The Great Recession of 2007-2008 was the most severe recession in the recorded history of recessions. The unemployment rate increased from 5 percent in 2007 to 9.5 percent at the end of the recession. According to the study by Hillary Homes, Douglas Miller and Jessamyn Schaller, in the Journal of Economic Perspectives, Summer 2012, this recession was the longest lasting recession on record.

Since the Great Recession, differing from other recessions, minority groups, youths and lower educated low wage groups have not fully regained the wages they enjoyed prior to 2007. Middle class wages are shrinking. Hence, the scenario of the economic boom is murky at best, since the boom is not filtering down to low and middle-income groups.

In the post Great Recession era we are facing the lowest official national unemployment and growth rates, and Utah has an even lower unemployment rate than the US rate of 3.7 percent. However, the Bureau of Labor Statistics (BLS) measures six categories of unemployment rates from U1to U6, labeled as underutilization rates. The official low rate U3 is not indicative of the general well-being when there are more discouraged, part time and contract workers (included in U6). From the fourth quarter of 2017 to the third quarter of 2018 this rate was 7.8 percent in the US and 6.1 percent in Utah. These rates represent very high underutilization rates of workers and loss of potential output capacity.

Employment statistics could also be misleading. A person is employed if he or she did any work for pay or profit during the survey week, or who did 15 hours of unpaid work for business or farm operated by a family with whom he or she lives or is temporarily absent from work. According to the Economic Policy Institute (EPI), March 1, 2018, even with the employment boom, attributed to the tax cuts of 2018, there is no investment boom and wage growth since the Great Recession. The wage gap between the top, middle and bottom of the income distribution has been increasing since 2000.

Utah prides itself on one of the highest job growth rates and lowest unemployment rates in the US. However, 2018 Economic Report to the Governor (ERG) shows that Utah had the third highest ratio of non-working age population to working age population (18 to 64 years) in the nation. Median hourly wage in 2017 was $17.14 (BLS), much lower than the $24 living wage, and the annual slowdown in wage growth since 2015 is being eroded by inflation. The increase in homelessness, the same poverty rate in 2017 as in 2007, 52 percent of working families in the SNAP (food stamps) program (Center for Budget and Policies and Priorities, December, 2018), health insurance uncertainty and the demand for Medicaid expansion portray a non-participatory economy for many low to moderate-income Utahns.

The decline of the middle class and increase in income inequality are worrisome signs. According to Pew Research Center, September 2018, in the US the middle of the middle-income group had approximately the same median income in 2016 as in 2000, however the upper tier of middle income lost more that the lower tier in 2016. Additionally, upward income mobility has declined, and even college graduates are uncertain about their future well-being, as they are burdened with $1.5 trillion college debt (see The Wall Street Journal, Dec. 11, 2018). It prevents them from starting families, home ownership, wealth mobility and secured retirement. In addition, the trade war, stagnant wage and income growth, projected lower economic growth, and high cost of health insurance are not optimistic signals.

Ken Gardner Policy Institute (KGPI), October 2018, finds that since 1960 the middle class in Utah declined 2.8 percent by 2016. But lower bound middle class households had 55 percent higher income and upper bound middle class households had 48 percent lower income than in the US in 2016 (2017 dollar). Thus Utah has less income inequality among middle class groups than the U.S., a hopeful sign.

The Economist, November 17, 2018, reports that there is a sense that capitalism is rigged to benefit owners of capital at the cost of workers, hence a 2016 survey shows that, “…more than half of young Americans no longer support capitalism.” This distrust is the result of accelerating income and wealth inequality since 1980s and the inaction of private and public power brokers.

Mathur is former chairman and professor of economics, Department of Economics, Cleveland State University, Cleveland, OH. He blogs at

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