Median family income is down since the Great Recession, but that decrease is due to the fact that so many family members are working less.
Many workers chose to leave the work force in the past few years, and those who did so generally earn less than workers. Choosing to live on the proceeds of government transfer programs requires accepting a fixed income, with no possibility of extra hours, overtime or raises that exceed the rate of inflation.
Within the work force, there have been steady gains in hours worked and hourly wages, on average. This trend might change as new regulations make part-time workers more appealing to employers and employees earn less because their schedules are cut.
An economic indicator that tracks the average income earned from work is at all-time highs. This indicator multiplies the average hourly wage by the average hours worked per week and then multiplies that by 52 to approximate the average annual salary of a typical worker.
The average worker is earning $44,000, about 15 percent more than they did when the recession started. Median household income is down more than 4 percent over that time, as the number of Americans on disability and other government income transfer programs has soared.
We are seeing two Americas forming, with those willing to work still having a path to success, although the burden of supporting the nonworking America could become too great in the future. There is still room for bullishness on the economy and the stock market until the average job pays less than the average government benefit does.
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