America's Lost Decade, Cont.

For the last few months, Atlantic Business has been running an occasional series on the last decade, which has been, in far too many ways, a lost decade for Americans. Private sector job growth in the last ten years is now negative for the first time since the Great Depression. Income for the median American household fell for the first time in four decades according to the new Census report. And it's possible we haven't hit the bottom in either category.

If you prefer your bad news in picture form, then try this.

Here's a chart from the Center on Budget and Policy Priorities, via Matthew Yglesias, that shows how Americans in the middle have never recaptured the highs of the late 1990s.


"This is basically without precedent in U.S. history," Yglesias says. It's certainly without precedent in the last half-century. But unfortunately, it's part of a broad trend that is rather recent. The last two recession recoveries in America -- after the early '90s recession and the early '00s recession -- were famously jobless recoveries. That is, GDP was growing, but the job market was not. Check out this graph, that measures job loss and job growth in the last six recessions.
The recessions of '74, '80 and '81 are valleys that turn up quickly. The bottom of the job market is a trampoline. In '91 and '01, it looks more like a wide riverbed. That's what a jobless recovery looks like, with a long meandering floor during which time GDP has recovered but thousands still languish in un- and under-employment. The inability of the private sector to produce enough jobs coming out of recessions is becoming something much worse than "basically without precedent." It's becoming a trend.