29:["$","$L2a",null,{"category":"$2b","relatedArticles":[{"id":"cG9zdDoxMTExNQ==","databaseId":11115,"postId":11115,"author":{"node":{"id":"dXNlcjoyMw==","databaseId":23,"userId":23,"avatar":{"url":"https://secure.gravatar.com/avatar/6f9cc1259b816708571d85332eed73a7?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Gregory Erich Phillips has more than a dozen years of experience in the mortgage industry. He is an active mortgage loan officer and an expert resource on topics including economics, home financing and real estate trends.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Gregory Erich","fullName":"Gregory Erich Phillips","lastName":"Phillips","name":"Gregory Erich Phillips","postCount":{"pageInfo":{"offsetPagination":{"total":24,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"gphillips","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybToz","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":3,"categoryId":3,"link":"https://smartasset.com/insights/articles","name":"Insights","postCount":{"pageInfo":{"offsetPagination":{"total":53,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"insights","ancestors":null,"parent":null,"__typename":"Category"},{"id":"dGVybTo1","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":5,"categoryId":5,"link":"https://smartasset.com/personal-finance/articles","name":"Personal Finance","postCount":{"pageInfo":{"offsetPagination":{"total":165,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"personal-finance","ancestors":null,"parent":null,"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$2c","date":"2013-10-31T12:30:00","excerpt":"

Five years after the Great Recession and resulting financial crisis, the economy still has not recovered to the degree that economists and policy makers had hoped. Unemployment is on the decline, the threat of deflation has abated, and the stock market is at all-time highs. Yet Americans are not spending. Consumer spending is the final […]

\n","featuredImage":{"id":"cG9zdDoxMTI1Mg==","databaseId":11252,"altText":"Consumers Hoarding Cash – Temporary Trend or New Normal?","date":"2013-10-24T12:51:02","fileSize":65662,"mimeType":"image/jpeg","modified":"2013-10-24T12:51:02","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2013/10/3874848430_e83bfc4c02_o.jpg","__typename":"MediaItem"},"modified":{"datetime":"2023-8-30","readable":"August 30, 2023"},"multipleBylinesByRole":{"editedBy":null,"reviewedBy":null,"writtenBy":null,"factCheckedBy":null,"secondEditor":null,"hideAuthor":null,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/insights/consumers-hoarding-cash-temporary-trend-or-new-normal","metaDesc":"Frugal living is slowing the economic recovery. But careful consumers can be a good thing long term. SmartAsset explains how hoarding cash isn't always bad.","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":3,"title":"Consumers Hoarding Cash – Temporary Trend or New Normal? | SmartAsset","__typename":"PostTypeSEO"},"slug":"consumers-hoarding-cash-temporary-trend-or-new-normal","status":"publish","title":"Consumers Hoarding Cash – Temporary Trend or New Normal?","uri":"/insights/consumers-hoarding-cash-temporary-trend-or-new-normal","tags":{"nodes":[],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":{"id":"dXNlcjoyMw==","databaseId":23,"userId":23,"avatar":"$2d","description":"Gregory Erich Phillips has more than a dozen years of experience in the mortgage industry. He is an active mortgage loan officer and an expert resource on topics including economics, home financing and real estate trends.","additionalMeta":"$2e","email":null,"firstName":"Gregory Erich","fullName":"Gregory Erich Phillips","lastName":"Phillips","name":"Gregory Erich Phillips","postCount":"$2f","slug":"gregory-erich-phillips","__typename":"User"},"editedBy":null,"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybToz","children":"$32","databaseId":3,"categoryId":3,"link":"https://smartasset.com/insights/articles","name":"Insights","postCount":53,"slug":"insights","ancestors":null,"parent":null,"__typename":"Category"},"isModifiedBeforePublished":false,"contentBlocks":["

","

Find out now: How much do I need to save for retirement?

","

But the economists and policy makers who hope for consumer spending to return to pre-crisis levels will almost certainly be disappointed. The flaw in this hope is to discount the deep scars that were left by the carnage of the recession.

","

Shifting Financial Habits

","

High levels of consumer consumption fueled the economy for years. But the dark side to that equation was that many people used debt to keep up with the ever increasing expectations of the consumer economy. Even what some people considered “savings” took forms such as home equity or paper value of stock which were themselves fueled by borrowing, rather than true wealth accumulation.

","

Having learned the hard lessons of the recession, many Americans who now have good jobs and the ability to save, have become more frugal, unwilling to borrow to support their lifestyle.

","

The younger generation of Americans, who began their professional careers around the time of the financial crisis, have shown little interest in following the borrowing and investing patterns of their parents.

","

The response to the stock market rally that started in March 2009 and continues four and a half years later is telling. Small investors have mostly stayed away from stocks. Mutual Fund investment in America has shrunk by $521 billion in the five years since the crisis, according to data from Lipper. If you talk to people now, they do not express the feeling that they have missed out on a huge opportunity, (even though a dollar invested at the 2009 market low would be worth $2.60 today). The feeling is that the stock market is too dangerous and people who got burned once don’t want to let it happen again.

","

Defining a Generation

","

Most economists see this trend as temporary, and the data from past booms and busts supports that analysis. But another thing we witness from past economic cycles is that generational habits can be formed from serious economic disasters. The collapse of Lehman Brothers in 2008 has the potential to be just such an event.

","

Just as the generation who lived through the Great Depression remained frugal for the rest of their lives, the generation that came of age during the latest financial crisis are forming habits, some of which will last a lifetime. The long term effects may not be fully realized for decades.

","

Impact on the Economy

","

Most economists consider increased savings and curbed consumer spending as a negative. When millions of families change their habits in this way it is indeed a drag on the economy. But for the individual household, it is far healthier behavior than reckless borrowing or complete depletion of savings. It may mean that the economic recovery will go slower than hoped. But healthy savings patterns could set the country up for more stable long term growth, just as it did in the generation that followed the Great Depression.

","

Photo Credit: yogeshvjaiswal

"],"experts":null,"link":"/insights/consumers-hoarding-cash-temporary-trend-or-new-normal","published":{"datetime":"2013-10-31","readable":"October 31, 2013"},"shareInfo":{"title":"Consumers Hoarding Cash – Temporary Trend or New Normal?","origin":"/insights/consumers-hoarding-cash-temporary-trend-or-new-normal"},"isNewsArticle":false},{"id":"cG9zdDo1NDU0MQ==","databaseId":54541,"postId":54541,"author":{"node":{"id":"dXNlcjo1MA==","databaseId":50,"userId":50,"avatar":{"url":"https://secure.gravatar.com/avatar/10ca58872f36412ceff58616bb971c22?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Amelia Josephson is a writer passionate about covering financial literacy topics. Her areas of expertise include retirement and home buying. Amelia's work has appeared across the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Amelia","fullName":"Amelia Josephson","lastName":"Josephson","name":"Amelia Josephson","postCount":{"pageInfo":{"offsetPagination":{"total":334,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"ajosephson","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybToz","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":3,"categoryId":3,"link":"https://smartasset.com/insights/articles","name":"Insights","postCount":{"pageInfo":{"offsetPagination":{"total":53,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"insights","ancestors":null,"parent":null,"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$34","date":"2016-10-07T10:00:07","excerpt":"

\n","featuredImage":{"id":"cG9zdDoxNzA0Mjk=","databaseId":170429,"altText":"The Pros and Cons of Recycling","date":"2022-11-08T14:24:01","fileSize":95380,"mimeType":"image/jpeg","modified":"2022-11-08T14:24:01","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2016/10/pros_and_cons_of_recycling_1.jpg","__typename":"MediaItem"},"modified":{"datetime":"2023-4-1","readable":"April 1, 2023"},"multipleBylinesByRole":{"editedBy":null,"reviewedBy":null,"writtenBy":null,"factCheckedBy":null,"secondEditor":null,"hideAuthor":null,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/insights/the-pros-and-cons-of-recycling","metaDesc":"The pros and cons of recycling don't always come up in conversations about greening America. Many people assume that recycling has no downside, but there...","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":5,"title":"The Pros and Cons of Recycling - SmartAsset","__typename":"PostTypeSEO"},"slug":"the-pros-and-cons-of-recycling","status":"publish","title":"The Pros and Cons of Recycling","uri":"/insights/the-pros-and-cons-of-recycling","tags":{"nodes":[],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":{"id":"dXNlcjo1MA==","databaseId":50,"userId":50,"avatar":"$35","description":"Amelia Josephson is a writer passionate about covering financial literacy topics. Her areas of expertise include retirement and home buying. Amelia's work has appeared across the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.","additionalMeta":"$36","email":null,"firstName":"Amelia","fullName":"Amelia Josephson","lastName":"Josephson","name":"Amelia Josephson","postCount":"$37","slug":"amelia-josephson","__typename":"User"},"editedBy":null,"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybToz","children":"$3a","databaseId":3,"categoryId":3,"link":"https://smartasset.com/insights/articles","name":"Insights","postCount":53,"slug":"insights","ancestors":null,"parent":null,"__typename":"Category"},"isModifiedBeforePublished":false,"contentBlocks":["

Do you recycle in your home or office? How about when you’re out on the street or in a park? The recycling rate in the U.S. is around 34% and has been for years. The country has struggled to reach recycling rates seen in other developed countries. For a detailed look at the issue, let’s examine some of the pros and cons of recycling.

","

For retirement help, check out our 401(k) calculator.

","

Pro 1: There’s an Environmental Benefit

","

Okay, this one is obvious. When you recycle materials you divert them from the landfills or incinerators where trash usually goes. Whether burned in incinerators or left to rot in landfills, materials in our trash can leach chemicals into the air, ground or water. Recycling reduces the waste that goes to polluting landfills and incinerators and reduces the need to devote land and resources to traditional waste disposal methods.

","

Pro 2: Recycling Creates Jobs

","

Recycling is a source of jobs in a community. Recycling plants, the manufacture of recycled products and the creation of recycling-related materials like recycling bins all contribute to job growth in the economy. Recycling can be a source of good, middle-class jobs for people without a lot of education under their belt. Along with renewable energy, recycling is a source of green jobs, which some say are critical to a strong 21st-century economy.

","

Pro 3: Recycling Raises Overall Environmental Consciousness

","

Recycling can be a gateway to other forms of environmental activism. A homeowner might start out by recycling and graduate to composting or installing solar panels. Recycling, particularly in cities that offer curbside pick-up of recyclables, is an easy way to do something good for the environment and it can lead to other green lifestyle changes, too.

","

Related Article: States Leading the Charge on Renewable Energy

","

Pro 4: Recycling Reduces the Energy Used to Manufacture Goods

","

","

Say a company wants to make a garment. To generate the textile from scratch would mean harvesting the cotton or linen crop, or manufacturing the synthetic fabric. But if the same company uses recycled textiles it can cut out that first step of the manufacturing process, saving energy as a result. To the extent that recycling reduces the need for growing, mining or extracting raw materials it has significant environmental benefits.

","

Con 1: Recycling Takes Energy

","

Have you heard of the phrase, “Reduce, Reuse, Recycle?” Well, some environmentalists argue that “reduce” and “reuse” have more environmental benefits than “recycle.” That’s because if you consume fewer items you’re doing more for the environment than if you consume more and then recycle what you can. That’s because recycling takes energy, as does manufacturing products from recycled materials.

","

Con 2: Recycling Can Lead to Pollution

","

Some say the environmental benefits of recycling are overrated, not just because it takes energy but because it can lead to pollution. This is said of electronics recycling in particular. Many electronics slated for recycling are shipped overseas to less-developed countries, where they are sorted by hand. During the sorting process, metals and other chemicals may leach into the land and water where the recycling is taking place. This takes a toll on the environment and its inhabitants.

","

Check out our retirement calculator.

","

Con 3: Recycling Is Costly

","

Some critics of recycling say the costs outweigh the benefits and/or exceed community resources. Some towns and cities say they can’t afford to operate recycling programs. In the U.S., landfill space is generally cheaply available, which means that the cost of recycling can exceed the cost of landfill waste disposal in many places.

","

Of course, some materials cost more to recycle than others, which is why some city governments choose not to recycle glass or plastic. The costs of recycling can vary not just based on the materials recycled but on the administration of the recycling program and on-demand for recycled materials.

","

Con 4: Recycling Isn’t a Slam Dunk

","

","

Some critics of recycling say that recycling gives people the sense that they’re doing all they need to do on behalf of the environment, when in fact recycling alone isn’t enough to, say, fight climate change or eliminate pollution. These critics worry that there will be too many people who shop a lot, eat a lot of animal products and take long-haul flights but think that recycling offsets the environmental impact of their other choices.

","

Bottom Line

","

Most people agree that recycling has significant benefits, even if it isn’t a perfect solution to our environmental problems. Though it can be a bit of an inconvenience, recycling has empowered households and businesses to feel like they’re doing something to make their community – and their country – a more eco-friendly place.

","

Tips for Being Socially Responsible

","$3c","

Photo credit: ©iStock.com/jat306, ©iStock.com/ms_seal, ©iStock.com/hroe

"],"experts":null,"link":"/insights/the-pros-and-cons-of-recycling","published":{"datetime":"2016-10-7","readable":"October 7, 2016"},"shareInfo":{"title":"The Pros and Cons of Recycling","origin":"/insights/the-pros-and-cons-of-recycling"},"isNewsArticle":false},{"id":"cG9zdDoxOTU3NDc=","databaseId":195747,"postId":195747,"author":{"node":{"id":"dXNlcjoxNjA=","databaseId":160,"userId":160,"avatar":{"url":"https://secure.gravatar.com/avatar/c22800be7ee2f518e9594c29b627fc0c?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":null,"additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Hilary","fullName":"Hilary Collins","lastName":"Collins","name":"Hilary Collins","postCount":{"pageInfo":{"offsetPagination":{"total":42,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"hilarycollins","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybToz","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":3,"categoryId":3,"link":"https://smartasset.com/insights/articles","name":"Insights","postCount":{"pageInfo":{"offsetPagination":{"total":53,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"insights","ancestors":null,"parent":null,"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$3d","date":"2023-05-03T10:21:10","excerpt":"

\n","featuredImage":{"id":"cG9zdDoxOTU3NDg=","databaseId":195748,"altText":"401k contribution deadline","date":"2023-05-03T22:00:58","fileSize":31835,"mimeType":"image/jpeg","modified":"2023-05-03T22:00:58","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2023/05/401k-1.jpg","__typename":"MediaItem"},"modified":{"datetime":"2023-5-3","readable":"May 3, 2023"},"multipleBylinesByRole":{"editedBy":null,"reviewedBy":null,"writtenBy":null,"factCheckedBy":null,"secondEditor":null,"hideAuthor":null,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/insights/401k-contribution-deadline","metaDesc":"The calendar year stipulates the deadline you have to contribute to your 401(k) each year. Here is what you need to know.","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":3,"title":"401(k) Contribution Deadlines","__typename":"PostTypeSEO"},"slug":"401k-contribution-deadline","status":"publish","title":"401(k) Contribution Deadlines","uri":"/insights/401k-contribution-deadline","tags":{"nodes":[],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":{"id":"dXNlcjoxNjA=","databaseId":160,"userId":160,"avatar":"$3e","description":null,"additionalMeta":"$3f","email":null,"firstName":"Hilary","fullName":"Hilary Collins","lastName":"Collins","name":"Hilary Collins","postCount":"$40","slug":"hilary-collins","__typename":"User"},"editedBy":null,"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybToz","children":"$43","databaseId":3,"categoryId":3,"link":"https://smartasset.com/insights/articles","name":"Insights","postCount":53,"slug":"insights","ancestors":null,"parent":null,"__typename":"Category"},"isModifiedBeforePublished":false,"contentBlocks":["

Contributing to your a 401(k) is one of the most common and simplest ways to save for retirement. If your workplace offers you a 401(k), you can have money taken out each month, so you don’t even have to think about saving for retirement. There are some rules and regulations you’ll need to be aware of, though, including deadlines for getting all your contributions in each year. Here’s what you need to know.

","

If you need help planning for retirement, consider working with a financial advisor.

","

What Is the 401(k) Contribution Deadline?

","

The 401(k) contribution deadline is simple enough—it’s Dec. 31 of each year. Many tax timelines, including the IRS rules that govern 401(k), run on the calendar year, so your 401(k) contributions run from Jan. 1 to Dec. 31.

","

This is important because 401(k) plans have an annual contribution limit and if you intend to max out your 401(k) contributions each year, you have to do it before the deadline. The limit on employee elective deferrals for traditional and safe harbor 401(k) plans is $22,500 in 2023, up from $20,500 in 2022. If you’re 50 or older, you can add $7,500 to that—up from $6,500 in 2022—for your catch-up contribution.

","

What If I Miss the Deadline?

","

If you meant to max out your 401(k) and didn’t do it before the end of the calendar year, there’s unfortunately not much that can be done. But that doesn’t mean you should give up and spend that money on a European vacation—here are two concrete steps you can take to correct your mistake.

","$45","

Bottom Line

","

The deadline for contributing to your 401(k) is Dec. 31. If you want to max out your 401(k) contributions for the year, make sure you do so before then. If you do miss the date, consider putting that money in an IRA instead.

","

Tips for Boosting Your Retirement Savings

","

","$46","

Photo credit: ©iStock.com/DNY59, ©iStock.com/jygallery, ©iStock.com/Abu Hanifah

","

"],"experts":null,"link":"/insights/401k-contribution-deadline","published":{"datetime":"2023-5-3","readable":"May 3, 2023"},"shareInfo":{"title":"401(k) Contribution Deadlines","origin":"/insights/401k-contribution-deadline"},"isNewsArticle":false},{"id":"cG9zdDoyODUyOQ==","databaseId":28529,"postId":28529,"author":{"node":{"id":"dXNlcjo0OA==","databaseId":48,"userId":48,"avatar":{"url":"https://secure.gravatar.com/avatar/50102d5e35f225d865b5245a2521bb14?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Nick Wallace studied Economics at the University of Washington. He enjoys getting people thinking about finances by looking a the numbers. Nick is a freelance journalist and data analyst living in Michigan. He still lends his economic and analytic expertise for SmartAsset's studies.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Nick","fullName":"Nick Wallace","lastName":"Wallace","name":"Nick Wallace","postCount":{"pageInfo":{"offsetPagination":{"total":112,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"nwallace","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybToz","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":3,"categoryId":3,"link":"https://smartasset.com/insights/articles","name":"Insights","postCount":{"pageInfo":{"offsetPagination":{"total":53,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"insights","ancestors":null,"parent":null,"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$47","date":"2015-04-15T10:00:31","excerpt":"

\n","featuredImage":{"id":"cG9zdDoyODUzMA==","databaseId":28530,"altText":"Income Inequality in America","date":"2015-02-12T15:16:38","fileSize":73003,"mimeType":"image/jpeg","modified":"2015-02-12T15:16:38","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2015/02/5305894997_e5cfece69a_z.jpg","__typename":"MediaItem"},"modified":{"datetime":"2023-8-24","readable":"August 24, 2023"},"multipleBylinesByRole":{"editedBy":null,"reviewedBy":null,"writtenBy":null,"factCheckedBy":null,"secondEditor":null,"hideAuthor":null,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/insights/income-inequality-america","metaDesc":"How does income inequality affect real workers? SmartAsset's study of annual earnings found that management-level workers make 5 times more than workers...","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":5,"title":"Income Inequality in America - SmartAsset","__typename":"PostTypeSEO"},"slug":"income-inequality-america","status":"publish","title":"Income Inequality in America","uri":"/insights/income-inequality-america","tags":{"nodes":[],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":{"id":"dXNlcjo0OA==","databaseId":48,"userId":48,"avatar":"$48","description":"Nick Wallace studied Economics at the University of Washington. He enjoys getting people thinking about finances by looking a the numbers. Nick is a freelance journalist and data analyst living in Michigan. He still lends his economic and analytic expertise for SmartAsset's studies.","additionalMeta":"$49","email":null,"firstName":"Nick","fullName":"Nick Wallace","lastName":"Wallace","name":"Nick Wallace","postCount":"$4a","slug":"nick-wallace","__typename":"User"},"editedBy":null,"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybToz","children":"$4d","databaseId":3,"categoryId":3,"link":"https://smartasset.com/insights/articles","name":"Insights","postCount":53,"slug":"insights","ancestors":null,"parent":null,"__typename":"Category"},"isModifiedBeforePublished":false,"contentBlocks":["

By almost any measure, income inequality in the United States has grown steadily over the past few decades. According to a recent study by the Economic Policy Institute, between 1979 and 2012 the top 1% saw incomes rise over 200%, while everyone else saw income growth of just 18.7%. Those are certainly dramatic figures, but what do they mean for the lives—and paychecks—of actual income earners? To answer that question, SmartAsset developed an alternate measure of income inequality, based on the money earned by workers at the top and the bottom of the income ladder.

","

Try our free rent vs. buy calculator.

","

Using Bureau of Labor Statistics data, we compared annual earnings for the nearly 12 million workers in foodservice jobs (who often do not receive retirement benefits or health insurance) with the 6.5 million workers employed in management occupations.

","

We found the ratio of pay between these two classifications of workers over a period of 15 years, from 1999 to 2013, in all 50 states and Washington, D.C. The results demonstrate that while top earners have indeed been taking home larger salaries, many of the lowest-paid workers have seen their real take-home pay shrink over the past 15 years.

","

Mapping Income Inequality in America

","

To see what this inequality growth looks like visually, SmartAsset has created the below map. (Note: This map is no longer supported or maintained.) Adjust the slider at the top of the map to see how inequality has changed since the start of the millennium. The first tab, labeled “Inequality Growth,” reflects the percentage growth since 1999 in the ratio of management pay to foodservice pay—darker colors indicate higher growth rates.

","

The other two tabs, “Highest Inequality” and “Lowest Inequality,” reflect the level of the ratio itself. Darker colors here indicate higher overall inequality. Hover over individual states to see the growth rate and inequality ratio for that state in the selected year. Check out the table below the map to see data on the top ten states for the selected year and category.

","

Income inequality map provided by SmartAsset.com

","

Ups and Downs

","

Over the 15-year period we examined, the U.S. economy went through two recessions (one minor and one major), a period of robust economic growth between those two recessions, and a period of more moderate growth in the four years since.

","

Throughout that time, average earnings for management-level occupations grew steadily, increasing by $20,000 over the whole period. Meanwhile, earnings for foodservice industry occupations have remained completely flat. In 1999, these workers earned an average of $21,820 a year (in 2013 dollars). By 2013, they were earning $21,580.

","

$\"Change$

","

Unsurprisingly, that places foodservice workers at the very bottom of the U.S. income scale. According to the BLS, six of the seven jobs with the lowest average wages are foodservice jobs. Those six occupations (which employ a combined 5.2 million Americans) all pay less than ten dollars an hour on average, a wage at which such financial goals as homeownership and retirement typically remain well out of reach.

","

Who is Affected

","

As of 2013, there were nearly 12 million workers nationwide employed in the occupational class the Bureau of Labor Statistics (BLS) defines as “Food Preparation and Serving Related Occupations,” which includes jobs like chef, dishwasher, waitress and bartender. That makes it the third largest occupational class behind “Office and Administrative Support Occupations” and “Sales and Related Occupations” (which includes all retail workers).

","

Meanwhile, some 6.5 million Americans are employed in what the BLS defines as “Management Occupations.” Those positions pay an average of $110,550 a year, or $53.15 an hour. That is more than five times the average earnings of foodservice occupations. If that ratio seems high, it is, from a historical perspective. Since 1999, the national ratio between average earnings for management occupations and foodservice occupations has risen 23%.

","

Impact of the Minimum Wage

","

While the federal minimum wage has been raised twice in the past 18 years, many states have enacted and raised their own minimum wages to keep pace with inflation and the rising cost of living. The impact of those state laws is evident in the state measurements of the income inequality ratio.

","

Of the 21 states with a minimum wage either at or below the federal limit (as of 2013), including the five states with no minimum wage law, six rank among the top ten states with the largest disparity between management and foodservice earnings in 2013.¹On the other hand, none of the seven states that had a minimum wage at least one dollar higher than the federal minimum in 2013 were among the top ten for highest inequality between management and foodservice workers.

","

$\"Ratio$

","

The trend of inequality growth likewise demonstrates the impact of minimum wage laws. As the chart above reflects, the only period of sustained growth in foodservice incomes over the past fifteen years came between 2007 and 2009, three years during which the federal minimum wage increased by over 40%. During that time, average earnings for food-service occupations grew by $1,300, and the pay ratio fell from 4.99 to 4.93—but then continued growing, reaching the historic high of 5.12 in 2013.

","

Data & Methodology

","

All of the income data used in our study comes from the Bureau of Labor Statistics Occupational Employment Survey. The inequality ratio is calculated by dividing average earnings for management occupations (occupation code 11-0000) by food preparation and serving occupations (occupation code 35-0000).

","

In order to control for inflation, we used price level data from the Saint Louis Federal Reserve Board. All of the incomes in our study are presented in 2013 dollars.

","

Questions about our study? Contact us at blog@smartasset.com.

","

Photo credit: flickr

","

1. In states with a state-mandated minimum wage lower than the federal minimum (including states with no minimum wage law), workers are paid the federal level. That means the federal minimum acts as the state minimum in 21 states.

"],"experts":null,"link":"/insights/income-inequality-america","published":{"datetime":"2015-4-15","readable":"April 15, 2015"},"shareInfo":{"title":"Income Inequality in America","origin":"/insights/income-inequality-america"},"isNewsArticle":false}]}]