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Analysis shows $1 trillion wage loss by workers through 2012

12.29.09

JANUARY 2010, Allentown/Bethlehem/Easton edition of The Union News

Analysis shows $1 trillion wage loss by workers through 2012

BY PAUL TUCKER
THEUNIONNEWSABE@AOL.COM

REGION, December 5th- According to a study released by the Center for Economic and Policy Research (CEPR), an independent economic think tank in Washington, DC., despite growing economic optimism, the economy is still far from full recovery.

“From the standpoint of jobs, the economic variable that most concerns Americans, we are not even one third of the way through the recession. Unemployment will cost workers more in terms of lost wages and salaries in 2010 and 2011 than they have this year,” states John Schmitt, a senior economist at the Center for Economic Research Center.

The report called, “The $1 Trillion Wage Deficit,” estimates the earnings loss of Americans from the beginning of the recession through 2012. The findings show that United States workers will lose a total of over $1 trillion in wages and salaries as a result of the Great Recession and the economy will continue to shed hundreds of thousands of jobs over the next three years under current policy.

The study uses recent data from the Department of Labor’s Bureau of Labor Statistics (BLS) and projections from the Congressional Budget Office (CBO) on economic performance through 2012.

“To put this into context, the total cost of the recession in terms of lost wages is substantially higher than the estimated ten-year cost of current health care reform,” added Mr. Schmitt.

The analysis shows lost wages and salaries twenty-five percent higher in 2010 ($310 billion) than in 2009 ($247 billion). In 2011, losses will be $252 billion, higher than losses for 2009.

And in three years from now in 2012, losses will still be three times higher at $147 billion, than they were in 2008, the first full year of the recession.

The study suggest African Americans and Latinos will be especially hard hit, with the recession causing them wage losses of $142 billion and $138 billion, respectively.

The report’s cost estimates do not include the cost of lost health insurance or pension coverage, lost earnings from reductions in hours for workers who keep their jobs, or any cuts stemming from belt-tightening pressures in the workplace because of the recession. The recession began in December 2007.

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