I keep trying to wrap my mind around this, but I can’t quite do it. As if income inequality in the US wasn’t bad enough, the recession has made it even worse.
The wealthiest 10 percent of Americans — those making more than $138,000 each year — earned 11.4 times the roughly $12,000 made by those living near or below the poverty line in 2008, according to newly released census figures. That ratio was an increase from 11.2 in 2007 and the previous high of 11.22 in 2003.
Household income declined across all groups, but at sharper percentage levels for middle-income and poor Americans. Median income fell last year from $52,163 to $50,303, wiping out a decade’s worth of gains to hit the lowest level since 1997.
It’s just…astounding. It’s stuff that we all need to know—figures we need to have seared into our brains as we think about this economy we live in—but how can you even come up with words to assess the reality these numbers portray?
Tags: recession
At first I thought this must be a typo:
“Wait Until 2017 Before Job Market Recovers, Report Says”
But no, that’s the headline in today’s Economix blog story by Steven Greenhouse at nytimes.com
In a depressing new report, two Rutgers professors predict that it will take more than seven years to restore the health of the nation’s labor market to pre-recession levels.
The report, released on Wednesday, says that even if the nation adds more than two million jobs annually over the next seven years, that will barely offset what the authors see as a giant employment deficit.
The large employment deficit, the report says, was created by the loss of 7.1 million private-sector jobs since the recession began in December 2007 and by the economy’s failure to keep up with labor-force growth — that is, the increasing number of people who want jobs — during the recession.
The 16-page report (pdf), written by James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy, and Joseph J. Seneca, professor and an economist at the Bloustein School, gives job growth over the last ten years a failing grade. It calls the decade from 1999-2009 “The Lost Employment Decade” because the nation will “exit the decade with fewer jobs than when it began” — 1.3 million fewer private-sector jobs.
To return to the labor market conditions of 2007, the report said the nation would not only need to offset the 1.3 million annual increase in the labor force, but would also need to compensate for the job losses suffered during the recession. Given conservative estimates of further declines in employment, the Rutgers professors see an overall employment deficit of 9.4 million private-sector jobs by December 2009.
“Erasing this deficit will require substantial and sustained employment growth,” the report said.
How much sustained employment growth?
“Even if the nation could add 2.15 million private-sector jobs per year starting in January 2010,” the report said, “it would need to maintain this pace for more than 7 straight years (7.63 years), or until August 2017, to eliminate the jobs deficit!”
But the economy is not a magic act. And if policy makers are governed by the budget-deficit-fearing “experts” rather than by economists who seek an effective attack on the catastrophic jobs deficit, the kind of employment growth we need may never happen.
What about the budget deficit fears? Economist Dean Baker said a couple of days ago:
The basic story on the budget deficit is very simple: We need badly need large budget deficits in the short term. They are the only force that can sustain demand in the economy after the collapse of housing construction and the loss of the consumption that had been supported by $8 trillion in illusory housing bubble wealth.
As economist Paul Krugman noted yesterday, we remain stuck in a liquidity trap which requires fiscal expansion just to begin to gain any traction for jobs and recovery. That fiscal expansion, Krugman notes, rather than “crowding out” private investment actually stimulates it “because a stronger economy leads to more investment.” Fiscal expansion, he says, increases not just future potential, but also future revenue expansion.
If we are going to start creating the “substantial and sustained employment growth” required to address our massive jobs deficit, continued fiscal expansion and large-scale job-creation initiatives are needed now.
We can’t wait.
Tags: Jobs, recession, recovery
