FW: Learning from the past

[Karen Watters Cole]

What do you think?  Do the base lines need to be adjusted?  Will the definition of  “recovery” be changed, also?  Will families recover?  What are the expected outcomes when families are devastated by financial losses on a grand population scale?  What are the parallels elsewhere?  I can think of a few.  What do you foresee or predict?  KWC Unemployment Pinches Hard at the Bottom of the Economic Ladder By JEFF MADRICK, NYT, 11.28.02 @ http://www.nytimes.com/2002/11/28/business/28SCEN.html EXCERPTS: (1)….Now the economy has deteriorated again.  How does an economy with an unemployment rate around 6 percent compare with one with an unemployment rate around 4 percent?  To get a sense of the differences, Jared Bernstein, a senior economist at the Economic Policy Institute, compared the conditions of the labor markets in the first nine months of 2002, when the unemployment rate averaged 5.7 percent, with the first nine months of 2000, when it averaged 4 percent.   About 2.5 million more workers are unemployed now than in 2000.  That's bad enough.  But the unemployment rate for African-Americans has risen about 60 percent faster than for all workers.  Some 400,000 more are now out of work than were out of work in 2000, a two-year rise of 30 percent.   Moreover, after workers have lost their jobs, they have had more trouble finding new ones.  The proportion of those who have been out of work for more than 27 weeks is way up.  That is why extending unemployment benefits is so important.  Now, about 800,000 more workers have been out of work for six months or longer, compared with the number in 2000.   In addition, the number of part-time workers who would like full-time work has risen by one million.  And the increase in the labor force has slowed markedly because many more people have stopped looking for jobs.  They do not show up in the unemployment data.  In the recessions of the early 1980's and 1990's, the labor force grew far more rapidly, pushing up the unemployment rate.   (2)….FOR ALL THE CLAIMS THAT EDUCATIONAL DIFFERENCES AND INTERNATIONAL TRADE WERE THE MAIN CAUSES OF INCOME INEQUALITY IN AMERICA, THE EXPERIENCE OF THE 1990'S INCREASINGLY SUGGESTS THAT SLOW GROWTH AND HIGH UNEMPLOYMENT WERE MORE DECISIVE.  As labor markets tightened in the late 1990's, even low- and middle-income workers seemed to regain some bargaining power at last.  Mr. Bernstein and Dean Baker of the Center for Economic and Policy Research find an inverse statistical correlation between unemployment rates and wage rates for low-end workers.   With the recession that began two years ago, family incomes again fell across the board.  But it's no surprise that they fell most rapidly for those in the bottom 20 or 30 percent.  An unemployment rate of 6 percent, or even 5 percent, is just not good enough.   Outgoing Mail Scanned by NAV 2002