Unless current trends take an unexpected new direction, this will be the first business cycle ever recorded in which America's middle-class families will end up with less real income-meaning income adjusted for inflation-than they had at the beginning. That's just one piece of the discouraging analysis outlined in The State of Working America 2008/2009, released by the Economic Policy Institute to coincide with Labor Day. The bottom line, according to the authors: Despite surging productivity, Americans suffer from dwindling income, rising inequality, eroding living standards and declining expectations.
Now in its 11th edition, the new report provides a detailed picture of the 2000-2007 business cycle, its impact on America's working people and families, and its implications for the current downturn. EPI economists Lawrence Mishel, Jared Bernstein and Heidi Shierholz have updated and expanded on previous volumes with the latest data and analysis in a new introduction and commentary, plus chapters on jobs, wages, family income and income mobility. Additional chapters on poverty and wealth will follow, along with a new chapter on healthcare, when the full print edition of the book is published in January.
In their review of the current economic picture, five dominant factors emerge: strong growth in productivity; weak growth of jobs; stagnant or falling real household income for most families; increasingly unequal distribution of the benefits of economic growth; and the increasingly rigid economic stratification this inequality produces. The report discusses these factors in their historic context and describes their implications given the downturn now under way.
August 29, 2008