Unemployment gaps between the wealthiest and the poorest Americans have reached their highest level since government officials began tracking the statistic a decade ago.
It’s a very different story from the one told by President Barack Obama last week in an ABC interview about the state of economic recovery five years after the Great Recession began.
“We came in, stabilized the situation,” said Obama in an interview with ABC’s “This Week.” The President touted 42 consecutive months economic growth, 7.5 million jobs created and a revitalized auto industry.
“The banking system works. It is giving loans to companies who can get credit. And so we have seen, I think undoubtedly, progress across the board,” he said. But a new report shows that this doesn’t mean the U.S. is out of the woods when it comes to economic recovery.
The study, which was prepared for the Associated Press by two researchers at Northeastern University, shows that the rate of unemployment for the lowest-income families — those earning less than $20,000 — is now more than 21 percent, nearly matching the unemployment rate for all workers during the Great Depression in the 1930s.
Conversely, U.S. households with income of more than $150,000 a year have an unemployment rate of 3.2 percent, a level that is traditionally considered full employment. These statistics may be an indication that the fruits of economic recovery after 2008 went mostly to the nation’s top income earners.
“This was no ‘equal opportunity’ recession or an ‘equal opportunity’ recovery,” said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University. “One part of America is in depression, while another part is in full employment.”
This report comes on the heels of a study from the University of California-Berkeley showing that from 2009 to 2012, incomes of the wealthiest 1 percent rose 31.4 percent while all other incomes grew just 0.4 percent.
The gap was even wider when researchers examined Internal Revenue Service statistics data from 1993 to 2012. Over these years, the real incomes of the ‘1 percent’ grew 86.1 percent, while those of the ‘99 percent’ grew 6.6 percent, according to the study, which was released earlier this month.
This data could point to misleading or unclear statistics from the U.S. Bureau of Labor statistics, which has reported months of job creation and decreasing unemployment levels. According to BLS statistics, the U.S. gained nearly 200,000 jobs in June and 169,000 in August
The problem is that this “official” unemployment rate doesn’t count the numerous discouraged workers who have settled for low paying, part-time jobs — or have given up looking altogether.
Forbes reported in July that a more accurate unemployment rate that takes into account discouraged workers increases the unemployment rate up to about 14.3 percent, considerably higher than the “official” 7.3 percent.