Why The Economy Has Only Recovered for the One Percent
For the fortunate few scanning America's economic recovery from luxurious penthouse suites, they are treated to the magnificent scenery of record profits, escalating CEO pay and an ever-growing share of the nation's income.
But for the vast majority, the view remains bleak, despite the 4.3 million private-sector jobs added since early 2010. The horizon is still gray because of ongoing, pervasive wage cuts and a feeble job market. Very decidedly, this is a recovery largely reserved for the Republican-deified “job creators” and the investor class. In 2010, the richest 1% monopolized income gains, hauling in fully 93% of increased income, according to economist Emanuel Saez. As Think Progress reported:
After dipping during the Great Recession, corporate profits have now skyrocketed past their pre-recession levels, Business Insider's Joe Weisenthal notes. After-tax profits and corporate profits as a share of gross domestic product (GDP) are now higher than they were in the middle of the last decade, after a similar vertical spike. Despite massive profit gains, however, corporations are adding more jobs overseas than they are in the United States and paying one of the lowest effective tax rates in the developed world.
Economist Heidi Schierholz of the Economic Policy Institute explains that the relatively slow pace of hiring—although an improvement from the depths of the recession brought on by Wall Street deregulation—undermines the bargaining power of workers both individually and collectively.
“We haven't seen a labor market this weak for this long since the Great Depression. This economy needs at least 10 million more jobs. Workers don't have much power individually when there is a long line of people applying for jobs extending around the block,” Schierholz says.