Median household income has declined 4.4% since the official end of the recession in 2009 and is 6% lower than when we went into the recession in 2007. This enduring reduction in the buying power of the American consumer may lead to a continued increase in the use of wood and pellets, as more Americans seek cheaper alternatives to oil, propane, and electric heating.
|Source: The Washington Post. Fletcher, Michael. |
"Four years after end of recession, incomes remain depressed
It is likely that the surge in wood heating between 2000 and 2010 was partly due to reduced buying power and job loss. During that time, wood and pellets were the fastest growing heating fuel in America. States where unemployment was the highest typically saw even higher growth in wood heating.
New studies show that lower income families have locked in that reduced buying power since the end of the recession. Income growth in America over the past 10 years has disproportionately gone to the top and very top income groups. Those income groups may be installing high-end outdoor kitchens and fireplaces, but they rarely use wood or pellets as a primary heating source. Rather, the lower income groups are more likely to rely on wood as a primary heating fuel, according to Census Bureau statistics.
The long-term reduced buying power of Americans is also likely contributing to the growth in the sales of less expensive wood stoves such as those sold at big box stores. Industry experts say sales of wood and pellet stoves at large hardware chains has grown significantly in the last 5 years. It also may be leading to more sales of very cheap stoves that are exempt from EPA emission standards. And, it is likely leading to more families continuing to rely on older stoves, instead of upgrading to newer, cleaner and more efficient stoves.
Inflation adjusted median household income is now about $52,000, compared to about $56,000 before the recession. What is notable is that while unemployment continues to drop, from a high of 10% to 7.5%, median income has not risen. Energy costs take a much bigger bite out of the incomes of families who are below the median income range, leading to energy insecurity and reduced use of HVAC systems.
Source: The Washington Post. Fletcher, Michael. "Four years after end of recession, incomes remain depressed"