While CEO pay has increased since the crash and continues to rise, quality of life for middle and working class people has declined demonstrably. Students, who need jobs more than ever to pay off their enormous debt, get their degrees only to find that there’s no work for them.
But of course, things are getting better, right? Not according to economists, who note that slow growth (driven by consumers not having money to buy things after their bosses cut pay and benefits year after year) and worries over Europe may ensure that unemployment remains the same, or gets even worse, throughout the rest of the year and next year.
High unemployment isn’t going away — not as long as the economy grows as slowly as it did in the April-June quarter.
Weak consumer spending held growth to an annual rate of just 1.5 percent, even less than the 2 percent rate in the first quarter. And few expect the economy to accelerate in the second half of the year as Europe’s financial woes and a U.S. budget crisis restrain businesses and consumers.
“The main takeaway from today’s report, the specifics aside, is that the U.S. economy is barely growing,” said Dan Greenhaus, chief economic strategist at BTIG LLC. “It’s no wonder the unemployment rate cannot move lower.”
Sal Guatieri, senior economist at BMO Capital Markets, expects the unemployment rate to end this year — and next year — at 8.3 percent. He said he foresees no decline in unemployment because of how tepid he thinks economic growth will remain: 2.2 percent for all of 2012 and 2 percent for 2013.
Gas prices have stopped falling and have even started to rise in recent weeks. And this summer’s severe drought is expected to push food prices up toward the end of the year.
Why would anyone expect improvement, if no real changes have been made?
- People are still stuck in debt, unable to afford mortgages, rent and education;
- Employee pay has not risen with increases in tuition, housing and food costs
- Wall Street and large banks remain largely unregulated and untaxed, and;
- no one has been held accountable for this crash.
Welcome to the New Economy.