|Q&A on the Economy
Trying to get a grasp on what is happening in the economy is no easy task. Reading through the numbers, rhetoric and half-truths to find out how things really are is a challenge. The Electrical Worker crunched some numbers and checked with the experts to help answer some of your questions about how we can get the economy back on track.
Q: The media keeps talking about an economic recovery. What's the truth?
A: Officially, the economy has been in a recovery since 2009. The unemployment rate has slowly declined in the last two years, with more than 212,000 jobs being created in the first part of 2012.
Q: So if we're in a recovery, why doesn't it feel like one?
A: If you're wondering where this recovery is, you're not alone. The problem: the economy is growing, but not at a fast enough pace to get America out of the colossal ditch created by the Great Recession. The 2008 crash was bad — real bad. It wiped out more jobs than the last four recessions combined. And today more than 12 million Americans are still out of work — more than 8 percent of the population. Of those, nearly half have been looking for work for six months or more. The economy has stopped the bleeding and started to grow again, but at not nearly the pace needed to cover the enormous 10 million job deficit created by the 2008 economic collapse.
Q: So why do I keep hearing about corporate CEOs and the 1 percent making crazy salaries and big profits?
A: Because it is true. It may be a recession for us, but for America's CEOs and the top 1 percent, happy days are here again. Profits are higher now than they were before the crash, with more than 90 percent of all income generated in 2010 going to the top 1 percent of income earners.
Q: Ok, so if corporate America is making big money, why isn't it hiring?
A: There are three big reasons why job growth has been so weak in comparison with previous recoveries.
Q: So can anything be done?
A: Yes, but it requires major policy changes — on both Capitol Hill and in the statehouse. So far the debate over the last year has largely revolved around slashing budgets and how to deal with the ballooning deficit. The national debt is a looming concern, but the solution isn't giving up on putting Americans back to work or postponing modernizing our economy for another generation. If you're unemployed, your top goal isn't to figure out how to live without a paycheck — it's to a get a new job. You will need to cut back until then, but without a plan to get back to work, you don't have much of a future. But that is in essence what those who claim that government spending is our main problem are saying. Economist Paul Krugman estimates that slashing enough spending in order to balance the budget would push unemployment up past 15 percent — not to mention putting Social Security and Medicare out of business. That's not an option. Without economic growth and more jobs, we will never dig ourselves out of the hole we're in.
Q: So what can Congress and the White House do?
Q: Sounds good. So why isn't Congress doing anything?
A: Because elections have consequences. When you vote for the candidate whose priority is more tax cuts for the wealthy, union-busting, slashing Medicare and Social Security and obstructionism, that's what you get. This election year, study what each candidate has to say: on infrastructure investment, on manufacturing and on boosting the wages of working Americas. Make it about priorities, not party.
Beutler, Brian, "40 Years of Workers Left Behind," Talking Points Memo, May 2, 2012
Halsey III, Ashley, "Electrical Grid is Due for a Costly Overhaul," Washington Post, April 27, 2012
Klein, Ezra, "Zandi: Financial rescue and stimulus responsible for saving or creating 8.5 million jobs," washingtonpost.com, July 28, 2010
Konczal, Mike, "Welcome to the 1 Percent Recovery," Salon.com, March 5, 2012
PolitiFact, "George Will says most recent recession killed more jobs than previous four recessions combined," PolitiFact.com
Wiseman, Paul, "AP survey: Steady job gains to sustain US recovery," Associated Press, May 3, 2012
Read more: What Congress Can Do