Photo: Spencer Platt/Getty
This post originally appeared at 24/7 Wall St. The recession did no favours for Americans who were the worst off financially at its start. They are unlikely to recover to where they were before the economic catastrophe. New research from the Federal Reserve Bank of Minneapolis shows that:
In 2010, the bottom 20 per cent of the U.S. household earnings (which include labour, business and farm income) distribution was doing much worse, relative to the median, than in the entire postwar period. This is because this group’s earnings fell by about 30 per cent relative to the median over the course of the recession. This lowest quintile also did poorly in terms of wealth, which declined about 40 per cent.
Most of the recent discussion about wealth, or lack of wealth, in the U.S. has focused on the top 1% and whether they should share a larger burden of the tax base. Even if the amount that they pay moves much higher, it is hard to imagine how that sum would be large enough, or could be administered by the federal government well enough, to help pull the bottom 20% from the pit into which they sank over the past four years.
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