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More than 400,000 jobs were lost in the first half of 2008 as the unemployment rate jumped to 5.7 percent in July, its highest rate in more than four years.
Economists expect unemployment to reach 6.4 percent by year's end.
Think of it as economics with a low-carb twist: Workers are baking a bigger pie, yet their own slices are cut thinner.
That's the conclusion of The State of Working America (SWA) 2008-2009, released in August by the Economic Policy Institute (EPI), a nonprofit, nonpartisan think tank based in Washington.
Despite high productivity — and the policy-makers' mantra that "as grows productivity so shall living standards improve" — the real story is American workers are finding paychecks frozen, health coverage cut back, jobs at risk of being shipped overseas and pensions more precarious than ever.
The SWA 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. In this 11th edition, EPI economists Lawrence Mishel, Jared Bernstein and Heidi Shierholz update and expand 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.
"If job growth from 2000 to 2007 had matched the 1990s cycle, the economy would have added 7 million more jobs than it did," co-author Shierholz said. "Now that jobs are falling again, the U.S. job market is sailing into a new storm in a boat that's already leaking."
In their economic review, three dominant factors emerged:
• Weak jobs growth.
• Stagnant or falling real household income for most families.
• Increasingly unequal distribution of the benefits of economic growth.
Not surprisingly, the rich got richer, with the top 10 percent of the income ladder reaping the lion's share of the rewards of economic growth.
"While most Americans were losing ground, the good times were rolling among the top 10 percent," said co-author Mishel. "We're seeing a massive, unprecedented income redistribution from the bottom 90 percent of Americans to the top 10 percent, and especially to the top 1 percent."
Compounding these bad-news data are other factors adding to the pressures on already-reduced family budgets, including the rapid rise in gas prices, and turmoil in the mortgage industry and housing market, driving down values and driving up foreclosures.
"Americans do not object to unequal outcomes if they mean that some people are working harder and smarter, but we do object if the deck is being stacked by unequal opportunities," said co-author Bernstein.
As the authors say, the graphs and tables in their book paint a portrait of working America, "from the despairing families left behind in ways that will painfully reverberate for generations, to the prodigious efforts of those who keep the biggest and richest economy in the world moving forward."
For more information, visit EPI's Web site at epi.org.