The $1 Trillion Wage Deficit

Source: John Schmitt and Dean Baker, Center for Economic and Policy Research, December 2009

We use Bureau of Labor Statistics (BLS) data on the economy since 2007 and Congressional Budget Office (CBO) projections of economic performance through 2012 to estimate the total loss of wages and salaries resulting from the decrease in employment in the current downturn.

Using a methodology that produces a conservative estimate of expected losses, we find that the fall in employment from its 2007 levels will cost U.S. workers just over $1 trillion in lost wages and salaries during the five-year period 2008-2012.

The estimated lost wages and salaries exceed – by about $150 billion – the CBO’s estimate of the full ten-year cost of the health-care reform bill that recently passed in the House of Representatives.

Leave a Reply