According to the Federal Reserve Board, the average American household income has increased and therefore means that America is getting richer, and yet it would seem that the younger generation isn’t.
From the statistics that the FRB analysed last week, showed that household wealth had rose by $3 trillion in the first quarter, and then picked up to the larger sum of $70.3 trillion; this is the first time since the total exceeded the $68.1 trillion that was recorded in the third quarter of that year.
However, although these numbers seem to be a step in the right direction, America’s household wealth is still 11 percent below the 2007 average, so although America is getting richer, it isn’t quite near the standard of wealth that everyone had prior to the recession.
The survey complied by William R. Emmons, chief economist of the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis, not only looked at the general wealth of all American households, but also looked at how age affected the results.
His findings showed that, on average, while all age groups haven’t recovered their 2007 standard of wealth, older households are only down 3 percent, while the middle-age group are down roughly 10 percent, which is then followed by a dramatic drop in percentage for the younger group at 40 percent.
It’s no surprise that 50 percent of American households need some form of financial assistance funded by the government when you see all these statistics laid bare.
Furthermore, despite America getting richer, the younger generation aren’t seeing these wealth increases; it would seem that the young people that incurred high debts just to acquire homes before the housing bubble collapsed are still suffering for their actions.
Mr. Emmons has commented on the situation by saying that ownership rates and mortage debts actually rose for younger people, as well as for minority and less educated households.
Therefore the groups that suffered the most are the ones that are slower to recover; although that all makes sense if you look at the bigger picture, it seems doubtful that many young people will be sat reading this and be happy with what they’re seeing, after all, nobody likes hearing that they’re still being hit the hardest in the current economic climate.
That being said, if America’s poorest are still spending their income on lottery tickets, it doesn’t seem quite so shocking that they should still be lagging behind in the financial recovery.
Nonetheless, with the proof that America is getting richer, surely it’s only a matter of time before the younger generation reach the same level of wealth?
[Image via Wikimedia Commons]