A Tale of Two Social Classes

Robert Reich's blog has a posting that looks at the two-tier economy in the US and how that is stalling a recovery. I've bolded key bits:

Why aren't we hearing more about the worst job and wage situation since the Great Depression?

The latest employment figures (released this morning) show job losses continuing to grow. According to the payroll survey, job losses are increasing more slowly than in previous months. According to the household survey, they're accelerating -- from 9.4 percent of the workforce in July to 9.7 percent in August. Bottom line: almost one out of six Americans who need a full-time job either can't find one or is working part-time. Meanwhile, wage growth among people who have jobs has just about stopped. The Economic Policy Institute reports that between 2006 and 2008, wages grew at an annualized rate of 4.0%; by contrast, over the past three months annual wage growth has plummeted to just 0.7%. At the same time, furloughs -- requiring workers to take unpaid vacations -- are on the rise: recent surveys show 17% of companies imposing them. More than 20% of companies have suspended their contributions to 401(k)s and similar pension plans.

So why isn't the media screaming? Partly because these job and wage losses are not, for the most part, falling on the segment of our population most visible to the media. They're falling overwhelmingly on the middle class and the poor. Unemployment among those who have been in the top 10 percent of earnings is closer to 5 percent, and their earnings continue to climb -- although, to be sure, much more slowly than before the meltdown. ...

...If we've learned anything from the Great Recession-Mini Depression of the last 18 months, it's that the skewing of income and wealth to the top has made our economy far less stable. When the majority of middle-class and poor Americans are either losing their jobs or feel threatened by job loss, and when those who still have jobs are experiencing flat or declining wages, there's simply no way to get the economy back on track. The track we were on -- featuring stagnant median wages, widening inequality, and job insecurity -- got us into this mess in the first place.

I just don't feel that Obama has come to grips with this reality. When FDR assumed the Presidency he declared a "bank holiday". He made bold moves to tell the people that "things are going to change". He may have made lots of mistakes, but at least he tried as many things as he could think of.

With Obama, there is no transparency into the "game plan". This are bumping along and you don't get a sense that the bureaucrats in Washington have their ear to the ground and hear the people's pain. You don't have a sense of urgency. I keep hoping that some great hidden effort will soon break through and it will become obvious that a great and ingenious plan has been underway to turn the economy around and make it grow. I hope that is true. But my realistic side says: nope, the efforts are all directed at putting cash into the hands of the big banks. It is Reagan's "trickle down" economy all over again.