State of Working America

The Economic Policy Institute just published its authoritative analysis on the U.S. labor market revealing the continuance of grim trends for America's working people

Some excerpts from the Press Release

"In their review of the current economic picture, five dominant factors emerge: strong growth in productivity, weak growth of jobs; stagnant or falling real household income for most families; increasingly unequal distribution of the benefits of economic growth; and the increasingly rigid economic stratification this inequality produces."

"When jobs are scarce, employees have little leverage to bargain for better wages and benefits. The share of involuntary part-timers (that is, those would want but cannot find full-time work) has continued to rise as employers cut costs by reducing work hours. As of June 2008, with the economy again shedding jobs at a recessionary pace, the number of people involuntarily working part-time has risen to about 5 million."

"Disproportionately large shares of the long-term unemployed in 2007 were more experienced workers (age 45 and older) and college educated."

"Although the economy has expanded by 18% since 2000, most Americans’ household income does not reflect that growth. Quite the opposite: real income for the median family fell by 1.1% from 2000-2006. A small increase in the median family’s hourly wages (1%) was more than wiped out by the 2.2% drop in annual work hours. Moreover, whatever wage growth occurred since 2000 was based on the momentum from the 1990s recovery—wages did not improve at all over the 2002-07 recovery."

“While most Americans were struggling, the good times were rolling among the top 10%,” said co-author Lawrence Mishel. “We have seen a large scale skimming of the benefits of growth from the bottom 90% of Americans to the top 10%, and especially to the top one percent and, even more so, the top one-tenth of a percent.”

"But if another saying is true, that in America we can all work hard and “pull ourselves up by our bootstraps,” maybe we can count on upward mobility to get us a bigger share of the pie. But the authors’ exploration of data on income mobility shows that the “bootstrap” theory does not describe most peoples’ experience. While some mobility exists, significant shares of families remain near their same position in the income scale. For example, about 60% of families that start in the bottom fifth are still there a decade later. At the other end of the income scale, 52% of families that start in the top fifth finish there at the end of the decade."

"With the next recession underway, Americans now face fresh challenges. Over 400,000 jobs were lost in the first half of 2008 as the unemployment rate rose to 5.5% - up from its 4.4% low point in March 2007. Economists expect unemployment to reach 6.4% in 2009. For African-Americans and Hispanics the outlook is graver. While both groups made significant gains in employment rates during the full-employment recovery of the latter 1990s, those gains were reversed in the 2000-2007 cycle. Based on historic patterns, the authors expect unemployment among African-Americans to be around 11% - by the end of 2009. "

stateofworkingamerica.org