My CBPP colleagues and I have been writing about balance ever since the budget talks around the debt ceiling began. In that context, we’ve stressed that the deal should be balanced between revenues and spending cuts.
But let us not overlook that fact that we are in the midst of an extremely unbalanced economic “recovery.” I know, with recoveries like this, who needs recessions? But GDP’s been rising for two years now—demonstrably too slowly bring down the unemployment rate, which has gone up in recent months.
But that GDP growth must be going somewhere, right?
Well, Andy Sum and colleagues from the Center for Labor Market Studies at Northeastern U put this graph together:
Source: Sum et al
Profits typically lead jobs and wages in a recovery, but this seems a lot more serious than a matter of leads and lags. With so much slack in the job market, workers have zippo bargaining power and for at least the last thirty years in this economy, when such conditions prevailed, growth did an end run around the middle class.
Balance is a wonderful concept, central to Buddhist thought. It’s also something we could use a lot more of around here.