Suppose the economy recovers but everyone still feels lousy.
Our current recovery, alas, is different from all previous recoveries that America has experienced since the end of World War II. The earlier ones were marked by wage increases. As the economy picked up and more revenue started flowing to business, those businesses shared the revenue with their employees. Mark Whitehouse of the Wall Street Journal looked at how businesses were dividing up the pie 18 months into every previous recovery since 1947 and found that 58 percent of their increases in productivity trickled down to their workers in increased wages.
This time around, the numbers are starkly different. Productivity increased 5.2 percent from the recovery's start in mid-2009 to the end of 2010, he found, but wages rose by a minuscule 0.3 percent. That means just 6 percent of productivity gains have gone to our newly more-productive workers.