Hardly anyone in the U.S. economy feels prosperous

Hardly anyone in the U.S. economy feels prosperous ~ I, Cringely
 September 2nd, 2012 by Robert X. Cringely

A couple of years ago, in an obvious moment of poor judgement, the Kauffman Foundation placed this rag on its list of the top 50 economics blogs in America. So from time to time I feel compelled to write about economic issues and this Labor Day holiday in the U.S. provides a good excuse for doing so now. In a sense you could say I inherited this gig because my parents began their careers in the 1940s working for the U.S. Bureau of Labor Statistics. This first of two columns looks at employment numbers in the current recovery while the second will try to explain why the economy has been so resistant to recovery and what can be done about it.

You’ll see many news stories in the next few days based on a study from the National Employment Law Project detailing how many and what kinds of jobs were lost in the Great Recession and what kinds have come back in the current recovery. Cutting to the chase we lost eight million jobs, have recovered four million of those, but — here’s the problem — the recovered jobs on average pay a lot less than did the jobs that were lost, which is why the U.S. middle class is still hurting.

According to the study, mid-wage jobs such as construction trades, manufacturing, and office employees accounted for 60 percent of the employment drop during the recession but made up just 22 percent of the recovery through March 2012. So-called low-wage jobs like retail and food service workers made up 21 percent of the losses but 58 percent of the subsequent growth.

So while we may have regained 50 percent of the lost positions, we’ve regained significantly less than 50 percent of the lost personal income. With less income we have less to spend and spending is what expands economies.

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