workers freedom

economics as if workers mattered

Whose Recovery?

We are, or so the boss press insists, in the midst of an economic “recovery” that began in July 2009, ending the 19-month American recession. When hard times hit, we expect the bosses to demand that working people bear the costs of economic policies we had no hand in shaping. And we did. Our pensions have been gutted, average (median) pay fell an inflation-adjusted 3.2 percent, and millions of our fellow workers paid for the bosses’ looting and speculation with their jobs. (And continue to pay with our jobs; the government says it takes a laid-off worker about 41 weeks to find a new job right now, and they count everyone who lands even a few hours a week in part-time work as back on the job. Those that did find a new job are also earning a lot less than they did at their old one — 17.5 percent less, om average.)

But now that we’ve been recovering for more than two years, times are even tougher for working people. The stock market might be rebounding; lobbyists are doing well; economic pundits are getting plenty of airtime telling us how great things could be if we would get give the rich a bit of a boost… Things are going pretty well for everyone except those of us who have to work for a living. A new report by two former Census Bureau officials looks at official government wage surveys, and finds that median household income has fallen by 6.7 percent since the recovery began. So the average worker is now 9.8 percent worse off “today” (actually June; the latest month for which data was available, so it will be worse now), after inflation, than we were four years ago.

The median represents the middle of the income spread. Half earns more, half less. So the top third or so would seem to be doing OK under this economic recovery, even if they’d like deeper tax cuts to motivate them to do more looting so that they can get the economy back into full speculation gear. The “bottom” two-thirds get poorer and poorer the “better” the economy is doing.

Of course, the pain is not evenly distributed. Some folks were so very poor that it wasn’t possible for their income to get much lower. Those pesky minimum wage laws the rich keep pointing out stand in the way of more jobs (if we worked for free, there’d be jobs for all, as the saying goes) prevented wages from being cut as much as the bosses would have wished, even if off-the-book work, unpaid overtime and the like helped ease the bosses’ pain. But otherwise, incomes fell more for those who earned less, for those who live in families (and so have children to support), and for African-American and Hispanic workers, who were already being paid much less. The harder you work, the less you make. That’s always been true under capitalism. And the less you make, the more will be stolen from you when the bosses are looking to get their bonuses and stock options back in shape.

Things weren’t so great even in the boom times before the recession. The New York Times published a chart showing inflation-adjusted income  from January 2000 until June 2011. There was a slight upward tick at the beginning of the period, especially during the 2001 recession, but since we got out of that recession income has been gradually going down, down, down; broken most notably by another uptick at the start of the Great Recession (prices went down faster than the bosses could cut our wages) which got income back up to 2002 levels in January ’08 before plunging ever lower. And back in the Clinton boom times, I wrote more than once about how wages for the bottom 40 percent were falling year by year, even as working hours gradually crept back to 1920s levels.

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