December 02, 2009
December 3, 2009
Labor market less than a third of the way through the Great Recession.
For Immediate Release: December 3, 2009
Contact: Alan Barber, (202) 293-5380 x115
Washington, D.C.- Despite growing economic optimism in some quarters, a new report by the Center for Economic and Policy Research (CEPR) shows that the economy is still far from full recovery.
“From the standpoint of jobs – the economic variable that most concerns Americans – we are not even one third of the way through the recession,” said John Schmitt, a senior economist at CEPR and an author of the new study. “Unemployment will cost workers more in terms of lost wages and salaries in 2010 and 2011 than they have this year.”
The report, “The $1 Trillion Wage Deficit,” estimates the earnings loss of Americans from the beginning of the recession through 2012. The findings show that U.S. workers will lose a total of over $1 trillion in wages and salaries as a result of the Great Recession and the economy will continue to shed hundreds of thousands of jobs over the next three years under current policy.
“To put this into context,” continued Schmitt, “the total cost of the recession in terms of lost wages is substantially higher than the estimated ten-year cost of current health care reform.”
The study uses recent data from the Bureau of Labor Statistics (BLS) and projections from the Congressional Budget Office (CBO) on economic performance through 2012.
The analysis shows lost wages and salaries 25 percent higher in 2010 ($310 billion) than in 2009 ($247 billion). In 2011, losses will be $252 billion, higher than losses for 2009. And three years from now in 2012, losses will still be three times higher, at $147 billion, than they were in 2008, the first full year of the recession.
African Americans and Latinos will be especially hard hit, with the recession causing them wage losses of $142 billion and $138 billion, respectively.
The report‘s costs estimates do not include the cost of lost health insurance or pension coverage, lost earnings from reductions in hours for workers who keep their jobs, or any cuts stemming from belt-tightening pressures in the workplace because of the recession.
