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The Economy Is Slowly Strengthening

Today, we learned that the private sector continues to add jobs. 227,000 new jobs. The private sector has added jobs every month for the last 24 months. Let’s just take a second to look at the following graph. This graph nicely illustrates both public and private sector job growth and losses. Look back to those days at the end of 2008 and early 2009. We were losing over 600,000 jobs a month. It is hard to say that the president didn’t do something to reverse this trend.

From EPI:

Demographic breakdowns

Unemployment in February 2012 was 8.3 percent for those age 25 and older with only a high school education, and 4.2 percent for those age 25 and older with a college degree or more. While workers with higher levels of education have lower unemployment rates, workers at all levels of education have seen their unemployment rates roughly double since 2007, running counter to the notion that unemployment is high because employers are unable to fill their demand for workers with higher education credentials.

Considering additional breakdowns by age and race/ethnicity, we find that all major groups of workers have experienced substantial increases in unemployment over the Great Recession and its aftermath. However, young workers and racial and ethnic minorities have been and continue to be hit particularly hard.

  • In February, unemployment was 16.5 percent among workers age 16–24, 7.3 percent among workers age 25–54, and 5.9 percent among workers age 55 and older (up 4.8, 3.3, and 2.7 percentage points, respectively, since the start of the recession in December 2007).
  • Among workers younger than age 25 who are not enrolled in school, unemployment over the last year averaged 21.1 percent for those with a high school degree, and 8.8 percent for those with a college degree (reflecting increases of 9.1 and 3.4 percentage points, respectively, since the annual average of 2007). (Twelve-month averages are used here since seasonally adjusted data are not available for these series.)
  • Unemployment in February was 14.1 percent for African American workers, 10.7 percent for Hispanic workers, and 7.3 percent for white workers (up 5.1, 4.4, and 2.9 percentage points, respectively, since the start of the recession).
  • Men saw a much larger increase in unemployment than women did during the recession, but have seen stronger improvements in the recovery. The unemployment rate reached its pre-recession low in late 2006 and early 2007, at 4.4 percent for men and 4.3 percent for women. Male unemployment peaked at 11.2 percent in October of 2009, and has since fallen to 8.3 percent. Female unemployment continued to rise for another year, when it peaked at 9.0 percent in November 2010, and has since fallen to 8.2 percent.

Conclusion

The labor market still has a jobs deficit of 10 million jobs. The figure above underscores the fact that what is underlying that deficit is the length and severity of the recession that preceded this recovery. Of course, this in no way lets today’s policymakers off the hook. The key problem in the current economy is depressed demand for goods and services, which (since workers provide goods and services) translates into depressed demand for workers. Despite steady improvements in recent months, the nation’s labor market remains weak, and we continue to need aggressive policies to create jobs.

By |2012-03-09T17:46:31-04:00March 9th, 2012|Economy|Comments Off on The Economy Is Slowly Strengthening

Work isn’t valued in America

Work isn’t valued. Making money is valued but work isn’t. If work were valued, then workers would be paid more. No one would ever think about cutting wages or killing pensions if work were valued.

From EPI:

Over the last 30 years there has been very modest wage growth for the typical worker. This is not because the economy was weak and employers were strapped for cash or profits. The economy enjoyed soaring productivity between 1980 and 2009. The Figure compares median wage growth over that period to average gross domestic product growth per worker, a measure of what each individual worker, on average, contributed to the overall economy. This is equivalent to the growth of income per worker as well. While average income per worker grew 59.0%, median wages grew by just 11.2%. Over this same period the amount of wealth (household assets less liabilities) per worker grew by 63.7%.

This modest wage growth was not the result of a broken economy: rather, modest wage growth is the result of the way the economy has been designed to work.  Essentially, economic policy of the last three decades has not supported good jobs. The focus instead has been on policies that claimed to make consumers better off through lower prices: deregulation of industries, privatization of public services, the weakening of labor standards such as the minimum wage, erosion of the social safety net, expanding globalization, and the move toward fewer and weaker unions. These policies have served to undercut the bargaining power of most workers, widen wage inequality, and deplete access to good jobs. In the last 10 years, even workers with a college degree have failed to see any real wage growth.

By |2011-03-20T21:11:52-04:00March 20th, 2011|Business, Economy|2 Comments
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