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Friday, June 03, 2011

Whither economic justice?

Not only has the last decade been remarkable for its lack of economic growth, but it's been even worse for the middle class.  The growth of middle class wages over the past ten years has been just 4 percent, total.  That's 1 percentage point less than the period 1929-39 (the Great Depression).

And the economic problems continue for the middle class:
Almost 14 million Americans are jobless, and millions more are stuck with part-time work or jobs that fail to use their skills.
And employment has not really improved since the start of the recession.  Rather, the employment:population ratio has fallen 5 percentage points and has not recovered any ground:

To make matters worse, the social safety net has been eroded significantly compared to earlier recessions, thanks to "welfare reform" in the 1990s.  Rather than move families to work, welfare reform has simply dropped them through the cracks and made the poor poorer by allowing states to shift from cash assistance to the poor to other services.

What else do we know about the economic distress of the middle class?  Well, workers at the bottom are not only struggling to stay employed, but also struggling to maintain their pay.  Service workers at Minnesota grocery chains have seen wages fall 25 percent in recent years.

There are other broader problems for the middle class.  Take these two items from the 20 things everyone should know about inequality (hat tip Economist's View).  One, unions helped maintain private sector wages (and middle class living standards):

And second, upward mobility is declining, putting the American dream further out of reach for many Americans.

Ultimately, unemployment is a political failure, with one major party committed to policies that actively reduce middle class welfare (Republicans) and the other abdicating its commitment and instead focusing on the deficit bogeyman (which is also a political will problem of paying our bills).  While traditional strategies have been employed, if insufficiently (an economic stimulus), Krugman notes that there are a number of other strategies that could be deployed to get Americans back to work.

It's a absolute shame that lawmakers are more focused on the largely fabricated deficit issue rather than the ongoing economic crisis.  JOBS!

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