It has been a bad 10 years for the economy. As I’ve written before, the last decade was, economically, a lost decade. As this graph from Ezra Klein shows, there has been essentially no job growth for ten years, net household worth actually fell, and the economy as a whole grew less than 18%—compared to 35% or more for every other decade since the Great Depression. In fact, in many ways, the last 10 years has been as bad as the Great Depression. That’s why Paul Krugman called the decade “the Big Zero.”
The latest economic news has not been good. The most recent employment report found that the economy added just 54,000 non-farm jobs in May and that the unemployment rate is back up over 9%. As Robert Reich says, that puts us at real risk for a double-dip recession, even as politicians in Washington focus on cutting government spending. Catherine Rampell’s updated job chart shows just how bad the jobs situation has been, with the economy down more than 5% from peak employment more than 3 years into the recession.
Now the Commerce Department reports that real wage growth over the last ten years has been worse than any period for which we have data—including the Great Depression. Private sector wages grew just 4.2% over the last 10 years, compared to 5% from 1929 to 1939. Real wage growth has been more than 25% for every other period except the period ending with the recession in 1982. Even in that period real wages grew 16%—four times as fast as they grew over the last ten years.
The unprecedented stagnation in wages probably has a lot to do with the continually high unemployment rate, which gives employers the leverage to pay workers less. At the same time, as manufacturing has become increasingly automated, higher wage jobs have disappeared, while most new jobs have been in the lower paying service sector. And while the underlying “core” inflation rate has remained low, rising food and fuel prices have pushed real wages even further down. So if you feel like you have had a hard time getting by, you’re certainly not alone.