"The State of Working America 2002-03"
Lawrence Mishel, Jared Bernstein, Heather Boushey
The Economic Policy Institute, January 2003.
Available Online
The Economic Policy Institute reports in this comprehensive study of labor
trends from 1991 to the present that American workers experienced gains
in income and a decline in poverty during the strong economy of the ‘90s,
but conclude that these gains have likely eroded since economic growth began
to stagnate in 2001. The study looks at the state of family income, unemployment,
wages, wealth and poverty, and includes regional and international comparisons.
Among the most notable findings
- The labor market is in a recession with rising unemployment beginning
in 2000. The manufacturing sector was the first to be affected by this
downturn.
- Unlike previous recessions, the services sector has seen little job
growth due to the terrorist attacks of Sept. 11, 2001, and transportation,
retail trade, and wholesale trade are also unusually sluggish.
- The long-term trend of increasing work hours continued through the ‘90s,
albeit at a slower pace, making families progressively more stressed for
time.
- Low unemployment boosted wage growth during the ‘90s, proving
especially beneficial to those at the bottom of the earnings spectrum.
- Poverty declined during the latter half of the ‘90s boom, but
had returned to its 1973 level in 2000, the last year of available data.
- While the South and Midwest were the first to reap the benefits of the
1990s boom, these regions appear to have been the hardest hit by the 2001
recession.
Looking ahead to the future, the EPI believes that real wages will continue
to grow if productivity expands at a rate of 2 percent or higher. Unemployment,
however, must return to its pre-recession level of around 4 percent for
low-wage workers to benefit from the added growth.
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