Yesterday, Federal Reserve Chairman Ben Bernanke declared that the recession is “very likely over.” Nevertheless, he continued, “many people will still find that their job security and their employment status is not what they wish it was.” Id. at 35. Translated from economist speak this means that unemployment will remain high for a very long time.
The poverty numbers released earlier this week show the devastating effect of the recession. The poverty rate has grown to 13.2%, nearly 40 million people living in the United States are poor (disproportionately children, women, African Americans and Latinos) and the median family income declined by 3.6%. (See the report of the Center on Budget and Policy Priorities) This is 2008 data which does not account for the rising unemployment nor the effects of the crisis in State budgets that was not fully felt until 2009.
What does it mean that the recession is “over” but so many are still suffering from its effects -- out of jobs, losing homes, facing insecurity? Under current measures we declare success when the economy generates wealth, even if that wealth only benefits those at the top of the income scale.
The exclusive use of growth in the gross domestic product as the indicator of economic health masks many of the adverse effects of the recession and fails to account for the experiences of the vast majority of the society. For example, this recession, as have many in the past, will wipe out well paying industrial jobs with new jobs being created in poorly paid service industries; it will take years for State budgets to be restored and social services programs to be refunded; and working poor families may be forced into chronic poverty after having lost jobs and homes to the economic crisis.
France has recently embarked on a program to create a new tool to assess economic health. If adopted, the new measure will account for the well being of citizens and the environmental sustainability of the country. Under this measure, Chairman Bernanke’s projected jobless recovery would be nothing to cheer about.