What has Affected U.S. Savings Rates?
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One important lesson derived from the 2008 recession is the importance of a substantial savings account to help overcome a challenging unforeseen event, such as losing one’s job. In recent years, the savings rate among Americans has risen significantly, currently at an average of 6.7 percent.
However, new IRS data reveals that the main driver of that increase isn’t from rank-and-file American workers but rather sole proprietors and small-business owners. While this demographic relies on their own independence for their livelihood and therefore may have learned this lesson the best, the evidence shows that their income has grown substantially and they are subsequently saving more.
Unfortunately, the same cannot be said of other U.S. workers, who have not experienced significant wage increases since the Great Recession.