For Immediate Release
Alan Barber, (202) 293-5380 x115
New Analysis Points to $1 Trillion Wage Loss Through 2012
Labor market less than a third of the way through the Great Recession
WASHINGTON - Despite growing economic optimism in some quarters, a new report by the Center for Economic and Policy Research (CEPR) shows that the economy is still far from full recovery.
"From the standpoint of jobs - the economic variable that most concerns
Americans - we are not even one third of the way through the
recession," said John Schmitt,
a senior economist at CEPR and an author of the new study.
"Unemployment will cost workers more in terms of lost wages and
salaries in 2010 and 2011 than they have this year."
The report, "The $1 Trillion Wage Deficit,"
estimates the earnings loss of Americans from the beginning of the
recession through 2012. The findings show that U.S. workers will lose a
total of over $1 trillion in wages and salaries as a result of the
Great Recession and the economy will continue to shed hundreds of
thousands of jobs over the next three years under current policy.
"To put this into context," continued Schmitt, "the total cost of the
recession in terms of lost wages is substantially higher than the
estimated ten-year cost of current health care reform."
uses recent data from the Bureau of Labor Statistics (BLS) and
projections from the Congressional Budget Office (CBO) on economic
performance through 2012.
The analysis shows lost wages and salaries 25 percent higher in 2010
($310 billion) than in 2009 ($247 billion). In 2011, losses will be
$252 billion, higher than losses for 2009. And three years from now in
2012, losses will still be three times higher, at $147 billion, than
they were in 2008, the first full year of the recession.
African Americans and Latinos will be especially hard hit, with the
recession causing them wage losses of $142 billion and $138 billion,
costs estimates do not include the cost of lost health insurance or
pension coverage, lost earnings from reductions in hours for workers
who keep their jobs, or any cuts stemming from belt-tightening
pressures in the workplace because of the recession.
The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.