Introduction to work and the economy

While these and several other factors indicate the United States is on the road to recovery, many people are still struggling. For most segments of the population, median income has not increased, and in fact it has receded in many cases. The size, income, and wealth of the middle class have been declining since the 1970s— effects that were perhaps hastened by the recession. Today, wealth is distributed inequitably at the top. Corporate profits have increased more than 141 percent, and CEO pay has risen by more than 298 percent.

G. William Domhoff (University of California at Santa Cruz) reports that “In 2010, the top 1% of households (the upper class) owned 35.4% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 53.5%, which means that just 20% of the people owned a remarkable 89%, leaving only 11% of the wealth for the bottom 80% (wage and salary workers).”

Economic Impact of the Recession on Different Segments of Population: Most U.S. citizens have struggled financially as a result of the nearly decade-long recession. As noted above, many workers lost their jobs as unemployment rates soared, housing prices—which represent the wealth of the average person—declined sharply, and the cost of living increased significantly. Meanwhile income for the average U.S. worker remains stagnant.

One indicator of general economic conditions is the rate at which individuals are accessing the country’s safety net or social welfare programs. Between 2000 and 2013, the number of people relying on the Supplemental Nutrition Assistance Program (SNAP, formerly known as the “food stamp” program), climbed from 17,194,000 to more than 47,636,000. The sharpest increase paralleled the subprime mortgage crisis of 2009, with the rolls rising from 28,000,000 to more than 40,000,000 individuals receiving food assistance in a span of two years (United States Department of Agriculture 2014).

The economic downturn had a rippling effect throughout the economy. For instance, it delivered a significant blow to the once-vibrant U.S. automotive industry. While consumers found loans harder to get due to the subprime mortgage lending crisis and increasing fuel costs, they also grew weary of large, gas-guzzling sport utility vehicles (SUVs) that were once the bread-and-butter product of U.S. automakers. As customers became more aware of the environmental impact of such cars and the cost of fuel, the large SUV ceased to be the status symbol it had been during the 1990s and 2000s. It became instead a symbol of excess and waste. All these factors created the perfect storm that nearly decimated the U.S. auto industry. To prevent mass job loss, the government provided emergency loans funded by taxpayer dollars, as well as other forms of financial support, to corporations like General Motors and Chrysler. While the companies survived, the landscape of the U.S. auto industry was changed as result of the economic decline.

To realign their businesses in the face of decreased sales and lower manufacturing outputs, many large automotive companies severed their ties with hundreds of dealerships, which affected the dealers’ local economies around the country.

References

National Equal Pay Task Force. 2013. "Fifty Years After the Equal Pay Act: Assessing the Past, Taking Stock of the Future." Retrieved December 15, 2014. ( (External Link) ).

State of Michigan, The. n.d. "Detrioit's Financial Crisis: What You Need to Know." Retrieved December 15, 2014. ( (External Link) ).

U.S. Department of Agriculture. 2014. "Supplemental Nutrition Assistance Program Participation and Costs." Retrieved December 15, 2014. ( (External Link) ).