The “Transparency In Visa Reporting To Protect American Jobs And Prevent Human Trafficking Act” seeks to protect foreign workers, here in the United States on temporary, legal work visas, from exploitation by dishonest employers who lure with the promise of a decent job and subsequently coerce them into unbearable conditions, such as sex trade or domestic servitude.

The Department of Justice and FBI reported over 1,200 human trafficking investigations in 2011. There are likely many more victims since this is a widely underreported crime.

WHO: Congresswoman Lois Frankel

Congressman Ted Deutch

Congressman Jim Himes

Representatives from the Economic Policy Institute & Global Workers Justice Alliance

WHAT:           Conference Call – Combatting Human Trafficking

WHERE:         Call in number provided upon RSVP

WHEN:           Thursday, July 24, 2014

1:00 – 1:30 pm EST

Poverty

• 15.0%: The share of the population in poverty in 2011
• 21.9%: The percent of children under 18 in poverty
• 46.2 million: The number of people in poverty in 2011
• $22,811: The poverty threshold for a family of four with two children
• 44.0%: The share of the poor population in “deep poverty,” or below half the poverty line
• 2.3 million: The number of people unemployment insurance kept out of poverty in 2011
• 21.4 million: The number of people Social Security kept out of poverty in 2011
• 5.7 million: How many fewer people would be in poverty if the Federal Earned Income Tax Credit was included in the Census definition of money income
• 3.9 million: How many fewer people would be in poverty if food stamps (SNAP) were added to money income

Income

• -1.7%, +5.1%: The change in average household income between 2010 and 2011 for the middle 20 percent, and the top 5 percent, respectively. The disparity means income inequality increased in 2011.
• $7,887, -12.4%: The decline in median working-age household income from 2000 to 2011 in level terms and percentage terms, respectively
• $6,518, -16.8%: The decline in median African-American household income from 2000 to 2011 in level terms and percentage terms, respectively
• $4,695, -10.8%: The decline in median Hispanic household income from 2000 to 2011 in level terms and percentage terms, respectively
• $50,622, $48,202:  Median earnings for a man working fulltime, full year in 1973 and 2011, respectively
• $28,699, $37,118:  Median earnings for a female working fulltime, full year in 1973 and 2011, respectively

Health insurance coverage

• 47.9  million: The number of people under 65 without any health insurance in 2011, down from 49.2 million in 2010
• 14.2 million: The decline in the number of people under 65 with employer-sponsored health insurance from 2000–2011
• 10.8 percentage points: The decline in the share of the under 65 population with employer-sponsored health insurance from 2000–2011
• 25 million: The increase in the number of people under 65 on government insurance (e.g., Medicare, Medicaid) from 2000 to 2011. Government insurance accounts for the increase in overall coverage from 2010 to 2011.
• 2.2 percentage points: The decline in the uninsured rate for persons aged 19–25 from 2010 to 2011, far higher than any other age group, likely due to the ACA provision to allow young adults to secure coverage through their parents’ employer-sponsored insurance policies.

For a comprehensive examination of how we got to where we are today, including additional details on income, poverty, economic mobility, wages, jobs, and wealth, see EPI’s The State of Working America, 12th Edition, released yesterday.

—With research assistance from Nicholas Finio, Natalie Sabadish and Hilary Wething

Research released today by the University of California, Berkeley’s Center for Labor Research and Education and Center for Wage and Employment Dynamics shows that the Great Recession and the bursting of the housing bubble caused state budget deficits, not public sector workers or their unions.

FROM THE BLOG: Persistent and acute state budget deficits? It’s (still) the economy

EPI invited journalists to join a national press conference call with Sylvia Allegretto, Ken Jacobs and Laurel Lucia, the authors of The Wrong Target: Public Sector Unions and State Budget Deficits. Listen to the press call here.

The 2010 poverty and income data released yesterday morning by the U.S. Census Bureau are yet another reminder of the continued weight of the Great Recession on families in the United States. The Great Recession officially ended in the summer of 2009, but the labor market continued deteriorating through the end of 2009, and the modest economic growth in 2010 was not enough to compensate for those losses.  From 2009 to 2010, the number of jobs fell by 658,000, the unemployment rate increased from 9.3 percent to 9.6 percent, and the share of unemployed workers who had been unemployed for more than six months climbed from 31.2 percent to 43.3 percent. Thanks to this deterioration in the labor market, incomes dropped and poverty rose.

AUDIO: Listen to EPI’s press call about the 2010 report

Key findings from the Census Bureau’s report

Poverty

• The poverty rate increased from 14.3 percent in 2009 to 15.1 percent in 2010, representing an additional 2.6 million people living in poverty and bringing the total number of people in poverty in the United States to 46.2 million.
• The poverty rate for children was 22.0 percent in 2010, representing 16.4 million kids living in poverty. In 2010, more than one-third (35.5 percent) of all people living in poverty were children.
• The poverty rate for working-age people (18- to 64- year-olds) hit 13.7 percent in 2010, the highest rate since the series began in 1966. Poverty among the elderly (age 65 and older) poverty was statistically unchanged over the year.
• The poor are getting even poorer. In 2010, the share of the population below half of the poverty line hit a record high of 6.7 percent.
• Nearly one in 10 children (9.9 percent) fell below half of the poverty line in 2010, up from 9.3 percent in 2009.
• Non-Hispanic whites maintained far lower poverty rates than any other racial/ethnic group. Blacks were particularly hard-hit by increases in poverty from 2009 to 2010, increasing 1.6 percentage points to reach a rate of 27.4 percent.
• In 2010, over one-third of black children (39.1 percent) and Hispanic children (35.0 percent) were living in poverty. The poverty rate for families with children headed by single mothers hit 40.7 percent in 2010. Of the 7.0 million families living in poverty in 2010, 4.1 million of them were headed by a single mom.

Income

• Between 2000 and 2010, median income for working-age households fell from $61,574 to $55,276, a decline of roughly $6,300, which is more than 10 percent.
• Disparities in incomes among racial and ethnic subgroups grew in 2010, as racial and ethnic minorities experienced particularly large declines in income. The  black household earning the median income is now bringing in $5,494 less than the median black household did 10 years ago (a drop of 14.6 percent) and the median Hispanic household is now bringing in $4,235 less than the median Hispanic household did 10 years ago (a drop of 10.1 percent).
• There were losses across the income distribution in 2010, particularly at the very bottom and the very top. In 2010, incomes of families in the middle fifth of the income distribution fell 0.9 percent, for a total decline of 6.6 percent since 2007. Families at the low end of the scale were hit harder, with the bottom fifth losing 3.5 percent in 2010 and 11.3 percent from 2007 to 2010. The top fifth lost 2.7 percent in 2010, but since their losses in the prior two years were modest, the total decline from 2007 to 2010 was a relatively modest 4.5 percent.  
• The median, or typical,  inflation-adjusted earnings of men working full-time year-round fell slightly from $47,905 in 2009 to $47,715 in 2010, while the median earnings of full-time year-round female workers stayed essentially flat, at $36,877 in 2009 and $36,931 in 2010.
  

A quick comment on the effect of ARRA

How did the American Recovery and Reinvestment Act of 2009 (ARRA) affect the 2010 poverty and income numbers? Because ARRA was passed in February and was in the process of ramping up through the end of 2009, its full impact was felt in 2010.  ARRA primarily affected these numbers by creating and saving jobs, the earnings from which otherwise would not have been there supporting family incomes. The Congressional Budget Office estimates that the Recovery Act created or saved around one million full-time equivalent jobs in 2009, and 3.4 million jobs in 2010. Without these jobs, the decline in income and increase in poverty would have been much more dramatic. In other words, the new Census Bureau report is ugly, but without ARRA, it would have been much uglier. This underscores the growing impact of the end of ARRA—in the current quarter, ARRA is supporting only 2.3 million full-time equivalent jobs, and the number of jobs supported drops to half a million by the fourth quarter of 2012. This means that the loss of the boost from government action is—and without additional intervention will continue to be—a substantial drag on jobs and family income.

What about the direct income supports in ARRA? Of three major income supports in the stimulus—unemployment insurance, nutritional assistance (food stamps), and tax cuts—only unemployment insurance is counted in the income numbers just released; the income numbers include cash income received from programs such as unemployment insurance, but exclude noncash benefits like food stamps, and are measured before payments of taxes, so they do not reflect reductions in taxes. While unemployment insurance benefits replace a maximum of half of a worker’s prior earnings, these benefits went to workers who were laid off and who had low odds of quickly finding another job (in 2010, there were 5.3 unemployed workers per job opening on average). In other words, these unemployment benefits went to families that otherwise would likely have suffered even steeper income declines, and in some cases dropped below the poverty line. Census data show that 3.2 million people were kept out of poverty in 2010 by unemployment insurance benefits alone.

Poverty:  Record highs

Between 2009 and 2010, an additional ­­­­­­2.6 million people slipped below the poverty line, as the poverty rate increased from 14.3 percent to 15.1 percent. The rate represents 46.2 million people living in poverty in the United States. The last time the poverty rate was higher was in 1983, when it was 15.2 percent (as shown in Figure A).

The poverty rate for children in 2010 was 22.0 percent, higher than the overall rate and up more (1.3 percentage-points) than the overall poverty rate, which increased 0.8 percentage points from 2009 to 2010. The 2010 “children’s poverty rate” represents 16.4 million kids living in poverty. In 2010, more than a third—35.5 percent— of all people living in poverty were children.

Nearly all of the decline in poverty achieved during the business cycle of the 1990s has now been reversed. From 1989 to 2000, overall poverty declined by 1.5 percentage points, and child poverty dropped by 3.4 percentage points. From 2000 to 2010, however, poverty increased overall by 3.8 percentage points, and by 5.8 percentage points among children. The large increase in poverty suggests that as anti-poverty policies have come to depend more on paid work as the main pathway out of poverty, the safety net has become less effective in reducing economic hardship when the economy and job market are underperforming.

The poverty rate for working-age people, those 18-64 years old, increased by 0.7 percentage points, from 12.9 percent in 2009 to 13.7 percent 2010,  the highest rate since the series began in 1966 (Figure B). Over the same five decades, the poverty rate for persons older than 65 dropped precipitously, due in part to Social Security payments, which have effectively lifted millions of elderly Americans out of poverty. In 2010, the elderly poverty rate, 9.0 percent, was statistically unchanged from 2009.

Figure C displays the share of the population falling below half of the poverty line from 1975–2010. In 2010, 50 percent of the poverty line for a two-adult two-child family was $11,057. This measure tracks the depth of poverty, those living on half the subsistence rate. In 2010, 6.7 percent of people were living below half of the poverty line, up 0.4 percentage points since 2009—a record high share of the population in deep poverty since the Census Bureau began tracking this statistic in 1975. Not shown in the figure but alarming: Nearly one in 10 children (9.9 percent) were below half the poverty line in 2010, up from 9.3 percent in 2009.

As shown in Figure D, poverty rates and changes in those rates have varied across racial and ethnic groups. Non-Hispanic whites experienced the lowest rate of poverty at 9.9 percent, while the rates for blacks and Hispanics were more than two-and-a-half times higher at 27.4 percent and 26.6 percent, respectively. Poverty rates also increased more between 2009 and 2010 for blacks and Hispanics than for other groups.

The 2000s have all but erased any gains to reducing poverty in the 1990s. This recession has only exacerbated the damaging trends over the last decade, leaving some of the most vulnerable populations with large shares living below the poverty line. Figure E shows changes over time in poverty rates for particularly vulnerable populations—children, racial and ethnic minority children, and single-mother families. From 2000 to 2010, black children experienced a 7.9 percentage-point increase in poverty, reaching 39.1 percent. Hispanic children experienced an increase of 6.6 percentage points over the same period, reaching 35.0 percent.

For families headed by single mothers, there was a 7.7 percentage point jump from 2000 to 2010 to 40.7 percent. In 2010, 4.1 million of the 7.0 million families living in poverty were headed by single moms.

Income:  Another lost year in a lost decade

From 2009 to 2010, median household income, adjusted for inflation, fell from $50,599 to $49,445, a decline of $1,154, or 2.3 percent. Working-age households—those with a head of household younger than 65 years old—experienced even larger declines because they are most exposed to the labor market and therefore most likely to be affected when the labor market deteriorates. The median income of working-age households fell from $56,742 in 2009 to $55,276 in 2010, a decline of $1,466, or 2.6 percent.

Figure F shows real median income over the last three decades for all households and, starting in 1994 when the data became available, for working-age households. A key point here is the comparison between business cycles. From 1979 to 1989, real median income grew $3,002 (from $46,074 to $49,076); from 1989-2000, it grew $4,088, (from $49,076 to $53,164). But for the first time on record, over the business cycle from 2000-07, incomes did not rise, but fell slightly, from $53,164 to $52,823. And with the weak labor market over this period, the real median income of working-age households fell significantly, from $61,574 to $59,460. This means that working families are weathering the current economic downturn on the heels of one of the worst economic expansions on record.

These figures show that 2010 was but another year of income declines in a decade of declines: From 2000 to 2010, median income for working-age households fell from $61,574 to $55,276, a decline of roughly $6,300, which is more than 10 percent.

Disparities in incomes among racial and ethnic subgroups grew in 2010, as racial and ethnic minorities experienced particularly large income declines, with African Americans getting hit the hardest. Figure G shows real median household income for racial and ethnic subgroups over the last two decades. The median income of non-Hispanic whites declined by 1.3 percent in 2010 and has declined by 5.4 percent since the start of the recession in 2007 . (In dollar terms, it fell from $57,752 to $54,620 over this period). The median African American household experienced a decline of 3.2 percent in 2010 and a total decline of 10.1 percent since 2007 (falling from $35,665 to $32,068). The median Hispanic household experienced a decline of 2.3 percent in 2010 and a total decline of 7.2 percent since 2007 (falling from $40,673 to $37,759).

The Great Recession and its aftermath have wiped out all improvements in median black income since 1996, all improvements in median Hispanic income since 1998, and all improvements in median white income since 1997. The median black household is now bringing in $5,494 less than it did 10 years ago (a drop of  14.6 percent) and the median Hispanic household is now bringing in $4,235 less than it did 10 years ago (a drop of 10.1 percent).

There were losses across the income distribution in 2010, particularly at the very bottom and the very top (see Figure H). In 2010, incomes of families in the middle fifth of the income distribution fell 0.9 percent, for a total decline of 6.6 percent since 2007.  Families at the low end of the scale were hit harder, with the bottom fifth losing 3.5 percent in 2010 and 11.3 percent from 2007 to 2010.  The top fifth lost 2.7 percent in 2010, but since their losses in the prior two years were modest, the net change from 2007 to 2010 was a relatively modest 4.5 percent. The rise in inequality over the last three years compounds thirty years of increasing inequality. Furthermore, with unemployment expected to remain high for years to come, inequality is likely to increase because weak labor markets have a larger negative impact on income at the middle and low end of the income distribution.

Particularly astonishing over the last three years has been the drop in the number of earners working full-time (35 hours or more per week) and full-year (at least 50 weeks, including paid time off).  Between 2007 and 2010, there was a 9.4 million decline in the number of people with full-time, full-year employment and a 3.9 million increase in the number of people with part-time and/or part-year jobs.

As Table 1 shows, a disproportionate share of the erosion in full-time, full-year work over this period was among men—the number of men working full-time, full-year dropped by about 6.6 million between 2007 and 2010, while there was a 2.8 million drop in the number of women working full-time, full-year.  However, focusing just on the change from 2009 to 2010, the gender dynamics were reversed, with a 754,000 decline in total employment among men and an 854,000 decline among women. Furthermore, losses were larger among part-time and/or part-year workers in 2010 than among full-time full-year workers, both male and female. Although it is not depicted in the table, the number of “involuntarily part-time workers”—workers who work part-time but want a full-time job (from the Census Bureau’s Current Population Survey)—was virtually unchanged from 2009 to 2010, after increasing  by 4.5 million between 2007 and 2009.

In 2010, the median male working full-time, full-year experienced a slight drop in real earnings  of 0.4 percent, from $47,905 to $47,715, while the median female working full-time, full-year experienced very little change, with an increase of 0.1 percent, from $36,877 to $36,931 (see Figure I). The persistent high unemployment dampens earnings growth even for those who have full-time, year-round employment. Looking from 2007 to 2010, the shift from full-time, full-year employment to part-time and/or part-year employment contributed to the overall drop in median earnings: The annual inflation-adjusted earnings for the median male worker dropped from $38,524 to $36,676 between 2007 and 2010, and for the female median worker from $27,212 to $26,552.

Conclusion

The new data on income and poverty underscore the real, human consequences of the economic downturn. The labor market is the core building block of family incomes—when the labor market falters and people lose work, hours, and wages, family incomes drop and poverty rises. The Census Bureau’s report shows that much of the income and anti-poverty gains made in the 1990s have been more than erased due to both the weak business cycle from 2000-07 and the lasting effects of the Great Recession. While the Recovery Act stemmed the losses from the Great Recession, it was never big enough to right the economic ship given the scale of the crisis. With unemployment expected to stay above 8 percent well into 2014, it is time for Congress to once again act boldly to create jobs so that America’s residents have the work they need to provide for their families. The jobs plan that President Obama announced last week takes an important step in the direction of a solution that matches the scale of the ongoing crisis. For more on what we can and should be pursuing to generate jobs, see EPI’s Putting America Back to Work.

Research assistance by Nicholas Finio and Hilary Wething

AUDIO: Listen to EPI’s press call about the 2010 report

While the Great Recession officially ended in the summer of 2009, the labor market continued to deteriorate into 2010.  The unemployment rate increased from 9.3 percent in 2009 to 9.6 percent in 2010, and long-term unemployment (the unemployed without a job for 27 weeks or more) grew from 31.2 percent in 2009 to 43.3 percent in 2010.  As most Americans, particularly those under age 65, rely on health insurance through the workplace, these unemployment trends make it no surprise that employer-sponsored health insurance continued to fall from 2009 to 2010.  But the situation started deteriorating long before the Great Recession: Employment-based coverage for those under 65 eroded in nine of the past 10 years, including a 0.7 percentage point drop from 59.4 percent in 2009 to 58.6 percent in 2010.

Because all Americans age 65 and older have near-universal access to health insurance coverage through Medicare, this report focuses exclusively on coverage rates for the under-65 population.  This report’s highlights are:

• In 2010, 49.1 million people under 65 were uninsured, up about three-quarters of a million people since 2009. The number of uninsured non-elderly Americans is 12.9 million higher than it was in 2000.
• The share of non-elderly Americans with employer-sponsored health insurance declined for nearly 10 years in a row, down from 59.4 percent in 2009 to 58.6 percent in 2010, a total decline of 10.5 percentage points since 2000.
• The only reason why the drop in employer-sponsored insurance (ESI) did not translate into a large increase in the total share uninsured is because 1.3 million more people under 65 were covered by Medicaid/SCHIP in 2010.
• Critical provisions in the Patient Protection and Affordable Care Act (also known as health reform) and the Recovery Act of 2009 helped offset the declines by insuring young adults on parent’s health insurance policies and by helping to shore up Medicaid funding.

Overall coverage trends, 2009-10

Employer-sponsored health insurance remains the predominant form of coverage for those under 65 years old. In 2010, however, the rate of coverage fell over the year (as shown in Figure A). Non-group coverage (individually purchased private insurance) increased slightly from 2009 to 2010, while public coverage rose significantly from 21.5 percent to 21.9 percent. Despite the decline in ESI coverage, this increase in the percent of Americans covered by public insurance has kept the total share without insurance from rising even faster in 2010.

A closer look at employer-sponsored insurance coverage declines

The Census report suggests evidence of further unraveling of the employer-based coverage system, as the share of persons covered through work (either their own or a family member’s employer) declined for nearly the tenth year in a row. According to the revised health insurance data, in only one year (2005) did employer-sponsored insurance rise (and then only 0.1 percentage points).

As shown in Figure B, ESI covered 58.6 percent of people under age 65 in 2010, down from 59.4 percent in 2009, and a total decline of 10.5 percentage points since 2000.

Figure C illustrates the incidence of employer-sponsored health insurance across various age groups from 2000 to 2010.  Prime working-age adults (25-54) consistently have the highest workplace coverage rates, while young adults (18-24) have the lowest.  Losses were in excess of 10 percentage points over the decade for all groups except the near elderly and young adults.  Those aged 55 to 64 have continued to have high and rising labor force participation rates, leading to lower declines in employer-sponsored insurance for this group. For young adults, health reform played a key role in stemming the fall of workplace coverage, though the decline was still substantial.

The Patient Protection and Affordable Care Act included provisions that allowed young adults up to age 26 to secure health insurance coverage through their parents’ employer-sponsored health insurance policies. Between 2009 and 2010, the only age group that experienced statistically significant increases in overall coverage was 18-24 year olds.  Their uninsured rate fell a significant 2.0 percentage points.  While the number of uninsured people under 65 rose by over three-quarters of a million, the number of uninsured between 18 and 24 years old actually fell half a million.

ESI coverage for children continued its unabated decline, falling again between 2009 and 2010, from 55.8 percent to 54.8 percent. The coverage of children through the employment-based system has fallen 11.9 percentage points since 2000. The total share of uninsured children did not statistically change over the last year, however, as their Medicaid/SCHIP rates continued to rise, increasing from 33.8 percent in 2009 to 34.8 percent in 2010.

Over the decade, it is clear how public insurance has shielded children from the declines in employer-sponsored insurance.  As shown in Figure D, the percent of children with employer-sponsored health insurance dropped 11.9 percentage points from 2000 to 2010, while the percent with public insurance rose 13.7 percent (primarily due to Medicaid/SCHIP), ultimately leaving fewer children uninsured. In part, the security of the safety net was protected from significant cuts by the federal government’s Recovery Act aid to states.

The Recovery Act of 2009 included significant state aid that lessened the need for states to make cuts to services and spending, or increases in state and local taxes.  A large percentage of the state aid was in the form of increased Medicaid funding to reduce the extent and severity of cuts to that program. While it is impossible to know what would have occurred had states not received Recovery Act funds, it is clear that those funds did help maintain and increase Medicaid coverage.

Non-elderly adults have not been so fortunate. The 18-to-64-year-old population experienced a statistically significant increase of 13.3 million more uninsured adults from 2000 to 2010.

Conclusion

The data released September 13, 2011 by the U.S. Census Bureau highlight the fact that the current system does not provide stable and secure coverage for many Americans. The share of Americans under age 65 with employment-based health coverage fell for nine out of the last 10 years, dropping from 69.2 percent in 2000 to 58.6 percent in 2010. The percent of uninsured Americans under age 65 rose from 14.7 percent in 2000 to 18.4 percent in 2010. The declining share of Americans with employer-sponsored health insurance and the associated rise in the total uninsured over the 2000s are trends that will worsen in the near future.  Fortunately, the phase-in of the Patient Protection and Affordable Care Act over the next few years should eventually stem any additional losses and reverse the current trend, covering millions more Americans.

Research assistance by Nicholas Finio

1. The real gap in the labor market is now around 11 million jobs.
2. Job growth this recovery outpaces that following the 2001 recession, but is still too slow.
3. The loss of public-sector jobs is a huge obstacle to growth in this recovery.
4. Most of the improvement seen this recovery consists of a decline in layoffs, not an increase in hiring.
5. The current problem is not that we lack the right workers, it’s that we lack enough job openings.
6. The share of the working-age population with a job has not yet improved.
7. “Underemployment” has also improved very little in the recovery.
8. Unemployed workers continue to face near-record spells of unemployment.
9. Racial and ethnic minorities have fared worse than whites in both the recession and the recovery.
10. Wage growth remains extremely low.

Details on these 10 facts are provided in the text and figures that follow.

Listen to press call | Click through slideshow

Note: For figures referenced below, please see the PDF version of this paper.

1 The real gap in the labor market is now around 11 million jobs.

The economy currently has 6.9 million fewer jobs than when the recession started. But because the working-age population is naturally increasing all the time, in the three years and five months since the recession started we should have added around 4.1 million jobs to keep pace with population growth. This means the current gap in the labor market is roughly 11 million jobs (Figure 1). To close that gap within three years, we would have to add around 400,000 jobs every single month for 36 months. By comparison, over the last three months we added just 160,000 jobs per month on average. At that rate, it will take well over a decade to get back to the pre-recession unemployment rate. Two years out, this recovery is not yet producing close to the rate of jobs growth needed to dig out of the hole we are in any time soon.

2  Job growth this recovery outpaces that following the 2001 recession, but is still too slow.

Figure 2 shows payroll employment in the Great Recession (labeled 2007) and the prior three recessions (indexed to 100 at the official end of each recession for ease of comparing their respective recoveries). In the 23 months since the official end of the Great Recession, payroll employment has grown by 550,000 jobs.  Twenty-three months after the end of the 2001 recession, payroll employment was down an additional 773,000 jobs. However, as Figure 2 also demonstrates, the length and severity of the Great Recession means that we are in a much deeper hole. In fact, three years and five months from the official start of the Great Recession, we are still down a larger percentage of jobs (5%) as a share of pre-recession employment than at any single point of  these or any other post-WWII recessions.

3 The loss of public-sector jobs is a huge obstacle to growth in this recovery.

The public sector is now shedding around 25,000 jobs per month, largely due to budget cuts at the state and local level. Since the official end of the recession, the public sector has lost 430,000 net jobs, while the private sector has added 980,000 net jobs (Figure 3). In other words, more than 40% of the private-sector job gains in this recovery have been canceled out by job losses in the public sector. And the loss of public-sector spending also hurts the private sector: For each dollar of state and local budget cuts, more than  half of the jobs and economic activity lost are likely to be in the private sector.¹ By comparison, in the 23 months following the end of the 2001 recession, the public sector added 232,000 jobs, while the private sector lost one million jobs. For more on the decline of public-sector jobs in this recovery, see the EPI issue brief, Historically Deep Job Loss, But Not an Unusual Recovery.

4 Most of the improvement seen this recovery consists of a decline in layoffs, not an increase in hiring.

As shown in Figure 4, layoffs spiked dramatically during the recession, but have substantially slowed in the recovery. At this point workers are no more likely to get laid off than they were before the recession started.² That is a very positive sign, but has a flip side in the trend in hiring. We have seen very little improvement in hiring, which is still roughly 25% below its 2007 average. It is extremely good news that at this point people with jobs no longer face an elevated risk of getting laid off, but the nearly 14 million unemployed workers in this country—including all new entrants to the labor market, such as the new crop of graduates this spring—need a pick up in hiring, which has barely gotten off the ground.

5 The current problem is not that we lack the right workers, it’s that we lack enough job openings.

Some have claimed that hiring has not picked up substantially because employers can’t find workers with the needed skills. Figure 5 shows the number of unemployed workers and the number of job openings, by industry. If it were the case that employers couldn’t find the right workers, we would expect some sectors to have more job openings than unemployed workers, or at least to have much more balance, as employers in those sectors struggle to find the workers they need. But there are no major sectors where that is happening. On the contrary, unemployed workers dramatically outnumber job openings in every industry. The data show that the problem in this recovery isn’t a lack of the right workers, but rather an across-the-board lack of job openings.

6 The share of the working-age population with a job has not yet improved.

The fact that layoffs have abated but hiring has improved very little means that unemployment also  has not improved substantially. The unemployment rate, of course, has dropped somewhat: It has fallen from its peak of 10.1% in October 2009 to 9.1% in May 2011. However, an improvement in the unemployment rate is only good news if a larger share of the potential workforce actually finds work, and that is not happening—the entire improvement in the unemployment rate over that period was due to would-be workers deciding to sit out the job search altogether (and thus not be counted among the officially unemployed). Figure 6 shows that the share of the working-age population with a job (also known as the employment-to-population ratio) has not yet  improved. So far in this recovery, we are still treading water near the bottom of a very deep hole.³

7 “Underemployment” has also improved very little in the recovery.

The number of “involuntary” part-time workers (those who want a full-time job but have had to settle for part-time hours) shot up from 4.3 million in the first half of 2007 to 9 million by the spring of 2009. But as Figure 7 shows, this indicator has made very little progress in the recovery. The number of involuntary part-time workers hovered around the 9 million mark until the end of 2010, and has not improved much this year. Importantly, the fact that there has been so little improvement in the number of involuntary part-time workers belies the claim that businesses aren’t hiring because they are wary of the potential burdens of laws like health care or regulatory reform. If businesses had work to be done but were wary of making new hires, then they would ramp up the hours of their existing workers. Instead, the number of involuntary part-time workers now stands at 8.5 million, still up nearly double from the first half of 2007. The number of “marginally attached” workers—those who want a job, are available to work, but have given up actively seeking work so are not counted as officially unemployed—has also seen very little improvement: At the end of the recession there were 2.3 million marginally attached workers, and now there are 2.2 million. In the 23 months since the end of the recession, the total number of un- or underemployed workers has decreased from 26.1 million to 24.6 million, a decline of only 1.5 million.

8 Unemployed workers continue to face near-record spells of unemployment.

The record length and severity of this downturn (as shown in Figure 2) means that it has shattered all records since the Great Depression for length of unemployment spells (Figure 8). The share of unemployed workers who had been jobless for more than six months shot up from 17.6% in the first half of 2007 to 29.3% at the official end of the recession to over 45.6% by the spring of 2010, an all-time record. It has bounced around 45% since then, and is currently 45.1%. The fact that layoffs have abated in the recovery provides little relief to the already unemployed—because hiring has not yet improved substantially, unemployed workers are continuing to remain unemployed for extremely long periods.

9 Racial and ethnic minorities have fared worse than whites in both the recession and the recovery.

During the recession, unemployment rose faster for racial and ethnic minorities, and in the recovery, they have seen less improvement (Figure 9). At the official end of the recession, the unemployment rate for whites was 8.7%, which has declined somewhat to 8.0%. The unemployment rate for Hispanics at the end of the recession was 12.2%, which has declined by a lesser extent, to 11.9%. Black workers have been hit the hardest: At the end of the recession the black unemployment rate was 14.9%, and it has since increased to 16.2%. Black workers in this country have faced an unemployment rate of 15% or more for the last 22 months.

10 Wage growth remains extremely low.

Persistent high unemployment also hurts wage growth for workers with jobs. The reason is
straightforward—employers don’t have to pay substantial wage increases to keep their workers when they know their workers don’t have good outside options. Nominal average hourly wages (i.e., wages not adjusted for inflation) have grown 1.8% over the last year, well below the growth rate of 2.6% at the end of the recession and about half the growth in the period before the recession started (Figure 10). Furthermore, with inflation growing faster on average than wages since the end of the recession, real wages are lower now than they were when the recession ended. The lack of hiring in this recovery hurts not just the unemployed and their families; it also means the paychecks of those with jobs take a substantial hit. Without substantial additional policy interventions to stimulate the economy, it will likely be at least five years before we get back to the pre-recession unemployment rate. This means that wage growth will likely be subdued for a very long time.

Where to go from here

These 10 facts show that, while we have now officially been in a recovery for two years, the labor market has actually made little improvement since the depth of the downturn. Given this situation, it is extremely premature for policymakers to place their focus on deficits instead of jobs. It must be our top priority to do everything we can to stimulate demand and generate jobs. Critical actions would include providing fiscal relief to states; expanding the safety net (which, by getting money into the hands of people who will spend it, stimulates demand and generates jobs); approving additional spending on infrastructure; implementing direct job creation programs in particularly hard-hit communities; supporting work-sharing to avoid layoffs; having the Federal Reserve do more quantitative easing and/or target a somewhat higher inflation rate (e.g., 3-4%) to both reduce real interest rates and erode debt; and lowering the price of the dollar to boost net exports.

Endnotes

1. See “Dire states: State and local budget relief needed to prevent job losses and ensure a robust recovery,” Ethan Pollack, Economic Policy Institute Briefing Paper #252, Washington, D.C.: EPI.
2. The general upward trend in initial unemployment insurance claims since late February is cause for concern that layoffs are again heading in the wrong direction, but so far this has not shown up in the Job Openings and Labor Turnover Survey data used here.
3. The lack of improvement in the employment-to-population ratio is also found among only prime-age workers (workers age 25–54), and therefore it is not, for example, the aging of the workforce that is driving this result; rather it is the lack of hiring.

This claim is wrong. It is important to be clear about the actual root cause of today’s economic problems: the depth and severity of the recession that began in December 2007, the worst since the Great Depression. The pace of private-sector job creation during the economic recovery that began in June 2009 is, in fact, faster than during the previous recovery and in line with the recovery of the early 1990s. The current ongoing decline in government jobs, however, is a historic anomaly.

Of course, the comparatively positive or in-line rate of private-sector job creation should not let today’s policymakers off the hook—the nation’s labor market remains terribly weak and the current slow pace of jobs growth overall will needlessly consign millions of Americans to joblessness for years to come. Effective job creation policies must become a true national priority. 

Listen to Press Call with EPI’s Heidi Shierholz and Josh Bivens

Thiess said that the Great Recession was “not your typical recession,” since it combined a recession with a financial crisis, and left the labor market three years later “in a fundamentally different place than we’d typically find ourselves 36 months out.”

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The economic expansion that took place during much of the last decade officially ended in December 2007. One of the weakest on record, it saw feeble gross domestic product and jobs growth, and was the first business cycle on record during which the median family income failed to rise. The real value of the minimum wage declined for more than half the decade, and the gap between the rich and the poor—or rather the top 1% and the bottom 99%—continued to grow. This historically weak expansion, however, was nothing compared with what was to come. (In fact, the 2000s’ historically lackluster expansion failed to generate the potential cushion a robust expansion would have afforded many families, making the current economic downturn even tougher to weather). The Great Recession, which began in December 2007, officially lasted through June 2009.

Three years after the recession’s beginning we can piece together a comprehensive vision of where we have been, and begin to think about where we are going.