September Job Report Doesn't Address Wage and Wealth Losses

Oct 9, 2012— -- Even as the latest job report showed improvements to the labor market through increased job creation and a drop in unemployment, economists worry about shifts that continue to squeeze workers' wages --especially low-income and minority workers.

"We're in a goddamn recession and it's hurting people," said Lawrence Mishel, president of the Economic Policy Institute.

Although technically our economy is no longer in a recession and is growing slowly, Mishel says the labor market is still dealing with its lasting and permanent impact.

"The weight of unemployment depresses wage and benefit growth for everybody. That has a much greater impact on low-income households and minorities," said Mishel.

National unemployment is now below 8 percent – a longtime talking point for Republicans. While the Hispanic unemployment number has improved, at 9.9 percent, it still remains high -- though lower than for African Americans (13.4 percent).

Lower-paid workers are especially vulnerable. The implosion of the housing market greatly affected Hispanics who were heavily represented in construction.

Since 2007, Hispanic men seem to have suffered the largest wage declines among men, according to a "The State of Working America," a book by the Economic Policy Institute. It says Hispanic men and women saw the least wage growth, too.

Beyond unemployment is the question of underemployment, workers who -- for example -- can only find part-time work. In 2007, Hispanic underemployment was about 10 percent, almost double that of whites. The recession brought Hispanic underemployment to about 25 percent. Even as the recession has ended and job numbers are improving, underemployment among Hispanics and African Americans remains high.

"You could say minorities are in a permanent recession," said Mishel.

Even before the latest economic downturn, economists noted how the previous recession at the beginning of the millennium stalled wage and wealth growth for almost a decade -- even as productivity continued to quickly grow. This became known as the "lost decade." The current economic downturn has now brought incomes down 7 percent to where they were in the mid-90's.

The unemployment rate is slowly inching toward pre-recession levels, at 7.8 percent. And yet considering the causes of the crisis -- housing collapse, financial collapse, in addition to continued cuts to public sector jobs -- Mishel says this recovery is still better than past recoveries.