Boeing CEO Jim McNerney succinctly summarized a recent study by Northeastern University's Center for Labor Market Studies regarding unemployment rates for different income brackets:
The Center analyzed the labor conditions faced by income-grouped U.S. households during the fourth quarter of 2009.
In the face of one of the worst economic environments in memory, those in the highest income groups had nearly full employment levels, with just a 3.2 percent unemployment rate for households with over $150,000 in income and a 4 percent rate in the next-highest income group of $100,000-plus.
The two lowest-income groups -- under $12,500 and under $20,000 annually -- faced unemployment rates of 30.8 percent and 19.1 percent, respectively.
The study - published in February - notes that the poor are suffering Depression levels of unemployment:
Workers in the lowest income decile faced a Great Depression type unemployment rate of nearly 31% while those in the second lowest income decile had an unemployment rate slightly below 20% .... Unemployment rates fell steadily and steeply across the ten income deciles. Workers in the top two deciles of the income distribution faced unemployment rates of only 4.0 and 3.2 percent respectively, the equivalent of full employment. The relative size of the gap in unemployment rates between workers in the bottom and top income deciles was close to ten to one. Clearly, these two groups of workers occupy radically different types of labor markets in the U.S.
The study is subtitled "A Truly Great Depression Among the Nation’s Low Income Workers Amidst Full Employment Among the Most Affluent".
Arianna Huffington, commenting on the study, pointed out that it if were the high-earners suffering 31 percent unemployment, the media would be discussing unemployment non-stop. But because it is the poor who are suffering Depression-level unemployment, they largely ignore it.
As I noted last August:
Chris Tilly - director of the Institute for Research on Labor and Employment at UCLA - points out that some populations, such as African-Americans and high school dropouts, have been hit much harder than other populations, and that these groups are already experiencing depression-level unemployment.
But let's not have class warfare. Mind your own business, close your eyes and shut up.
ReplyDeleteClearly we need another round of tax cuts for the wealthy to trickle down to the poor.
ReplyDeleteLet me first say that I love this blog. I think it is one of the best news/politics/economics blogs out there. But, isn't it sortof a logical inevitability that unemployment amongst those in the higher income brackets is lower than for those in the lower brackets? How could you have $150,000 in income if you are unemployed? I suppose you could get it from 'unearned income' like investments, but if someone already has that setup they probably are not 'looking' for a job and will not go counted as unemployed.
ReplyDeleteI've no doubt that the current economic situation disproportionately impacts those in the lower income brackets adversely. Is there a form of adversity that does not hurt the poor/weak/sick/disadvantaged more than the rich/strong/healthy/lucky? I'm not saying that there aren't a lot of rich people that committed a lot of fraud that ended up hurting a lot of those who were/are poor. I'm certain there were many. I just don't think the revelation that unemployed people tend to be poor, and poor people are more likely to be unemployed than rich people is all that startling. Perhaps your intent was to show that the overall unemployment figures are skewed positively by the wealthier classes doing A-OK, while the poorer classes are suffering levels of unemployment much higher than the broader reported numbers?
Thanks for putting together such a great blog.
Although the report is certainly true, it should also be noted that a lot of college graduates are ALSO unemployed....me for one. At this point, and looking forward, I would rather have a good, solid, marketable skill rather than an advanced degree. Things will only get worse and being able to do the "basics" will always be needed. Yes, we are at this point now.
ReplyDeleteWhile I may not always agree with Arianna Huffington, she is spot on with her comments in this story. It is the media and specifically their rich owners that don't want the real economic pictuure to be seen. Nothing is getting better, jobs continue to be lost (only at a lesser rate) and Wall Street cheers. Government is corrupt as much as corporate America.
ReplyDeleteDon't you think this is because the executives preserve themselves since they make the decisions? And then down the line the better talent is forced to work for less meaning the previous $50K people are forced to take the $35K jobs, and the previous $35K people then take the $25K jobs and the previous $25k people take the $20K jobs, etc. meaning the truly minimally skilled are left with nothing available because higher skilled people were forced to take their jobs?
ReplyDeleteMore tax cuts are needed so that the trickle of fecal reaches the growing underclass. The Titanic is going down, and only the weathy are allowed access to the lifeboats,
ReplyDeletecomputer literacy and education, those without will eat another alive
ReplyDeleteWe know what happens to the rich in the end: The Road
ReplyDeleteNuff said.
This article displays some of the worst logic I've seen in some time. If you don't get it, it's probably why you're poor and unemployed.
ReplyDeleteSupply and Demand
ReplyDeleteLarger work pool + less demand = more unemployment
Smaller work pool + more demand = less unemployment
Speaking as a former 120k+ earner that had been unemployed, I will say that the two years I lived off savings was rough. I never thought of collecting unemployment as I detest the nanny government. Now that I'm in the middle class again, I will say that if I lose my job today I will be forced to apply for unemployment.
ReplyDeleteThe current economics of the US looks as if we will stretch out the recession 8x longer than it should go. The governments overregulation is what cause the housing/bank collapse. They are currently going about trying to regulate it even more. A bit like trying to fight a forest fire with blow torches.