The Rich are Doing OK, Recession for the Rest of Us

Perhaps you had a hunch. And perhaps you were correct: According to a new study, the elites do NOT feel the plight of the unemployed and underemployed. The recession is hitting mostly lower income people and not only have low-income workers been the hardest hit by the jobs crisis -- but, shockingly, there has been "no labor market recession for America's affluent."

The study from Andrew Sum, Ishwar Khatiwada and Sheila Palma at Northeastern University's Center for Labor Market Studies suggests that the unemployment problem is largely a problem for low-wage workers.

Workers in different segments of the income distribution found themselves in radically different labor market conditions at the end of calendar year 2009. A true labor market depression faced those in the bottom two deciles of the income distribution, a deep labor market recession prevailed among those in the middle of the distribution, and close to a full employment environment prevailed at the top. There was no labor market recession for America's affluent.

From the study:

• Households earning over $100,000 per year are near a "full employment environment." Households with incomes of $100,000 to 149,999, had an unemployment rate of 4 percent, those with incomes of $150,000 or more, had an unemployment rate of 3.2 percent. Unemployment rates below 5% have tradionally been considered "full employment."
• Households with incomes of $12,499 or less. had an unemployment rate of a staggering 30.8 percent. That's more than five points higher than the overall jobless rate at the height of the Great Depression.

Bob Herbert at the New York Times noted, "The point here is that those in the lower-income groups are in a much, much deeper hole than the general commentary on the recession would lead people to believe."

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