The Survey of Consumer Finances which the Federal Reserve releases triennially contains data that give information on the wealth and income of the people in the U.S. coming from all walks of life. It reveals that the nation experiences deepening inequality in wealth and income in the years after the recession. It also shows that significant pay gains are enjoyed only by the richest families.
From 2010 to 2013, the wealthiest households that occupy 10 percent of the nation's population experienced a post-inflation adjustment in their median income at 2 percent to $223,200. The lower income group which occupies 60 percent had the biggest drop in their finances.
There has been an increasing stratification among household financial status and incomes during the nation's recovery. This can be attributed in part to an increase in the stock and in the housing sectors. On the other hand, the labor department showed a slower rate of progress with several workers having stagnant wages. The survey suggests that most of the gap is influenced by the evolving nature of work in the U.S.
"It's fair to say the economic recovery has helped people who have very high-paid positions more than it has helped people who have low-paying jobs," says Gary Burtless, senior fellow and economist at the Brookings Institute. "But people at the very top of the income distribution took bigger hits to their income than people near the bottom."
Fed Chair Janet Yellen described income inequality as a disturbing trend. Not only does the weak jobs market form part of the blame but also the growing trends such as globalization and technology.
Households whose income fall at the bottom half of those that are surveyed were seen to show a decrease in signing up for retirement plans. Such trend seemed to have been observed from 2007 to 2010. In the case of the middle-income households, the participation had somehow increased. Overall, the rate of participation in retirement plants had declined compared to the condition in 2007.
"What we have seen in recent years is the polarization of the labor market as job growth is skewed toward the highest and lowest skill levels, hollowing out the middle," said Dean Maki, chief U.S. economist at Barclays PLC in New York.
There are jobs requiring some skills that have either disappeared or have been replaced by technology. This has led workers to compete for low-skill jobs which contributed to more depressing wages. Average earnings per hour in both production and non-supervisory areas had a mere 6 percent increase prior to inflation within the three-year period covered by the survey.
