Officially, the Great Recession ended in the summer of 2009, when the highest grossing movie was “The Hangover” (the first one) and “Boom Boom Pow” by the Black Eyed Peas topped the music charts.
Five years into the recovery, our state economy remains quite sluggish. The Commerce Department, for the first time, released quarter-by-quarter estimates of economic growth for states, going back to 2005. These figures show an enormous gap between where we are today and where we’d be if the recession never happened. Roughly speaking, people in Massachusetts earn about 90 cents today for every dollar they might have made, in a recession-less world.
Isn’t the job market improving?
One of the puzzles of our sluggish recovery is that the unemployment numbers look surprisingly promising.
In just the last year, unemployment in Massachusetts dropped from 7.2 percent to 5.6 percent.
Unemployment, however, doesn’t tell the whole story. And if you look at the flip side, you find that the share of people in Massachusetts who actually have jobs remains well below its pre-recession level. It’s no better than it was in early 2012 or the middle of 2010.
How does inequality fit in?
Even when our economy does manage to grow, more and more of the growth is being captured by high-income residents.
If inequality weren’t increasing, and the distribution of income was the same as in 1979, low- and middle-income families would be earning between $6,000 and $8,000 more each year.
Is there room for optimism?
The US economy did much better in the second quarter of this year than in the first, and job creation has strengthened significantly throughout 2014.
For years, though, people have been talking about green shoots and a recovery that is finally taking hold. At this point, it’s tough to say whether we’re more likely to see a robust recovery or a fourth “Hangover” movie.