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Lasting Effects of the Recession on Consumer's Buying Power

by Catherine McAuliffe

This morning’s Seattle Times featured an article about the nation’s consumer buying power and how it’s been affected by the recession. It comes as no surprise that the recession reduced the buying power of consumers. What might come as a surprise is that, even though the recession ended four years ago, our buying power has not recovered and it actually weaker than it was when the recession ended.

“It is not uncommon in a bad recession to see significant drops in median household income,” said Gregory Acs, director of the Income & Benefits Policy Center at the Urban Institute. “But what is a bit surprising here is how long it is taking to recover.”

According to the article, “Overall, median income has declined by 7.2 percent since January 2000.” From there the article breaks down what exactly that decline looks like for different demographics. The effects of the recession have been felt everywhere, and certainly by low-income families who were already teetering on the edge of financial stability.

The demographic breakdown paints an interesting picture of how different groups of people have fared. Furthermore, the director of the Income & Benefits Policy Center at the Urban Institute is quoted as saying, “Median income is affected by trends in inequality.” Those trends in inequality are very apparent when looking at the statistics presented. The link to the article can be found below. It is a fascinating and fast read. If you read it, be sure to let us know what you found most interesting or surprising!

http://seattletimes.com/html/businesstechnology/2021661028_incomerecessionxml.html

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