Recovery the worst since WWII
A new report by EPI economists John Irons and L. Josh Bivens, released today, finds that by almost every measure, the recovery from the 2001 recession was the worst in more than 60 years. Their “Feeble Recovery” analysis found that the November 2001-to-December 2007 recovery ranks dead last compared to the other nine recoveries on six key indicators: GDP, investment, employment, compensation, wage and salary income, and the employment-to-population ratio; it ranks next to last on consumption and changes in the unemployment rate. The only indicator where the most recent recovery scored above the basement was in profits, where it ranks fourth out of 10. Typical American workers are worse off now, after the so-called recovery, than they were before the last recession started. The report was prompted by a series of negative jobs reports, two quarters of barely positive GDP, and other indicators that allowed Irons and Bivens to confidently declare that a recession has indeed begun.
When slightly positive is as bad as negative
EPI’s take on the latest GDP numbers, released Wednesday morning by the Commerce Department, was that the miniscule 0.6% growth reported is not nearly enough to prevent rising unemployment. Economist L. Josh Bivens noted in an early response that “There’s nothing magical about staying above zero. In fact, annual growth of less than 2.5% is a recipe for rising unemployment. We’re already seeing this in three consecutive months of job loss, and considering the GDP numbers released this morning, we’ll surely see more in the coming months.”
Build! Build! Build!
With a preacher’s zeal, Pennsylvania Gov. Edward Rendell called for a “massive spending program” to maintain, repair, and expand the nation’s infrastructure, including roads, bridges, rail lines, ports, and water and sewer systems, at a standing-room-only EPI Agenda for Shared Prosperity forum on infrastructure. Rendell, the keynote speaker, recently teamed up with California Gov. Arnold Schwarzenegger and New York City Mayor Michael Bloomberg to create greater awareness through a new group called Building America’s Future. Rendell said the nation has been putting off needed investments for too long, and it is beginning to pay an economic price for it. “We are a few years away from total devastation and total crumbling, and we just sort of bump along without doing much about it,” he said. Rendell said there is growing support in Congress for establishing an infrastructure bank or a capital improvement fund that would facilitate such projects, although such efforts have failed for decades. Speakers, including Congressman Earl Blumenauer, Mary Filardo, Mark Lloyd, and EPI Research and Policy Director John Irons later addressed a variety of needs, such as greater investment in schools and for a nationwide broadband network. A recurring theme was that infrastructure investment also creates good jobs, which would help soften the recession. More information on the event (including audio and video) and copies of related EPI Briefing Papers on schools and overall infrastructure investment are available online.
The drive for economic equality is stuck in neutral
Income inequality between whites and blacks is often used to compare outcomes, but the gap in wealth, or net worth, actually serves as a better–and more alarming–indicator. Contrary to conventional wisdom, the wealth gap has not improved in recent years: In 2004, when home equity is subtracted, blacks held less than 1% of the $36,100 net-worth held by whites. EPI’s Outreach Coordinator Christian Dorsey pondered the wealth gap in this week’s Economic Snapshot.
More on the teaching penalty
Lawrence Mishel, Sylvia Allegretto, and Sean Corcoran, authors of a newly released EPI book on the relatively low wages paid to teachers, wondered why the point doesn’t get more attention in discussions of improving teacher quality in this week’s op-ed in Education Week.
Book talk with Arianna Huffington and Jared Bernstein
Pundit and cultural phenomenon Arianna Huffington joins EPI’s own Jared Bernstein at EPI at 4 p.m. Monday, May 5. Both will discuss newly released books: Huffington’s Right is Wrong: How the Lunatic Fringe Has Hijacked America, Shredded the Constitution, and Made Us All Less Safe (and What You Need to Know to End the Madness) and Bernstein’s Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries). Find more information and reserve a seat.