The Great Recession is over and job growth is in record territory, but poverty and inequality persist

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CONTACT: Jacqueline Sullivan | IRLE Media Relations jsullivan@berkeley.edu, (510) 604-2289

Berkeley – More than a decade after the start of the worst recession since the Great Depression, the U.S. economy continues to recover while the impacts from the historic downturn are still with us, according to a new research released today by the Center on Wageand Employment Dynamics (CWED) at the University of California, Berkeley.

The data-rich report, “A post Great Recession overview of labor market trends in the United States and California,” examines many facets of the economy focusing on the labor market—including jobs, unemployment, employment, wages, and poverty for the U.S. and for
California.

This is latest analysis in CWED’s series of briefs tracking the economy since the Great Recession. CWED’s previous briefs covered the state of the economy in 2010, 2012, and 2016.

“Even as we are in the midst of one of the longest economic expansions ever in the U.S., troubling challenges remain such as weak wage growth, depressed employment rates, high rates of poverty, and increased inequality,” said Sylvia Allegretto, author of the report and co-chair of CWED.

“Unemployment soared to over 12 percent in California and stayed in double-digit territory for an unprecedented forty-three consecutive months, from February 2009 to August 2012—attesting to the severity of the crash in the Golden State,” said Allegretto.

The researchers find that long-term unemployment, underemployment, employment, and prime age employment rates are all much improved in California—however they remain worse
than they were before the recession began in 2007.

According to Allegretto, “there is still much room for further tightening in the labor market which will help workers to see their paychecks grow.”

You can access the complete report here. Key Findings include:

  • It took more than six years to fully recover the number of jobs lost due to the recession. At its worst, the U.S. shed 6.3% of its jobs (8.7 million) with California losing 8.3% (1.3 million). The U.S. is currently in an unprecedented streak of monthly net job gains that began in October 2010—resulting in 18.3 million jobs in the U.S. with 1.3 million of them in California.
  • During the recession and its aftermath 164,000 public servants lost their jobs in California—net job growth since December 2007 has been just 2.3%. Accounting for population growth in California over the last decade results in a public-sector jobs gap of 157,200.
  • Even as unemployment rates have substantially improved, disparities in unemployment persist by region and race/ethnicity. In California in 2017, county-wide rates vary from a low of 2.7% unemployed in San Mateo to a high of 19.1% unemployed in Imperial County. For that year, rates were 3.5% for Asians and 4.1% for non-Latino Whites; Latinos and African-Americans had higher rates of 5.6% and 7.3%, respectively.
  • Employment rates have not fully recovered. California would have an additional 1.1 million workers if the 2017 employment rate (59.2%) were the same as it was in 2007 (62.1%).
  • Over the last 17 years, inflation-adjusted wages in California increased by 14%, 8%, and 23%, for the bottom, middle, and top terciles, respectively. Wages did not surpass inflation until 2014 for the bottom two terciles—facilitated by a tightening labor market but also driven by strong state and local minimum wage policies.
  • The incidence of poverty has improved modestly over the economic recovery. In California official poverty rates fell from 16.9% to 13.9% overall and from 24.3% to 18.6% for child poverty from 2011 to 2016. However, the more comprehensive Supplemental Poverty Measure ranks California as having the highest rate of poverty at 20.6%.
  • It was not until 2016 that typical household incomes (adjusted for inflation) in California surpassed the previous 2006 peak of $65,852. Over the last decade, incomes for a typical household increased by just 1.2% and they are up just 2.1% since 2000.

CONTACT
Sylvia A. Allegretto, report author, co-chair, Center for Wage and Employment Dynamics, University of California, Berkeley, allegretto@berkeley.edu, (510) 289-9146


The Center for Wage and Employment Dynamics (CWED) is a project of the UC Berkeley Institute for Research on Labor and Employment (IRLE). For more about CWED, visit irle.berkeley.edu/cwed/.

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