Disparate Recoveries: Wealth, Race, and the Working Class after the Great Recession

2021 ◽  
Vol 695 (1) ◽  
pp. 173-192
Author(s):  
Fenaba R. Addo ◽  
William A. Darity
Keyword(s):  
Middle Class ◽  
Working Class ◽  
Great Recession ◽  
Wealth Inequality ◽  
Net Worth ◽  
The Great Recession ◽  
Consumer Finances ◽  
White Working Class ◽  
Using Data ◽  
The Relationship

What does it mean to be working class in a society of extreme racial wealth inequality? Using data from the Survey of Consumer Finances, we investigate the wealth holdings of Black, Latinx, and white working-class households during the post–Great Recession (pre–COVID-19) period that spanned 2010 to 2019. We then explore the relationship between working-class and middle-class attainment using a wealth-based metric. We find that, in terms of their net worth, fewer Black working-class households benefitted from the economic recovery than white working-class households. Among white households, the working class saw the greatest increase in wealth in both absolute and relative terms. Working-class households were less likely to be middle class as defined by their wealth holdings, and Black and Latinx households were also less likely to be middle class. For Black households, racial identity is a stronger predictor of wealth attainment than occupational sector.

Recent Trends in the Material Well-Being of the Working Class in America

2021 ◽  
Vol 695 (1) ◽  
pp. 70-91
Author(s):  
James P. Ziliak
Keyword(s):  
Working Class ◽  
Food Insecurity ◽  
Great Recession ◽  
Insurance Coverage ◽  
Well Being ◽  
Absolute Poverty ◽  
Earnings Growth ◽  
The Great Recession ◽  
Recent Trends ◽  
Using Data

I examine trends in the material well-being of working-class households using data from the Current Population Survey in the two decades surrounding the Great Recession. In the years leading up to the Great Recession, average earnings, homeownership, and insurance coverage all fell, and absolute poverty and food insecurity accelerated. After-tax incomes were, for the most part, stagnant. The economic hemorrhaging either abated or reversed, however, in the decade after the Great Recession, especially for the least skilled and for households headed by a Hispanic person. This includes robust earnings growth, which led to declines in earnings inequality, absolute poverty, and food insecurity, coupled with increased insurance coverage and a modest rebound in after-tax incomes. As many of these recent advances likely stalled with the onset of the COVID-19 pandemic, I discuss various policy options.

scholarly journals How class identities shape highbrow consumption: A cross-national analysis of 30 European countries and regions

2019 ◽  
Author(s):  
Aaron Reeves
Keyword(s):  
Middle Class ◽  
Working Class ◽  
Cultural Capital ◽  
Cultural Practices ◽  
European Countries ◽  
Class Identity ◽  
Using Data ◽  
National Analysis ◽  
The Relationship ◽  
Cross National

Highbrow culture may not always be central to cultural capital and, in such circumstances, the distinctiveness of middle-class consumption of highbrow culture may diminish, becoming more similar to working-class consumption. Using data from 30 European countries, I explore this issue through examining three questions: 1) is class identity associated with highbrow consumption; 2) does this association vary across countries; and 3) is the relationship between class identity and highbrow consumption altered when the majority of people in a given society identify as either ‘working-class’ or ‘middle-class’? After accounting for other socio-demographic controls, people who identify as middle-class are more active highbrow consumers than those who identify as working class. Yet, the distinctiveness of middle-class consumption of highbrow culture varies across countries and is negatively correlated with how many people identify as working-class in a society. As more people identify as working-class (rejecting middle-class identities) highbrow culture less clearly distinguishes middle-class and working-class identifiers. In the absence of any class-structured divisions in highbrow culture, whether and how cultural practices function as a form of cultural capital is likely quite different, reinforcing the claim that the centrality of highbrow culture to cultural capital varies geographically.

Millions Standing against Their Own Economic Interest

2017 ◽  
Author(s):  
Mugambi Jouet
Keyword(s):  
Middle Class ◽  
Working Class ◽  
American Dream ◽  
Free Market ◽  
Religious Fundamentalism ◽  
Economic Interest ◽  
White Working Class ◽  
The Rich ◽  
The Relationship ◽  
Blind Faith

Millions of white working-class and middle-class Americans vote against their own economic interest by defending policies that hurt them while profiting the rich, including the 1% wealthiest Americans. Several factors help explain this peculiar dimension of U.S. politics: myopia fostered by anti-intellectualism; the relationship between religious fundamentalism and free-market fundamentalism; blind faith in the American Dream; and how racism hinders economic solidarity.

Household Wealth Trends in the US, 1983 to 2010

2017 ◽  
Author(s):  
Edward N. Wolff
Keyword(s):  
Middle Class ◽  
Great Recession ◽  
Household Wealth ◽  
Net Worth ◽  
Sharp Fall ◽  
The Great Recession ◽  
The Us ◽  
Racial And Ethnic Disparity ◽  
Middle Class Families ◽  
High Share

This chapter investigates wealth trends from 1983 to 2010. Median wealth plummeted between 2007 and 2010 by 44%. The inequality of net worth, after almost two decades of little movement, was up sharply between 2007 and 2010. Relative indebtedness continued to expand for the middle class. The sharp fall in median net worth and the rise in its inequality from 2007 to 2010 are traceable to the high leverage of middle-class families and the high share of homes in their portfolio. The racial and ethnic disparity in wealth holdings, after remaining more or less stable from 1983 to 2007, widened considerably between 2007 and 2010. Hispanics, in particular, got hammered by the Great Recession in terms of net worth and net equity in their homes. Households under age 45 were also pummeled by the Great Recession, as their relative and absolute wealth declined sharply from 2007 to 2010.

Income Uncertainty and Household Stock Ownership During the Great Recession

2018 ◽  
Vol 29 (2) ◽  
pp. 383-395 ◽  
Author(s):  
Su Hyun Shin ◽  
Kyoung Tae Kim
Keyword(s):  
Instrumental Variables ◽  
Great Recession ◽  
Negative Relationship ◽  
Stock Ownership ◽  
Survey Of Consumer Finances ◽  
Income Uncertainty ◽  
The Great Recession ◽  
Consumer Finances ◽  
Before And After ◽  
The Relationship

Using the 2007–2009 Survey of Consumer Finances (SCF) panel dataset, this study investigated the relationship between subjective income risks and stock ownership of 2,386 households with a working head before and after the Great Recession. We used subjective income uncertainty as a proxy for subjective income risks. A two-stage least squares (2SLS) estimation with an instrumental variables (IV) approach was used to reduce potential selection bias. The results suggested that households that were more likely to face subjective income uncertainty were less likely to hold stock assets in their portfolios. We confirmed this negative relationship between subjective income risks and stock ownership using tests of robustness.

Introduction

2017 ◽  
Author(s):  
Stefan Homburg
Keyword(s):  
Great Recession ◽  
Rational Expectations ◽  
Borrowing Constraints ◽  
Distinctive Features ◽  
Net Worth ◽  
The Great Recession ◽  
External Finance ◽  
International Audience ◽  
Aims And Scope

Chapter 1 describes the book’s aims and scope. The main objective is to improve understanding of the Great Recession and its aftermath. The book provides a unified theoretical framework that uses dynamic general equilibrium models, or DGE, but dispenses with the rational expectations assumption. Its distinctive features are clean models with a rich institutional structure encompassing credit money, external finance, borrowing constraints, net worth, real estate, and commercial banks. Written for economists in universities, governments, and financial institutions, the book addresses an international audience.

scholarly journals Measuring the availability of “good jobs” in the United States for working-class men during the Great Recession and recovery

2020 ◽  
Author(s):  
Janette Dill ◽  
Robert Francis
Keyword(s):  
Working Class ◽  
Great Recession ◽  
Food Service ◽  
The United States ◽  
Job Quality ◽  
Full Time ◽  
The Great Recession ◽  
Predicted Probability ◽  
Time Work ◽  
The Impact

In this study, we use the 2004, 2008, and 2014 panels of the Survey for Income and Program Participation (SIPP) to measure the impact of the Great Recession and recovery on the availability of “good jobs” for men without a college degree. We define “good jobs” using a cluster of job quality measures, including wage thresholds of at least $15, $20, or $25 per hour, employer-based health insurance, full-time work hours, and protection from layoff. We find that the Great Recession and aftermath (2008-2015) resulted in a 1-10% reduced probability of being in a “good job” across most industries, with especially large losses in manufacturing, retail, transportation, and food service (compared to 2004-2007). In the 2014 panel, there is only a slight post-recession recovery in the predicted probability of being in a “good job,” and the probability of being in a “good job” remains well below 2004 levels. Although the probability of being on layoff from a “good jobs” does decrease substantially in the 2014 cohort as compared to the rate of layoff during the Great Recession, our clustered measure of job quality shows that access to “good jobs” remains limited for most working-class men and that the recovery from the Recession has largely not reached the working-class.

scholarly journals Vehicle Currency Pricing and Exchange Rate Pass-Through

2021 ◽  
Author(s):  
Natalie Chen ◽  
Wanyu Chung ◽  
Dennis Novy
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Great Recession ◽  
Firm Level ◽  
Bilateral Exchange ◽  
The Great Recession ◽  
Pass Through ◽  
Exchange Rate Changes ◽  
Exchange Rate Pass Through ◽  
The Relationship

Abstract Using detailed firm-level transactions data for UK imports, we find that invoicing in a vehicle currency is pervasive, with more than half of the transactions in our sample invoiced in neither sterling nor the exporter’s currency. We then study the relationship between invoicing currencies and the response of import unit values to exchange rate changes. We find that for transactions invoiced in a vehicle currency, import unit values are much more sensitive to changes in the vehicle currency than in the bilateral exchange rate. Pass-through therefore substantially increases once we account for vehicle currencies. This result helps to explain why UK inflation turned out higher than expected when sterling depreciated during the Great Recession and after the Brexit referendum. Finally, within a conceptual framework we show why bilateral exchange rates are not suitable for capturing exchange rate pass-through under vehicle currency pricing. Overall, our results help to clarify why the literature often finds a disconnect between exchange rates and prices when vehicle currencies are not accounted for.

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