By Tami Luhby, @CNNMoney
(CNNMoney) - The net worth of American households grew by $5 trillion in the first two years of the economic recovery, but not everyone shared in the riches.
The top 7% of American families saw their wealth grow to $25.4 trillion in 2011, up from $19.8 trillion two years earlier. The remaining 93% of Americans experienced a decline in net worth to $14.8 trillion, down from $15.4 trillion, according to a new analysis by the Pew Research Center.FULL STORY
By Tami Luhby @CNNMoney
(CNNMoney) - When Debbie Bruister buys a gallon of milk at her local Kroger supermarket, she pays $3.69, up 70 cents from what she paid last year.
Getting to the store costs more, too. Gas in Corinth, Miss., her hometown, costs $3.51 a gallon now, compared to less than three bucks in 2012. That really hurts, considering her husband's 112-mile daily round-trip commute to his job as a pharmacist.
Bruister, a mother of four, received a $1,160 raise this school year at her job as an eighth-grade computer teacher. The extra cash - about $97 a month, before taxes and other deductions - isn't enough for her and her husband to keep up with their rising costs, especially after the elimination of the payroll tax break. Its loss shrunk their paychecks by more than $270 a month.
"If you look at how much prices are going up, you get in the hole really quick," Bruister said. "It's a constant squeeze."
In the wake of the Great Recession, millions of middle-class people are being pinched by stagnating incomes and the increased cost of living. America's median household income has dropped by more than $4,000 since 2000, after adjusting for inflation, and the typical trappings of middle-class life are slipping out of financial reach for many families.
Families with young kids are struggling to afford childcare and save for the ever-climbing costs of college. Those nearing retirement are scrambling to sock away funds so they don't have to work forever. A weak labor market means that employed Americans aren't getting the pay raises they need to keep up - especially with big-ticket items such as health care eating away at their paychecks.
Economists say it boils down to two core problems: jobs and wages. The traditional "middle-class job" is disappearing.
(CNNMoney) - The wealth gap between blacks and whites has nearly tripled over the past 25 years, due largely to inequality in home ownership, income, education and inheritances, according to a new study by Brandeis University.
That type of inequality can be a drag on economic growth for everyone, said Thomas Shapiro, director of the university's Institute on Assets and Social Policy, which conducted the research.
The difference in wealth between typical households in each racial group ballooned to $236,500 in 2009, up from $85,000 in 1984, according to the study, released Wednesday. By 2009, the median net worth of white families was $265,000, while blacks had only $28,500.
Brandeis researchers looked at the same set of 1,700 families over the 25-year period to see how their actual work and school experiences affected their wealth accumulation.
What they found is that home ownership is driving the growing gap. Price appreciation is more limited in non-white neighborhoods, making it harder for blacks to build equity. Also, because whites are more likely to have family financial assistance for down payments, they are able to buy homes an average of eight years earlier than black families and to put down larger upfront payments that lower interest rates and mortgage costs.
The home ownership rate for whites is 28% higher than that of blacks.FULL STORY
by Tami Luhby, CNNMoney
(CNNMoney) - Though blacks' job prospects have improved from the depths of the Great Recession, they still suffer from disproportionately high unemployment.
Pegged to Black History Month, the U.S. Congress' Joint Economic Committee put out a stats sheet highlighting the gap. It takes longer, on average, for black workers for find a job, and even having a college degree doesn't help as much as it does for other job-seeking populations. The black unemployment rate is currently 13.8% unemployment rate, far higher than the 7.9% national rate.
"Congress can help ensure that the economic situation of black workers and their families continues to improve by supporting programs that provide assistance to those who are struggling to make ends meet and examining new approaches to alleviating unemployment and poverty," the bipartisan JEC wrote in its release.FULL STORY
By Tami Luhby @CNNMoney
NEW YORK (CNNMoney) - It doesn't take a million bucks to get into the top 1%.
In fact, it took a little less than $370,000 in adjusted gross income in 2010 to make it into this elite group, according to newly released data from the Internal Revenue Service. That's up slightly from the $352,000 the year before.
But on average, the top 1% earned $1.12 million, up from $980,000 the year before.
The top 1% have been in the spotlight since Occupy Wall Street protesters first began camping out in cities across the U.S. last fall. The presidential campaign also centered on the haves and have nots, with President Obama calling for tax increases on the rich and challenger Mitt Romney arguing that taxing the wealthy would hurt the economy.FULL STORY
By Tami Luhby @CNNMoney
NEW YORK (CNNMoney) - One wants to strengthen the nation's existing safety net. The other wants to overhaul it.
President Obama and challenger Mitt Romney have vastly different views on how to help the 46.2 million Americans in poverty and the more than 30 million people who are near poor. The president leans toward expanding the programs that exist, while the Republicans say they will set up a system that fosters economic opportunity instead of government dependency.
The ranks of the poor and the government programs that assist them swelled during the Obama administration, largely because of the Great Recession. The number of people in poverty jumped 16% between 2008 and 2011, while the Medicaid rolls jumped 23.5% over that time. Food stamp enrollment soared 46% during his term.
Just who is elected president matters a great deal for the poor. In the weeks following Election Day, the president and lawmakers will have to deal with large, across-the-board cuts in domestic spending scheduled to take effect in January. While certain programs for the poor, such as food stamps and Medicaid, would be protected, other initiatives, including Head Start and housing assistance, could be slashed.Read the full post on CNN Money's Economy blog
By Tami Luhby @CNNMoney
NEW YORK (CNNMoney) - Middle-class families continued to see their incomes decline in the aftermath of the Great Recession, according to U.S. Census Bureau data released Wednesday.
Median household income fell to $50,054 in 2011, down 1.5% from a year earlier. Income inequality widened, as the highest income echelon experienced a jump in incomes, while those in the middle of the income range saw incomes shrink.
Meanwhile, the national poverty rate hit 15.0% in 2011, down slightly from 15.1% the year before. Some 46.2 million people fell below the poverty line last year. The poverty threshold for a family of four was $23,021.
Most experts were expecting an increase in poverty, but Census officials said an increase in the number of people working full-time helped keep the rate in check.
By Tami Luhby, @CNNMoney
NEW YORK (CNNMoney) - The wealth gap between the richest Americans and the typical family more than doubled over the past 50 years.
In 1962, the top 1% had 125 times the net worth of the median household. That shot up to 288 times by 2010, according to a new report by the left-leaning Economic Policy Institute.
That trend is happening for two reasons: Not only are the rich getting richer, but the middle class is also getting poorer.
Most Americans below the upper echelon have suffered a decline in wealth in recent decades. The median household saw its net worth drop to $57,000 in 2010, down from $73,000 in 1983. It would have been $119,000 had wealth grown equally across households.
The top 1%, on the other hand, saw their average wealth grow to $16.4 million, up from $9.6 million in 1983. This is due in large part to the growing income inequality divide, as well as the sharp rise in value of stocks over the period.
Net worth counts all assets including real estate holdings, minus debts.
By Tami Luhby, CNNMoney
New York (CNNMoney) –– More jobless Americans are finding work these days, but they are mainly lucky fellas.
The "mancession" has morphed into the "hecovery," leaving women workers largely in the dust. The share of adult women who are employed is lower than it was two years ago, while men have seen an upturn.
"Even though we are seeing some recovery, we have not seen it in a recovery of jobs for women," said Heather Boushey, senior economist at the left-leaning Center for American Progress.
Mitt Romney, the leading Republican presidential candidate, started trying to capitalize on this statistic last week, telling crowds and TV viewers that women held more than 92% of the jobs lost under President Obama.
Women were generally spared the worst of the recession, accounting for only one-quarter of the jobs lost. Men, on the other hand, were hit hard by the devastation in the construction and manufacturing industries.
But the slow pace of recovery in women's employment has surprised and concerned some experts, who say it's unclear whether there will be a rebound anytime soon.