Saturday, September 21, 2013

Amerisclerosis — and Poverty

From James Pethokoukis, "The Age of Amerisclerosis: Are jobless recoveries here to stay?"

Amerisclerosis photo 092013jobless1-600x346_zps6c22dd7b.jpg
It’s not just Obamanomics. The US is stuck in its third-straight “jobless recovery,” just like after the 1990 and 2001 recessions. And new research suggests this “persistence of unemployment” could mean future US recessions and recoveries will continue to resemble Europe’s 1980s downturn. Even after growth recovered, hiring didn’t. That’s when “Eurosclerosis” was coined.

Now get ready for Amerisclerosis. US labor markets used to rebound much faster. After the 1981-82 downturn, the jobless rate was back to normal in 18 months. More than four years after the Great Recession’s official end, however, the unemployment rate is only halfway back to where it was in 2007. And even this slow rate of recovery overstates the job market’s true health given the accompanying decline in the labor force participation rate.
The trends aren't new, although I wouldn't discount "Obamanomics" for exacerbating them.

The U.S. might have had a Reagan-esque recovery had the U.S. focused on job creation this last five years, rather than social redistribution, "universal" health care, and blame-the-rich demonization politics. The economy is primed for a surge of growth. Government policy is not only holding it back, but it's keeping people poor. As the New York Times highlighted earlier this week, "Median Income and Poverty Rate Hold Steady, Census Bureau Finds":
The government’s authoritative annual report on incomes, poverty and health insurance, released Tuesday, underscores that the economic recovery has largely failed to reach the poor and the middle class, even as the unemployment rate continues to sink and growth has returned.

Government programs remain a lifeline for millions. Unemployment insurance, whose eligibility the federal government expanded in response to the downturn, kept 1.7 million people out of poverty last year. Food stamps, if counted as income, would have kept out four million.

Since the recession ended in 2009, income gains have accrued almost entirely to the top earners, the Census Bureau found. The top 5 percent of earners — households making more than about $191,000 a year — have recovered their losses and earned about as much in 2012 as they did before the recession. But those in the bottom 80 percent of the income distribution are generally making considerably less than they had been, hit by high rates of unemployment and nonexistent wage growth.

Moreover, economists believe that the report understates the degree of income inequality in the United States, by not including, among other things, earnings from capital gains made on rising stock prices.

In one glimmer of improvement, the number of men working full time year-round with earnings increased by one million from 2011 to 2012, to a total of 59 million. Still, the labor market continues to look weak, in particular for less-educated and lower-income men. The labor force participation rate of men has fallen steadily for the past 60 years. In no small part, that is because the median earnings of men working full time have not increased in real terms since the early 1970s.

For women, the earnings stall started about a decade ago, when the gender pay gap stopped closing. “The wage gap hasn’t budged a penny,” said Fatima Goss Graves of the National Women’s Law Center. “After 11 years of no progress on equal pay, policy makers need to get moving to improve the country’s pay discrimination laws, raise the minimum wage and remove the barriers women face in higher-wage jobs.”

The West was the only region that experienced a statistically significant increase in median income, the Census Bureau said, while all other regions were flat. That most likely reflects the relatively strong growth in Washington, Oregon, California and Utah last year. North Dakota, experiencing an oil and gas boom, is the fastest-growing state, though its population is so small that it barely affects the national statistics.

No racial or ethnic group experienced significant changes in income, but that left the gap between Asians, at the top, and blacks, at the bottom, as wide as before. The median income for Asian households was $68,600. For non-Hispanic whites, it was about $57,000, while the typical Hispanic household had an income of $39,000, and blacks were at $33,300.

The poverty rate held steady at about 15 percent in 2012, about 2.5 percentage points higher than before the recession began. Neither the number nor the proportion of people living in poverty changed from 2011 to 2012, the Census Bureau found.
Obama's crony capitalism is keeping higher income households above the heap, while his corrupt socialist redistributionism has actually done nothing but expand the size of government at the expense of individual upward mobility at the lower quartiles. In a word: Abomination.