Fits annecdotally with the macro statistics that showed real GDP up 5.7% in Q4 while unemployment also went up.
Nothing that a full payroll tax holiday in Q3 08 wouldn’t have prevented.
This is not what the administration was hoping for, but it is the result of their policies.
By Ryan McCarthy
Feb. 10 (Huffington Post) —It’s truly been a tale of two unemployment crises.
Though the national unemployment rate dipped slightly in January to 9.7 percent, a new study suggests that not only have low-income workers been the hardest hit by the jobs crisis — but, shockingly, there has been “no labor market recession for America’s affluent.”
The study from Andrew Sum, Ishwar Khatiwada and Sheila Palma at Northeastern University’s Center for Labor Market Studies suggests that the unemployment problem is largely a problem for low-wage workers (hat tip to the Curious Capitalist).
From the study:
At the end of calendar year 2009, as the national economy was recovering from the recession of 2007-2009, workers in different segments of the income distribution clearly found themselves in radically different labor market conditions. A true labor market depression faced those in the bottom two deciles of the income distribution, a deep labor market recession prevailed among those in the middle of the distribution, and close to a full employment environment prevailed at the top. There was no labor market recession for America’s affluent.
At the New York Times, Bob Herbert delved into the study and noted, “The point here is that those in the lower-income groups are in a much, much deeper hole than the general commentary on the recession would lead people to believe.” Here’s more from Herbert:
The highest group, with household incomes of $150,000 or more, had an unemployment rate during that quarter of 3.2 percent. The next highest, with incomes of $100,000 to 149,999, had an unemployment rate of 4 percent.
Contrast those figures with the unemployment rate of the lowest group, which had annual household incomes of $12,499 or less. The unemployment rate of that group during the fourth quarter of last year was a staggering 30.8 percent. That’s more than five points higher than the overall jobless rate at the height of the Depression.
According to the study, approximately 50 percent of households in the bottom decile of American income distribution are underemployed; in the second lowest decile, 37 percent of households can’t find enough work. The authors write: “These extraordinarily high rates of labor underutilization among these two income groups would have to be classified as symbolic of a True Great Depression.”