By Chico Harlan 

Let’s take a typical worker in the bottom fifth of earners and look at what’s happened to him in the 21st Century. Since 2000, his household’s income, after adjustment for inflation, has dropped about 15 percent. The amount in his savings account, always meager, has fallen too — by about 35 percent. If he fell out of work as the economy slid into recession, he may have fallen behind on paying his bills, hurting his credit score just as banks tightened lending.

And, in the more than five years since the end of the Great Recession, he returned to a much different low-wage market — one with a preponderance of part-time jobs.

That’s a lot to digest at once. But taken together, this means that over the last 15 years, poorer Americans have:

1) less money to spend;
2) less opportunity to borrow and;
3) less certainty about the size of their paychecks.

These three factors help explain why, as I write about today, people might pay $1,439.28 for an old iPad, in 72 weeks of payments. I spent time learning about customers who visited one a rent-to-own store in Cullman, Ala., and nearly everybody I interviewed described experiencing one of three changes in their lives, if not all of them.

Below, three graphs that show how the poor have been slipping back, even as the economy has been recovering.

For those at the bottom, incomes have come down since 2000. But zoom out further, and the picture becomes one of remarkable stagnation. Income averages in the lowest- and second-lowest quintiles, adjusted for inflation, remain essentially unchanged from where they were 30 years ago.

There’s no perfect correlation between credit scores and income levels — indeed, some low-wage earners are great borrowers. Still, the subprime craze of the early- and mid-2000s tended to target lower income Americans, offering them loans with interest rates they often couldn’t pay back when the housing market crashed.

Now, the pendulum has swung. The above data looks at mortgages loans only, but the data is a fair stand-in for major purchase lending. As you can see, people with a credit (FICO) score of less than 660 used to get two in every five mortgages in America. Now they get one in every 10. And those with credit scores less than 600 have been elbowed out of the borrowing market entirely. The tighter credit market has an upside — fewer are left with unpayable debts — but it also increases the difficulty of making big purchases.

The number of people working part-time involuntarily (that is, they want full-time work and can’t find it) shot up as the economy declined six years ago. Since then, things have improved, but nowhere close to what economists say is fast enough.

Many employers, it turns out, are sticking with habits they formed during tougher business times, using part-time labor that grants them more flexibility and saves money. The problem is, “risk is transferred to the employees,” said Liz Ben-Ishai, a senior policy analyst at CLASP, a nonprofit that advocates for low-income families. “A lot of employers have changed the way they operate, depending on that part-time and temporary model as a cost-saving measure.”