The Joyless Recovery

The Joyless Recovery

We are stuck in the midst of the most feeble economic recovery since World War II. Gross domestic product (GDP) is currently growing at an annual rate of 2.4 percent, well below the 4.9 percent average for postwar recoveries. The causes of slow growth are the persistence of declining wages and the growth of earnings inequality.

• Wages are declining for virtually all male workers and among low-wage female workers. The wage of a male worker at the 80th percentile (meaning that he earns more than 80 percent of the total male work force) has fallen 1 percent during the recovery and 2.2 percent since 1989. Men with lower wages experienced even deeper wage deterioration—about 5 percent over the 1989-1993 period. At the 90th percentile, however, wages are up 1.2 percent over 1989. Thus, wage inequality among men has grown during the recent business cycle, continuing the 1980s trend.

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