Highlights II
By Richard E. Noble
The following are a few highlights from the second chapter of a text published by the Economic Policy Institute. This is a group that studies the American Economy and writes a yearly report on how working people are being affected.
1) Federal Reserve officials view faster productivity growth as forestalling inflationary pressures.
2) The economic recovery that began in November 2001 set a record not for growth but for hosting the longest “jobless recovery” on record ... the employment rate (the share of the population at work) was still below its 2000 peak.
3) The living standards of most working families have been stagnant in recent years. In fact, by 2004 (the latest data) the real income of the median or typical family was lower than in 2000, and inflation adjusted wages, whether for high school or college educated workers, grew hardly at all since 2000. The number of poor persons grew by 5.4 million between 2000 and 2004, while 6 million were added to the ranks of the uninsured.
4) If the nation is indeed wealthier in 2006 than at the peak of the last business cycle in 2000, but many family incomes are lower and the share in poverty has grown, where is all the money going? This answer is fairly obvious as well: wage, income, and wealth are being drawn to the very top earners and families; this redistribution is a continuation of a historic trend that began in the late 1970.
5) Globalization ... its fingerprints are all over the diminished bargaining clout of blue and white-collar workers who now compete directly with workers from abroad, many of whom are highly skilled but from low wage countries … The 2000s have also been a period of offshoring jobs ... employer provided health and pension coverage also contracted in the 2000s ... employers have been shifting more of the cost of these fringe benefits onto workers.
6) The unemployment rate is artificially reduced if job seekers give up their search. Only those actively seeking work are counted as unemployed ... It is likely that many of those workers, were they to enter the job market, would be added to the ... unemployed, leading to a significant higher unemployment rate.
6) The growth in profitability has left less room for wage growth, and might be considered the consequence of business’s successfully restraining wage growth as sales and profits grew.
7) ... more young men age 25-34 are living with their parents ... In fact, the earnings of every age group of workers with some college in 2000 were less than what that same age group of some college workers earned in 1970s ... So, despite an economy that was two thirds more productive in 2000 than in 1970, the beginning earnings of high school and workers with some college were actually lower.
8) There are aspects of today’s economy that ... tilt against the bargaining power of American workers: increased global trade, fewer unions, and more low skilled and high skilled immigration. There are fewer favorable social norms that guide employer behavior and support public and employer policies that provide adequate safety nets, pensions, and health care arrangements.
9) When it come to an economy that is working for working families, growth in and of itself is a necessary but not sufficient condition. The growth has to reach the people: the backers need to benefit from the bread they create each day of their working lives.
10) America’s working families continue to work harder and smarter. But, while the economy provides them with the potential for prosperity, that potential has yet to be consistently realized.
Richard E. Noble is a Freelance Writer and has been a resident of Eastpoint for around thirty years. He has authored two books: "A Summer with Charlie" which is currently listed on Amazon.com and "Hobo-ing America" which should be listed on Amazon in the not too distant future. Most recently he completed his first novel "Honor Thy Father and Thy Mother" which will be published soon.
