Economy

‘The recession is over’ For The Highest Earners

JM Ashby
Written by JM Ashby

If you figure that Republican lawmakers primarily or only listen to their donors, this might explain why at least half of them don't believe we should pass another stimulus bill at all, much less one sought by Democrats.

The political or donor class who earn the highest wages in America have largely recovered from the coronavirus recession and their assets are also near all-time record values.

From the Washington Post:

obs are fully back for the highest wage earners, but fewer than half the jobs lost this spring have returned for those making less than $20 an hour, according to a new labor data analysis by John Friedman, an economics professor at Brown University and co-director of Opportunity Insights. [...]

Some economists have started to call this a “K-shaped” recovery because of the diverging prospects for the rich and poor, and they say policy failures in Washington are exacerbating the problems.

Richer Americans also have seen their wealth recover — or even surge — as home values have jumped to their highest level ever (even in inflation-adjusted terms), according to the National Association of Realtors.

New analysis by Opportunity Insights of Labor Department data found employment is still 20 percent below pre-pandemic levels for workers earning under $14 an hour, and 16 percent down for those making $14 to $20 an hour. Opportunity Insights also analyzed data from the payroll processors Paychex, Intuit and Earnin and came to a similar conclusion.

If jobs in the highest wage bracket have actually increased beyond their pre-pandemic level, as Labor Department data apparently suggests, it may be understating it to say their recession is over. Some are doing better than ever.

This puts House Minority Leader Kevin McCarthy's words in a slightly different and worse light. McCarthy said passing more stimulus would be bad for Wall Street, but what he's really saying is more stimulus would reduce the gap between the rich who've recovered and everyone below them who are still struggling. What he's really saying is he doesn't want to see taxes raised on the former to pay for the latter in years to come.

High income earners should get used to the idea of paying more taxes now because it's absolutely going to happen. It will be mathematically impossible to avoid higher taxes for almost everyone following the pandemic and not just at the federal level. State and city coffers are empty, too, and that's where lower income earners are more likely to be hit.

Everyone will pay a price for the Trump years. We'll still be paying for him a decade from now.

  • muselet

    This is the sort of recovery the modern GOP considers ideal: the rich suffer a brief, shallow, slightly inconvenient glitch in their employment and earning, while everyone else struggles for an extended period. Shared sacrifice is an alien concept to Rs, and they’ll fight like cornered badgers to prevent anything like that from happening.

    I fear the recovery from the Trump/pandemic recession will be long and painful.

    –alopecia