Of all the scary stats you've heard about the U.S. economy over the last few years, this might be the scariest: Almost two-thirds of American households earn less money today than they did in 2002.
That figure comes from a detailed new report by economist Rob Shapiro for the Brookings Institution - a report that underscores the dramatic downshifting that has occurred for low- and middle-class workers since the turn of the century, and which threatens to undermine our national hope that in America every generation will do better than the one that came before.
Shapiro's analysis shows young people who entered the workforce in 1991 and 2001 aren't seeing the same pattern of lifetime wage gains that workers who joined the job market in the 1970s and 80s experienced. He also shows that those older workers are now losing income at a much faster pace than they gained it.
At the end of the 20th Century, Shapiro said, workers at all levels were seeing wages rise. "It was a classic illustration of broad and democratic upward mobility," he said. "That process simply stopped with the 2001 recession and the 2001-2007 expansion."
That stoppage has rained pain on older and younger workers alike, as you can see in this chart.
When we talk about middle-class wage stagnation, we're usually talking about the country's median household income, which is to say, the amount earned by the household exactly in the middle of the American income distribution. Shapiro looked at the question differently. He analyzed Census data that group workers into age cohorts, and then tracked those workers over time.
Not surprisingly, he found that median incomes in those cohorts tend to change as workers age. First incomes go up, then eventually they level off, and finally they fall. That general pattern hasn't changed over time. But for younger workers today, incomes haven't risen as far as their predecessors' did, and the leveling-off process appears to have started much earlier.
Two-thirds of American households are headed by someone who did not earn a college degree. From 2002 to 2013, those households, even as they aged, saw their median incomes fall by 9.4 percent (for those headed by high school graduates) and 17.3 percent (for those headed by high-school dropouts).
Notice, in this chart, the difference in the experience of workers who were in their 20s in the 70s and 80s, versus those in the 90s and 2000s.
The older workers built incomes for much longer, and their peak incomes were higher. The workers who came of age in the 1990s tech bubble and the 2000s housing bubble saw incomes rise faster, but level off much earlier. The 1975 cohort saw its median household incomes rise by 60 percent before it peaked. For the 1982 cohort, it was 70 percent. For the '91 cohort, it was 50 percent; for the 2001 group, it was just over 20 percent.
It's no guarantee that those younger workers' incomes have leveled off for good -- for the 2001 group, median income was on the rise again in 2013 -- but if they have, we are talking about a huge loss of earnings over a lifetime, compared to the workers who went before them.
Life's not great right now for those older workers, either. Look at how fast their incomes have fallen:
The 1975 cohort saw its median income plunge by nearly $30,000 from 2000 to 2013. The oldest of those workers only begin to turn 65 this year.
There's bad news in the report for everyone, basically. Women and minorities have lost all the progress they made in closing the median income gap with men. College graduates are doing better than everyone else, but their income growth has stalled - or gone backwards - for all but the youngest workers.
Shapiro is a former economic advisor to President Bill Clinton and Vice President Al Gore, and he blames those trends on two structural shifts in the economy that were accelerating at the end of the Clinton era and into the 2000s. One is the rise in globalization, which he said has pushed U.S. companies to cut jobs and wages in order to compete on price for foreign competitors. The other is the advancement of labor-saving technology that has hurt the market value of lower-skill workers.
Shapiro also said the numbers in his analysis add up to a simple and cautionary explanation for the growing unrest among working class voters. In a Pew Research Center poll this week, a little more than - you guessed it - two-thirds of voters said government policies since the recession have done little to help the middle class.
"If we have another 10 years in which the incomes of two-thirds of Americans decline, you won't recognize the politics in this country," he said. "This is the source of the Tea Party, of substantial anger at the government. Give it another 10 years and see what happens."
It's probably better if we don't.