Pulitzer Prize-winning reporter reveals a jaw-dropping fact about the economy
From Washington’s Blog:
Pulitzer Prize-winning reporter David Cay Johnston has researched economics, wages, taxes, and related issues for many years. He’s written numerous books on those subjects.
Writing for the San Jose Mercury News, then serving as a columnist for Reuters, Johnston won his Pulitzer writing on economics and tax issues for the New York Times.
President of Investigative Reporters and Editors, Johnson now holds titles such as Distinguished Visiting Lecturer at Syracuse University College of Law and Whitman School of Management.
In other words, Johnston is a highly–credible reporter on economic issues.
Last week, Johnston headlined at Al Jazeera – the mainstream American press apparently wouldn’t touch the story – “Americans fared better after Great Depression than today“:
Coming out of the Great Depression eight decades ago, the vast majority fared vastly better than most people have coming out of the Great Recession, which officially ended on June 30 six years ago.
It may be jarring to hear that the vast majority of Americans, the 90 percent, enjoyed bigger income gains in the 1930s than in recent years, but that is what the data show.
The data also indicate tandem increases in both want and wealth, with the vast majority worse off in 2013 than in 2009, while those at the apex of the economy are enjoying a much larger — and growing — share of national income.
The news will be filled with stories about a record high number of jobs ….
But such stories will be misleading because in the last six years America’s population grew by about 14 million people. With population growth taken into account, America needs more than 145 million jobs to surpass 2008’s employment percentage. [Background.]
Furthermore, the share of working-age people who have work or are looking for a job – the civilian labor force participation rate – has declined. In January 2008 it stood at 66.2 percent but was down to 62.8 percent this April. Bringing the participation rate back up would require a few million more jobs.
The average hourly pay of $20.13 last year was smaller than in 1972 and 1973. Back then, the inflation-adjusted hourly average was about 6 percent higher. In other words, people in 2013 worked 52 weeks to make what they would have made in 49 weeks back in 1972 and 1973.
Wait, it gets worse.
The presidential report shows that in 1972 and 1973 the average private sector worker was paid for 36.9 hours of work per week, but in 2013 this was down to 33.7 hours because a growing share of people can find only part-time jobs.
Combine lower pay with fewer hours, and the average weekly gross pay in the private sector dropped by 14 percent in four decades. That’s the equivalent of working 52 weeks in 2013 to earn 45 weeks’ worth of wages in 1972 and 1973.
The most eye-opening measure of how poorly the vast majority are faring these days comes from comparing the periods after the Great Recession and the Great Depression.
The 90 percent, the vast majority, saw their income decline in 2012 compared with 2009, the year the Great Recession officially ended. Average annual income was down $556, or almost 2 percent, adjusted for inflation, to $30,997.
But in 1936, three years after the Great Depression ended, the vast majority enjoyed 31 percent more income than in 1933. The average increase, in today’s dollars, was $2,146 per household. [Background.]
Why have the vast majority of Americans fared worse in the last couple of years than after the Great Depression?
Numerous Nobel prize-winning economists say that we need to prosecute fraud, or else the economy will never stabilize
After the Great Depression, the government cracked down on Wall Street fraud
Postscript: Notwithstanding the soaring stock market and happy talk about jobs, we’re arguably in a Depression right now … caused by horrible government policy by both the Bush and Obama administrations.
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