Tuesday, December 1, 2015

Are You Better Off than Before the Recession?

written by Damon Runberg, Central Oregon Regional Economist

Were you working before the 2007-2009? If so, are you still working today? If you said "yes" to both then I have another question for you. Are you better off today than before the recession?

Anecdotally, I hear stories from families across Oregon who say they don't feel like we are in an economic expansion due to stagnation in their wages and the rising costs of goods and services. Their paycheck today is spread thinner than it was back in 2005. However, the plural of anecdote is not data. What does the data say? Are pre-recession workers who are still employed better off than they were before the recession?

Using payroll tax records we grabbed all individuals who were employed through all four quarters of 2005. We tracked the wages of this cohort through the recession and into the recent recovery.

Over nine years, the pre-recession cohort of 2005 workers experienced an inflation-adjusted wage growth of 7.5 percent. These results were a bit surprising. The assumption was that the 2008 recession was so severe and long-lasting that wage growth would be subdued compared with previous cohorts. Instead, strong wage gains after the recession made up for the slight dip experienced in the midst of the downturn.

Read Damon's full article for a much more detailed version of this analysis: Are You Better Off than Before the Recession? 

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