The Center's work on 'Economic Recovery Watch' Issues


Bernstein on Five Years of Economic Recovery

July 15, 2014 at 3:22 pm

CBPP Senior Fellow Jared Bernstein testified today before the Joint Economic Committee on the progress that has been made in repairing the U.S. economy over the first five years of the recovery from the Great Recession.

Bernstein explained:

When markets fail as massively as they did in the late 2000s, quick and forceful action clearly helps offset the damage.  But to stop at stabilization, instead of rebuilding jobs and incomes that were lost over the downturn is a serious policy mistake, one that has proven to be extremely costly to working families. . . . [T]here is time to build on the recent momentum we’ve seen, particularly in the job market.

Bernstein pointed out that while there are many positive attributes to the current recovery, especially in relation to the depth of the previous recession, it is clearly not yet reaching everyone:

  • Thanks in part to countercyclical policies legislated by Congress in 2009, along with aggressive monetary policy by the Federal Reserve, significant progress has been made in repairing the damage done by the uniquely deep recession that began in late 2007.
  • These gains, while incomplete, are evident in the job market, particularly in the recent acceleration in job growth and decline in unemployment.  After 52 consecutive months of net private sector job growth, non-government employment is up 9.7 million jobs since early 2010.
  • Moreover, employment growth has accelerated in recent months.  Payrolls added 1.4 million jobs in the first half of this year, their strongest six-month growth period since late 1999.

  • Un- and underemployment are both down significantly over the recovery, as are other slack metrics that rose sharply in the downturn, including long-term unemployment and involuntary part-time work.  While part of the decline in unemployment was due to labor force exits, this negative trend has also stabilized in recent months.
  • Private payrolls grew about 3 percent faster over the first five years of this recovery compared to the prior recovery, despite the fact that the recession that preceded this expansion was much deeper in terms of lost output and much longer lasting than the downturn that preceded the 2000s expansion.  The private sector added 3.4 million more jobs in the first five years of this recovery than were added in the last one.
  • Yet, slack remains in the job market and wage growth has generally not yet accelerated; real median household income, after falling sharply by around 10 percent in the downturn, is up about 3 percent over the past few years, largely due to more work at flat real earnings.  Corporate profitability and financial market returns, on the other hand, have more than recovered their losses.

Bernstein warned that policymakers cannot stop at stabilization. To prolong and strengthen the recovery, he recommended investing in infrastructure and increasing the federal minimum wage.

Click here for Bernstein’s full testimony.

Big Gains for State and Local Employment in June

July 3, 2014 at 12:09 pm

State and local government employment had a big month in June, rising by 24,000 jobs according to today’s jobs report.  Most of the gains came in K-12 school districts, which added 18,000 jobs.

The number of state and local public employees has been trending upward since the end of 2012 (see chart), with job growth accelerating since the start of 2014.  Still, states and localities have 425,000  fewer public employees — teachers, police officers, social workers, and so on — than when the recession started, even as the need for public services has continued to grow.

Nine Things You Might Not Know About Minimum-Wage Workers

June 9, 2014 at 12:47 pm

In debates over raising the minimum wage, it’s important to know who we’re talking about, CBPP Senior Fellow Jared Bernstein explains today in the New York Times’ Upshot blog.  His post lists nine facts about who earns the minimum wage and who would benefit from raising it from $7.25 to $10.10.  Here’s an excerpted version:

  • Minimum-wage workers are older than they used to be.  Their average age is 35, and 88 percent are at least 20 years old.  Half are older than 30, and about a third are at least 40. . . .
  • They’re split fairly evenly between full-timers and part-timers.  Most — 54 percent — work full-time schedules (at least 35 hours per week), and another 32 percent work at least half time (20-34 hours per week).
  • Many have kids.  About one-quarter (27 percent) of these low-wage workers are parents, compared with 34 percent of all workers.  In all, 19 percent of children in the United States have a parent who would benefit from the increase.
  • One in eight lives in a high-income household.  About 12 percent of those who would gain from an increase to $10.10 live in households with incomes above $100,000.  This group highlights the fact that the minimum wage is not nearly as well targeted toward poverty reduction as the earned-income tax credit, a wage subsidy whose receipt, unlike the minimum wage, is predicated on family income.

    Still, a minimum-wage increase does much more to help low- and moderate-income households than any other groups.  Households that make less than $20,000 receive 5 percent of the nation’s total earnings, for instance — but would receive 26 percent of the benefit from the proposed minimum-wage increase.

  • Most are women.  Women make up 48 percent of the work force yet 55 percent of the would-be beneficiaries of the increase in the minimum wage.
  • Most are white, but minorities are overrepresented.  Hispanic workers account for 16 percent of the work force but 24 percent of those who would be affected by the wage increase.  For African-Americans, the comparable shares are 11 percent of the work force and 15 percent of those who would gain from the increase.
  • They’ve got some schooling, though less than other workers.  Of those who would be affected by the increase, 78 percent have at least finished high school, about one-third have some college under their belts, and about 10 percent have graduated from college. . . .
  • Their earnings are a big part of their family budgets.  The average worker in this group brings home half of his or her household’s earnings; 19 percent of those who would get the raise are sole earners.  Parents who would benefit from the increase bring home an even larger share of their families’ earnings: 60 percent.
  • They’re in every state, but are overrepresented in the South.  Because most of the states that have raised their minimums above the federal level are outside the South, a national increase would have more bite there.  Workers in Southern states make up 17 percent of the nation’s work force but 21 percent of minimum-wage beneficiaries. . . .

State and Local Jobs Far Below Pre-Recession Level

June 6, 2014 at 12:33 pm

The economy hit a milestone of sorts last month, as payroll employment finally topped its pre-recession level.  But there are two important caveats.

First, as we’ve pointed out, the growth in the working-age population since the recession started means that many more people today want to work but don’t have a job.  Second, the number of government jobs remains well below pre-recession levels.  State and local employment, for example, remains more than 450,000 jobs below the December 2007 level (see graph).

The large losses in government jobs are symptomatic of the sharp cutbacks in state and local spending that have slowed the recovery from the Great Recession.

State and Local Jobs Climbing out of Deep Hole

May 2, 2014 at 12:03 pm

State and local governments added 18,000 jobs in April, according to today’s jobs report, and have added 43,000 jobs since the start of 2014.  This is great news given the steep loss of public jobs due to the Great Recession.

Yet, while states and localities have slowly begun to rehire in the past two years (see graph), the number of public employees remains far below six years ago.  Meanwhile, the demands on states and localities continue to grow.  For example, public elementary and secondary schools have 492,000 more students than before the recession.