“The only major beneficiaries of the recovery have been corporate profits and the stock market and its shareholders.”
That's the conclusion of a new report from the Center for Labor Market Studies at Northeastern University titled The “Jobless and Wageless” Recovery from the Great Recession of 2007-2009.
The short version: American workers took it in the chops. And that's still happening because the so-called recovery has produced very uneven results compared with previous postwar recessions. Not only has the increase in jobs come at a dribble, wages haven't moved.
In fact, from the time the recession ended in June 2009 until the end of the fourth quarter of 2010, national income grew by $528 billion. But, the report states, "corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent." The rest went to net interest, rental income and proprietors' income.
Steve Greenhouse notes:
According to the Bureau of Labor Statistics, average real hourly earnings for all employees actually declined by 1.1 percent from June 2009, when the recovery began, to May 2011, the month for which the most recent earnings numbers are available. …
The story was very different for the recovery that began in 1991. In that recovery, 50 percent of the growth in national income went to wages and salaries during the first six quarters after the recession ended, while corporate profits actually fell by 1 percent during that period.
Beginning in December 2007, both nonfarm payroll employment and total aggregate civilian employment fell sharply along with gross domestic product. Since the recession officially ended in June 2009, however, the GDP has risen for seven straight quarters, having surpassed the peak it had reached when the recession began three years earlier. GDP growth slowed to a paltry annual rate of 1.9 percent in the first quarter of 2011, but it nevertheless continued expanding.
The report's authors, led by Andrew Sum, concluded:
The economic recovery from the Great Recession of 2007-2009 still remains a “jobless recovery” despite employment growth since early 2010. The concept of a “jobless recovery” first came into use during the recovery from the 1990-91 recession when job growth remained weak until late in 1992. To put employment developments in the current recovery in perspective, we compared the absolute and per cent change in both nonfarm payroll employment and aggregate civilian employment from the quarter of the cyclical trough to seven quarters later for five of the past six national recessions.
Total payroll employment grew by 3.242 million or 4.2% during the recovery from the 1973-75 recession and by an even stronger 6.231 million jobs or 7.0% in the recovery from the 1981-82 recession. In contrast, payroll employment grew very modestly (only .4%) in the first seven quarters of recovery from the 1990-91 recession.
Following the end of the 2001 recession in November of that year, payroll employment continued to fall through the summer of 2003 and remained .8% below its trough level seven quarters later in the third quarter of 2003. In the current recovery, despite the growth in employment since the Spring of 2010, the total number of nonfarm wage and salary jobs in the first quarter of this year (130.558 million) was still nearly 400,000 below its level at the trough of the recession in the second quarter of 2009.
Is there a hint of class warfare in these numbers? The stink of a New Gilded Age? Or are we stuck calling it the "new normal."