The question “are you better off than four years ago?”, first asked by Ronald Reagan in his campaign against Jimmy Carter in 1980, has a different answer for households in different parts of the country, and for workers who differ with respect to their occupation, age, education, race, gender and work experience. The average answer to this question belies substantial inequality in changes in economic fortunes over the past four years. There have been economic success stories even during the depths of the deepest recession since the Great Depression. Some small businesses and start-ups have flourished. The stock market and corporate profits have rebounded well in the past four years. Many individuals have found work, moved from part-time to full-time work, received a promotion, or a substantial increase in their rate of pay.
At the other end of the spectrum, there is unlikely to be a group of workers more adversely affected by the recession and weak recovery than construction workers in areas where the real estate bubble burst. Consider building construction workers in Las Vegas, Nevada. Four years ago there were 17,500 workers employed in building construction. Today there are only 5,100 meaning that employment has fallen by 71% over four years.
The Case-Shiller price index for residential housing in Las Vegas has fallen by 41% over the past four years. This means that many of the unemployed and underemployed construction workers are underwater in their homes. Moreover, given the glut of housing, the employment prospects for construction workers in Las Vegas is likely to remain weak for years to come.
What happened in Vegas, unfortunately, isn’t confined to Vegas. There are a number of other cities and areas, from Riverside County, California to south Florida, that are casualties of the crash in real estate markets. Many residents of these areas lost equity in their homes. Others lost their jobs and have been underemployed for years. Many small businesses, especially those dependent on real estate and construction, have failed. So whenever pundits and journalists attempt to determine whether the typical American is better off than they were four years ago, remember that there are 300 million different answers to that question. In some parts of the country the answer is clearly no, for far too many Americans.