The labor market recession is deepening and continues to threaten economic growth. Eight months of job losses were paired this month with an increase in the unemployment rate to its highest level in five years. This year’s job losses follow a very weak labor market that has left families woefully and inadequately prepared for the current crisis. Employment growth has been the weakest since the Great Depression, wages have been flat, and benefits have been declining since this business cycle started in March 2001.
At the same time, prices have risen for many items. This combination of higher prices and less income has driven families deeper into debt. As the labor market slump heightens, more and more families are succumbing to the pressures, declaring bankruptcy, and defaulting on their loans. Yet easing the burden on families will not be easy, since massive trade deficits are draining our national resources and budget deficits due to tax cuts for the rich are posing obstacles to real solutions for America’s families.
