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“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.

Chart by Center for Labor Market Studies
Frustratingly, but not unexpectedly—because job growth is always a "lagging indicator" during economic recoveries—unemployment continued to rise for three quarters after the recession officially ended. And while jobs finally did begin to come back at the end of 2010, by the end of the first quarter this year, payroll employment was still 400,000 below the bottom of the recession. Total civilian employment was 700,000 below that level. The situation has only improved slightly in the three months since then.

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.
Table by Center for Labor Market Studies
 
Those are sobering numbers:
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."

Originally posted to Daily Kos on Thu Jun 30, 2011 at 05:00 PM PDT.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

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Comment Preferences

  •  The working class got nuked. (22+ / 0-)

    All the jobs created by teh record profits went overseas.

    look for my eSci diary series Thursday evening. "It's the planet, stupid."

    by FishOutofWater on Thu Jun 30, 2011 at 05:03:48 PM PDT

    •  The working class is fine (6+ / 0-)

      So is everybody else.

      As MB noted...

      ...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."

      528 Billion times 1 percent is 5 Billion 280 Million dollars.

      Divide that by 310 Million people and it works out that every single American, even all the deadbeats without jobs, increased their income by about 17 dollars and 3 cents over the same period, or almost 95 cents A MONTH!

      What's all the complaining about? Jeeze. Some people are never satisfied. Unbelievable.

      Antemedius | Liberally Critical Thinking

      by Edger on Thu Jun 30, 2011 at 06:40:33 PM PDT

      [ Parent ]

  •  The difference with this recovery? - Unions (8+ / 0-)

    In past times unions had both the power and the balls to demand that workers got their fair share.  Now American unions have both less power and less courage to fight (except mine of course)http://www.nationalnursesunited.org/...

    "Wouldn't you rather vote for what you want and not get it than vote for what you don't want - and get it?" Eugene Debs. "Le courage, c'est de chercher la verite et de la dire" Jean Jaures

    by Chico David RN on Thu Jun 30, 2011 at 05:09:11 PM PDT

    •  Jobless and "Demand-less" = Bubble Recovery. (9+ / 0-)

      A sustainable, reliable recovery needs a reliable, sustainable "DEMAND".

      Without jobs and without increasing wages, increased demand for goods and services cannot be sustained.

      Without sustainable demand, there is no reason to increase supply.

      Without a need to increase supply and without hope of increasing profits through investing to increase supply, no amount of tax breaks will incent investments when no profits will come of them.  

      Squeezing additional short-term profits out of the misfortunes brought about by this financial collapse and resulting recession may provide a bubble of increase in share price and dividends, but is another bubble really what we want?

      And do we want to provide tax cuts to the wealthy to incent the activities that lead to that short term bubble (as proposed in the Ryan/Republlican budget)?

      Have we learned nothing from the last 10 years (or last 30)?

      The concepts of Fordism and the long-term positive impact on our economy that increased wages and more jobs can have have not been erased by the exotic financial formulas that were the sandy foundations of the shadow economy.

      The need for demand in an economy cannot be magic'd away.  

      If you do not feed it it will starve.  When you need it to help pull you back up the hill, it's wise to feed it now and again.

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Thu Jun 30, 2011 at 06:22:47 PM PDT

      [ Parent ]

  •  All of the above (9+ / 0-)

    The new Gilded Age, with its one-sided top-down class war, IS the "New Normal".  And has been for quite some time.

    "Tu vida es ahora" ~graffiti in Madrid's Puerta del Sol, May, 2011.

    by ActivistGuy on Thu Jun 30, 2011 at 05:11:12 PM PDT

  •  Financialization of the economy means what's good (7+ / 0-)

    Wall Street investment Banks isn't good for American Workers anymore. If its far more profitable to put your money into derivatives, than to expand a business inside this country, the capital goes elsewhere.  

    The radical free market era that started with Reagan has accelerated and become much more entrenched and destructive. Now it is ripe to come tumbling down in the next banking crisis. That may already be on the way with the debt crisis in Europe.

    Plutocracy too long tolerated leaves democracy on the auction block, subject to the highest bidder ~ Bill Moyers

    by Lefty Coaster on Thu Jun 30, 2011 at 05:16:02 PM PDT

  •  There is no such thing . . . (2+ / 0-)
    Recommended by:
    foucaultspendulum, jolux

    as a jobless recovery!

  •  We're Stuck Calling It Total Failure of Liberalism (3+ / 0-)
    Recommended by:
    dinotrac, Dose o Reality, wsexson

    If there's anything both sides can agree on, that'll be it.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Jun 30, 2011 at 05:27:44 PM PDT

    •  Call it a Total Failure of Neo-Liberalism (2+ / 0-)
      Recommended by:
      farbuska, parryander

      Plutocracy too long tolerated leaves democracy on the auction block, subject to the highest bidder ~ Bill Moyers

      by Lefty Coaster on Thu Jun 30, 2011 at 05:32:28 PM PDT

      [ Parent ]

    •  Total Failure of Reaganism and Bachmannism (2+ / 0-)
      Recommended by:
      jolux, chickeee

      That views wages as only a cost.  

      Fordism viewed wages as a mechanism to provide increased purchasing power that spurred on increased demand.  

      The only failure of liberalism was to ever, even for a moment, stop fighting with all its might for a concept of a free market that actually had been proven to work for the middle class and work to lift low income workers up into the middle class and unemployed poor in the working class.  

      That may be a battle lost, but not the war.

      We'd rather dream the American Dream than fight to live it or to give it to our kids. What a shame. What an awful, awful shame.

      by Into The Woods on Thu Jun 30, 2011 at 06:26:01 PM PDT

      [ Parent ]

  •  This is what happen when you reward the (5+ / 0-)
    Recommended by:
    farbuska, parryander, jolux, wsexson, avsp

    perpetrators...

    The rest of us get kicked even harder.

    Great Recession?

    Yeah, if you're one of the winners.

    For the rest of us?

    Looking a lot like a depression, and there ain't no great about it.

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Thu Jun 30, 2011 at 05:30:14 PM PDT

  •  okay... (1+ / 0-)
    Recommended by:
    jolux

    but how long before anyone who can change it cares?

  •  The recession in early 90's was also brought on (1+ / 0-)
    Recommended by:
    jolux

    by a bubble.  The stock market collapse in 1987, followed by the Savings and Loan meltdown.  Very similar to this one.  The one added ingredient after that particular recession is NAFTA, and the subsequent erasing of borders in the labor market.  

    "In a nation ruled by swine, all pigs are upwardly mobile." Hunter S. Thompson

    by Keith930 on Thu Jun 30, 2011 at 05:35:23 PM PDT

  •  From the Talking Heads, a bipartisan message: (1+ / 0-)
    Recommended by:
    jolux

  •  I see both sides here (4+ / 0-)
    Recommended by:
    chimpy, Boogalord, jolux, Geenius at Wrok

    A lot of my job involves automating away manual labor. We don't lay anyone off directly because of this, but we sure try to avoid hiring extra people as much as possible. We still do manual labor sometimes, but usually for low-volume jobs and as soon as we hit any kind of quantity we automate it as fast as possible.

    This kind of dynamic provides jobs, but far fewer jobs and mainly to people fluent in computer programming, hardware design, etc. Over time, this tends to concentrate income at the top, not just for big shot CEOs, but also for mid-level engineers and managers (company would rather pay an automation engineer $60 an hour than have to shell out $15/hr endlessly on manual tasks).

    I don't know what the solution is if there is one, but unskilled labor is going to continue to be devalued even more in the future. It is imperative for any worker to continue to expand their skill set in any way possible. The days of being paid $40/hr to turn a wrench are over permanently.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Thu Jun 30, 2011 at 05:40:53 PM PDT

    •  this makes sense (1+ / 0-)
      Recommended by:
      farbuska

      the problem is the costs of schooling and "expanding your skill set". shit, i couldn't friggin believe it when i heard about the path one goes about in becoming a firefighter. maybe pay for one semester class, get entry level training, get on a volunteer dept (you could skip the class depending on the dept) and they'll pay for your EMT and Paramedic training. shit yeah dude, that fucking rules compared to the cost of most "skill sets" these days

    •  Automation is not a problem. It should actually (4+ / 0-)
      Recommended by:
      jolux, Geenius at Wrok, nchristine, Bright

      help people to get rid of tiring, monotonous, boring work. People could work less and have more leisure, paid vacation and time to enjoy life. Problem is with sharing the profits.

      Armageddon was yesterday, today we have a serious problem.

      by farbuska on Thu Jun 30, 2011 at 06:12:50 PM PDT

      [ Parent ]

    •  Step one, stop tax breaks for outsourcing (0+ / 0-)

      2) Pass the Employee Free choice act.
      3) Employ demand side economic and tax policy.

      The days of being paid $40/hr to turn a wrench are over permanently.

      Agreed, just like the days of 4.5% GDP growth are gone (unless Polywell fusion become s a reality) for the foreseeable future. But 3% to 3.5% should be attainable. Even in thte age of resource depletion and peak oil.

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Fri Jul 01, 2011 at 12:00:35 PM PDT

      [ Parent ]

  •  It's the "New Normal" for now, (1+ / 0-)
    Recommended by:
    jolux

    The push is to downsize all but the top 1%.

  •  Sobering indeed (3+ / 0-)
    Recommended by:
    parryander, farbuska, jolux

    That information is sobering indeed, MB.  I truly don't think that we can compare our current economic situation in America to anything we've ever had in the past.  Oh, sure, I know there are things that show some comparison, but how we got here vs. how any other recession was experienced is different, imo.  I also think that the way in which things are being experienced right now with so many workers being unemployed and, just as importantly, underemployed just as the wealthiest among us and the companies we've relied on so much in our past to employ our citizens are realizing record amounts of earnings/profits.  Today, we don't have just an American economy dynamic to consider anymore.  We have become more and more dependent on the world economic dynamic with so many of the companies/businesses that use to be decidedly American are no longer that way anymore.  We don't have competition in the workplace just within America anymore.  It's worldwide competition for those jobs now.  

    We don't manufacture one single television in America anymore (could be some exception I don't know about here, but I'm kinda pretty sure on this :-).  Even our American-made automobiles get many of their parts from foreign countries.  Go to WalMart and find out how many shirts/pants/jackets/shoes/sox/hats you can find that say "Made in USA".  

    Sure, we got into this mess because of greed and horrible decisions by banks and shady political dealings in our own legislatures in many cases from BOTH sides.  But, my point of saying all of this is that I don't think we are going to be able to count on the companies in America to pull us out of this like we've counted on that in the past.  Government is gonna have to make some serious decisions.  Maybe American capitalism as we've known it is reaching its end point and maybe we've got to develop some kind of hybrid in its place.  No..don't go off on me saying I'm a socialist or marxist etc.  That's not what I'm suggesting.  But, changes are going to have to be made and they're going to have to be made before we become just one more "system" that has eventually failed driving its people into destitution and devastation..  

    Let's do it now before we end up with those few wealthy elements totally running both our economic and political systems.  That has a name too, you know.  And, it's pretty damn ugly.

    -- **Nothing sucks more than that moment during an argument when you realize you're wrong.**

    by r2did2 on Thu Jun 30, 2011 at 05:52:51 PM PDT

    •  "Socialist" doesn't mean anything bad or wrong (3+ / 0-)
      Recommended by:
      jolux, Geenius at Wrok, wsexson

      or shameful.

      Armageddon was yesterday, today we have a serious problem.

      by farbuska on Thu Jun 30, 2011 at 06:15:59 PM PDT

      [ Parent ]

      •  It is true, farbuska (1+ / 0-)
        Recommended by:
        jolux

        No, I didn't mean that either....I can see how someone could take what i said as meaning "socialist" was bad or wrong...at least as you think of it as being bad or wrong.

        Now, having said that, I do not think that America should become a socialist country.  Capitalism here in America has had its good and bad times...good and bad elements...but all-in-all, it has proven out to be the best economic system any other civilization or region or country has come up with.  What has happened to our capitalist system in America is that government hasn't been willing to enact/enforce enough laws/controls to reign in the darker, more devious individuals within our economic system.  I propose a kind of hybrid system that favors enabling the free market while at the same time having strict controls that severely punish those that are found to go against our people through unethical and unlawful means...REGARDLESS how much money they are worth and REGARDLESS who they contribute to within the political arena.  

        -- **Nothing sucks more than that moment during an argument when you realize you're wrong.**

        by r2did2 on Thu Jun 30, 2011 at 06:28:08 PM PDT

        [ Parent ]

  •  It's Really About Trade (0+ / 0-)

    When you look at these numbers, you can just see once again how our horrific trade policy is undermining job growth and tanking the economy. Wages in real dollars (for all but the richest employees) have declined 8% since the 1970s, and we have 0.9% higher unemployment. That's because we've been outsourcing production jobs, which are the basis of wealth production.

    Congress is to blame for this because Congress controls economic policy. They need to reverse their course on "free trade", set a much more aggressive industrial policy, align education with productive jobs, and get on a national healthcare plan. Specifically, they need to set a baseline tariff (probably a 1% tariff on all products brought into the country) and demand an international minimum wage for everyone contributing to any product sold here.

    Those are kind of the minimum steps to get job growth back.

    Yes, you can stimulate. But you know what would happen if you wasted your time stimulating a dead horse.

  •  Summer 2010 Deloitte CEO poll said (0+ / 0-)

    from med and large corporations, they expected 9 to 15% growth.

    All the while GDP seemed to be in the 2.5% to 3% range, with U^ in the 17%+ area. SO a corporation saw 9%+ growth while 20% of America sat idle. Fookin amazing......

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Fri Jul 01, 2011 at 11:41:55 AM PDT

  •  Pics of Omaha's Monument to Labor, A Metaphor (0+ / 0-)

    I have included some great facts and charts with links that you will find helpful, FOW

    Pics of Omaha's Monument to Labor, A Metaphor

    With the foreclosure figures included.

    This is a VERY BAD story that unfolded.

    It's difficult to be happy knowing so many suffer. We must unite.

    by War on Error on Fri Jul 01, 2011 at 12:45:13 PM PDT

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