years. In 2003, a middle income family had a net worth of $87,992. In 2013, it was $56,335.
Wealthy households, meanwhile, continue to get richer, according to the study.
The researchers pin much of the blame for the decline on the Great Recession, brought on by the housing bubble bursting in 2008, Wall Street manipulation and the collapse of the stock market.
"These developments were exacerbated by a doubling in the unemployment rate from 5 to 10 percent between December 2007 and October 2009, and a large reduction in earnings due to increased unemployment, wage and hour cuts and furloughs," the study found.
Workers' wages have been stagnant for decades even as their productivity has increased, mainly due to the decline in collective bargaining coverage for U.S. workers. Just 6 percent of private sector workers have collective bargaining rights.