Media clips
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As Matt Yglesias reported just a few minutes ago, the US in May hit the number of jobs it had prior to the recession. That’s great news, but it only means we’ve climbed out of a massive hole. Had job growth continued unabated instead of being tanked by the recession, there would be millions more jobs, the left-leaning Economic Policy Institute reports today:
VOX June 11, 2014 -
Yet, this isn’t the moment to break out the champagne. Given population growth over the last four years, the economy still needs more jobs to truly return to a healthy place. How many more? A whopping 7 million, calculates Heidi Shierholz, an economist with the Economic Policy Institute.
President Obama’s administration was quick to point out that the recovery is still incomplete by their standards.
“We’re moving in the right direction, but we have a lot more work to do,” said Secretary of Labor Tom Perez. “There are way too many people who are still on the sidelines.”
As of May, about 3.4 million Americans had been unemployed for six months or more, and 7.3 million were stuck in part-time jobs although they wanted to work full-time. Both these numbers are still elevated compared to historic norms, and are of concern to Federal Reserve officials, who will meet in two weeks to re-evaluate their stimulus policies.
CNN Money June 11, 2014 -
If at least 98,000 positions were added in May, the total number of U.S. jobs would finally return to its level in December 2007, when the Great Recession began. Yet that’s hardly cause for celebration: The population has grown nearly 7 percent since then.
Economists at the liberal Economic Policy Institute estimate that 7 million more jobs would have been needed to keep up with population growth. Average wages, meanwhile, have grown just 2 percent a year since the recession ended, below the long-run average annual growth of about 3.5 percent.
Many economists predicted late last year that growth would finally pick up in 2014 from the steady but modest pace that has persisted for the past four years.
AP June 11, 2014 -
(Also in Money News, MSN Money, al, htrnews.com, dnj.com, WUSA9, Fox News, The Telegraph)
Some of that decline comes from an aging country in which more people are retiring. But the share of working adults among the overall population is “still bouncing around at the bottom where it was during the worst of the recession” — evidence that meaningful wage gains across the economy are unlikely, O’Keefe said.The recovery hasn’t kept up with the expanding U.S. population. Researchers at the liberal Economic Policy Institute estimate that 7 million more jobs would have been needed to keep up with population growth.
The pain has been concentrated largely among lower- and middle-income workers, according to an analysis by the institute.
AP June 11, 2014 -
(Also in The Republic, Epoch Times, The Salt Lake Tribune, The Boston Globe, Times Leader
There’s a flip side to that, though, Van Horn suggests: “As the economy gets stronger, as it continues to grow, eventually some of those discouraged workers will come back into the labor market, and we’ll have a higher labor-participation rate.”But that hasn’t happened — yet.
“We know that the reason unemployment is so high right now is pretty simple: employers haven’t seen demand for their stuff pick up in a way that would require them to bring on more workers, put that factory back on line, get more people to work,” said Heidi Shierholz, chief economist for the Economic Policy Institute, a labor-oriented Washington think-tank.
“It’s going to be this way for a while. We’re in a long slog,” Shierholz said, noting that the recession of 2007-2009 was the harshest downturn since the 1930s Great Depression.
AP June 11, 2014 -
Government payrolls have shrunk, taking middle class pay with them. Local school districts have 255,400 fewer employees. The U.S. Postal Service has shed 194,700 employees.
And during the economic recovery, more people have left the job market than entered it. Just 58.9 percent of working-age Americans have jobs, down from 62.7 percent at the start of the recession.
Some of that decline comes from an aging country in which more people are retiring. But the share of working adults among the overall population is “still bouncing around at the bottom where it was during the worst of the recession” — evidence that meaningful wage gains across the economy are unlikely, O’Keefe said.
The recovery hasn’t kept up with the expanding U.S. population. Researchers at the liberal Economic Policy Institute estimate that 7 million more jobs would have been needed to keep up with population growth.
The News-Gazette June 11, 2014 -
Despite what the Wall Street Journal says, the tide stopped rising for the average worker in 1970. (Economic Policy Institute, updated by WCEG)
Moore and Vedder also assume, for some reason, that blue states invariably have liberal economic policies. One wonders where they get that idea. For example, California may be blue, but until very recently economic policymaking in Sacramento was hamstrung by the strong veto held by conservative Republicans in the Legislature.Finally, Price contradicts their assertion that “John F. Kennedy had it right that a rising tide lifts all boats.” This may have been correct when Kennedy said it, but it changed shortly after his presidency. As is shown by the chart above, first compiled by the Economic Policy Institute and updated and reproduced by Price, average wages started diverging from productivity gains in 1970. The gap has grown inexorably in the four decades since.
Los Angeles Times June 11, 2014 -
One newly trained butler was hired last year in the United Arab Emirates for $158,000, the BBC reports. That alone would place the butler in the top 8 percent of earners in the U.S., although of course that’s a mere pittance to the top .01 percent, who have a net worth of $100 million.
And the top 1 percent — as well as the top .1 percent and top .01 percent — have seen their wealth grow by staggering leaps. From 1979 to 2007, the top 1 percent took in over half of the total increase in U.S. income, according to the Economic Policy Institute. Worldwide, the number of millionaires rose to a record 12 million people in 2012, a jump of more than 9 percent, according to the World Wealth Report.
CBS Moneywatch June 11, 2014 -
The soft economy has forced many economists to reduce their yield forecasts.
Paul Dales, senior U.S. economist at Capital Economics, a research firm, says wage gains will pick up this year and bond yields will move higher.
But even he has cut his forecast for the 10-year yield to 3 percent at year end, from the 3.25 percent he forecast earlier. If he is right, that would leave the yield unchanged for the full year. Next year, he thinks the 10-year yield will edge up to just 3.5 percent, and he considers himself above the consensus.
Economists were pleased that the economy created 217,000 jobs in May. That sent U.S. payrolls to a record high. It was the first time since the late-1990s boom that the economy created more than 200,000 jobs a month for four consecutive months.
Nice as that was, job gains didn’t keep up with population growth. The economy would need to create 7 million more jobs to account for the increase in working-age people since 2008, according to the Economic Policy Institute, a Washington think tank supported by labor unions.
MSN Money June 11, 2014 -
Economists are somewhat divided over the broader impact of raising the overtime floor, a proposal that the Labor Department is still hammering out. Once they come up with their recommendations on how to make overtime pay available to more workers, the business community will have an opportunity to weigh in during a 90-day public-comment period.
Ross Eisenbrey, vice president of the Economic Policy Institute, a nonpartisan think tank in Washington, D.C., recommended in November that the floor be raised to $984 a week, or nearly $25 an hour—a change that he says could help as many as five million salaried employees.
Yet Dean Baker, an economist with the Center for Economic and Policy Research in Washington says that even if the threshold were raised as high as $20 per hour, just a few hundred thousand workers would be newly eligible for overtime. “This has been hugely overblown, the impact is likely to be relatively limited,” Mr. Baker adds.
Wall Street Journal June 11, 2014