Effort to Dismantle Unemployment Insurance Revived in Congress as Conference Committee Convenes

by Mitchell Hirsch – Reposted from UnemployedWorkers.org

Having narrowly averted cutting off unemployment insurance to millions of Americans right before the holidays, Congress now returns to take up what should be a relatively simple task even for this Congress — a full reauthorization of federal unemployment insurance (UI), the payroll tax reduction and other provisions through 2012.  But, as they did in December, some lawmakers are looking to revive House efforts to slash federal benefits, impose onerous new restrictions and move to dismantle the essential lifeline of unemployment insurance.

The stopgap two-month extension of the federal UI program will expire February 29th unless Congress acts on a full-year renewal.  This week, the Joint Economic Committee issued a report on the benefits of continuing unemployment insurance and the payroll tax cut.  The report estimated that more than 3.3 million unemployed workers would be cut off of their UI benefits by June 2 without a renewal of the program (see page 4 for state-by-state estimates).

A 20-member Conference Committee of the House and Senate convened for the first time this week to begin work on a full year extension.  The Committee is chaired by Rep. Dave Camp (R-Mich.), the lead sponsor of H.R. 3630, the House Republican bill that’s designed to drastically slash federal UI benefits while erecting harmful new barriers to benefits, making it harder for ordinary Americans to access their unemployment insurance.

    The House H.R. 3630 proposals would: 

    * Slash federal UI by more than half in the highest unemployment states

    * Allow mandatory drug testing of unemployment insurance claimants, stigmatizing jobless workers

    * Make jobless workers pay for their reemployment services

    * Deny benefits to those not fortunate enough to finish high school or GED

    * Let states reduce benefits and divert unemployment benefit funds to other uses

The National Employment Law Project has published a detailed legislative analysis of these and other provisions being sought by House Republicans in H.R. 3630.

Public outcry, meanwhile, has been growing in support of a full renewal of unemployment insurance and against both the reckless cuts and the proposed new barriers to benefits.  An Unemployedworkers.org action page has already generated a combined 96,000 email and fax messages to the members of the Congressional Conference Committee, and another 34,000 to Congressional leaders and other Members of Congress.

Tens of thousands of calls have been made to Congress through our dedicated toll-free line 888-245-3381.

House leaders had to, finally, accede to public pressure and drop their obstruction when Senate Republicans refused to take up the House version of H.R. 3630 back in December.  Now, only strong public pressure will keep the Conference Committee from doing real damage to jobless workers, their families and the unemployment insurance system.

Senator Jack Reed (D-RI) gets it and is fighting for unemployed workers in the Conference Committee.  Watch what Sen. Reed had to say about the unemployment extension issues during the Committee’s first meeting this week:

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Unemployment Insurance for Millions Not Yet Renewed as Jobs Bill is Blocked in the Senate

(Originally posted on UnemployedWorkers.org by Mitchell Hirsch)

Despite a majority of Senators voting to take up debate of the American Jobs Act, a minority succeeded Tuesday in blocking the measure from even being considered.  The bill includes several key job-creation and tax-relief provisions designed to boost a stalling economy, and programs to aid long-term unemployed workers, including a ban on discrimination against jobless workers in the job market, as well as the essential renewal of federal unemployment insurance programs.

Unless Congress reauthorizes the current federal benefit programs before the December 31st deadline, millions of workers and their families will be left without their primary means of support to buy food, pay the rent or mortgage, and cover their other most basic necessities.

Lawmakers are reportedly seeking to act on several key components of the jobs bill separately in coming weeks.

An estimated 1.8 million jobless workers will be cut-off from federal unemployment insurance in January alone if Congress fails to renew the benefit programs, according to a new report issued by the National Employment Law Project.  This includes nearly 1.4 million unemployed workers already receiving federal unemployment insurance, among them nearly 650,000 who would face an immediate “hard” cut-off of Extended Benefits, as well as more than 430,000 unemployed workers laid off as recently as July who will exhaust their state unemployment benefits in January.


January 2012 Federal UI Cut-offs

And those numbers may well go much higher, as unemployment remains persistently high and, in many states, rising.  In July and August, a total of more than 1.5 million first payments of regular state unemployment insurance were reported.

Over the course of 2012, the Administration projects that at least six million workers will not have access to federal unemployment insurance if the program is not reauthorized.  Ms. Dawn Deane, a 49-year-old mother of two from Philadelphia, who was laid off in late June of this year, is one of those workers in danger of losing access to federal benefits.  Despite twenty years of professional human resource experience, Deane says her diligent search for new work has thus far been disappointing.

“The unemployment insurance is helping me manage and maintain my mortgage, utilities, and car payments—helping us just barely stay above water,” Deane says in the NELP report.  “Without it, I’d just have nothing while I look for new work—not even heat, electricity, or a phone.  And if it got cut off, I would fall behind on my mortgage, probably face foreclosure, have my car repossessed, and end up applying for welfare.”

Last week, Deane testified at a House subcommittee hearing, urging lawmakers to renew the federal unemployment insurance programs through next year.

NELP’s report, “Hanging on by a Thread,” warns that a lapse or cut in the federal unemployment insurance programs would deal devastating blows to jobless workers, struggling businesses, and the fragile U.S. economy.

“For millions of out-of-work Americans hanging on by a thread, unemployment insurance is the only thing preventing a free-fall into destitution and despair,” said Christine Owens, executive director of the National Employment Law Project.  “For struggling businesses and the halting economy, unemployment insurance is what’s preserving consumer spending at a moment we need it most.  Withdrawing this crucial stimulus would likely tip the nation back into recession.”

Since the data were first reported in 1948, the nation has never experienced the record stretch of high unemployment and long-term joblessness that now plagues the economy.  Congress has never cut back on federally-funded unemployment insurance when unemployment was anywhere near this high for this long.  The highest unemployment rate when federal benefits were cut by Congress was in 1985, at 7.2 percent.  Today, the unemployment rate stands at 9.1 percent.

Federal Extensions

Currently, the unemployment rate has been above 8.5 percent for more than 31 months, and for nearly two years, over 40 percent of the unemployed have been out of work for more than six months.

Percent Unemployed 27 weeks +

The report highlights other factors that favor prompt passage of the federal extension of unemployment insurance through 2012:

  • Due largely to the federal extension, in 2010, unemployment insurance kept 3.2 million people (including nearly one million children) from falling into poverty.  Were it not for unemployment insurance, the number of people falling into poverty would have more than doubled in 2010.
  • The federal unemployment insurance programs have saved or created millions of jobs since first enacted in July 2008, including more than 1.1 million jobs in the fourth quarter of 2009 alone.
  • Recent research and two new state surveys strongly indicate that workers who are receiving unemployment insurance are more likely, not less, to stay in the labor market and actively seek work despite dim prospects for reemployment.

“With our economy so fragile, long-term unemployment so high, and the job market so weak, the stakes could not be greater or the consequences of inaction more severe,” NELP’s Owens said.

“We are mired in a national crisis of long-term unemployment.  Not since the Great Depression have so many people been out of work for so long.  This is not the time to cut back on federal unemployment insurance.”

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Don’t Let Up Now!

Written for yesterday’s Day of Online Solidarity with Jobless Workers and crossposted from UnemployedWorkers.org. The Solidarity Day may have been yesterday, but the issue is still just as urgent for tens of millions of jobless workers today.

An announcement late yesterday by President Obama included word of a tentative agreement with Congressional representatives in both parties to a full-year re-authorization of the federal unemployment insurance programs as part of a broader tax and economic package.

In a televised statement, the President said:

I’m not willing to let working families across this country become collateral damage for political warfare here in Washington.  And I’m not willing to let our economy slip backwards just as we’re pulling ourselves out of this devastating recession.

I’m not willing to see 2 million Americans who stand to lose their unemployment insurance at the end of this month be put in a situation where they might lose their home or their car or suffer some additional economic catastrophe.

The framework announced yesterday includes a temporary extension of current tax rates for two years for all income levels, including top income earners.  In addition, the President said the agreement included several other tax credits beneficial to many working families and others struggling to make ends meet in a stubbornly tough economy.

In exchange for a temporary extension of the tax cuts for the wealthiest Americans, we will be able to protect key tax cuts for working families — the Earned Income Tax Credit that helps families climb out of poverty; the Child Tax Credit that makes sure families don’t see their taxes jump up to $1,000 for every child; and the American Opportunity Tax Credit that ensures over 8 million students and their families don’t suddenly see the cost of college shooting up.

These are the tax cuts for some of the folks who’ve been hit hardest by this recession, and it would be simply unacceptable if their taxes went up while everybody else’s stayed the same.

Now, under this agreement, unemployment insurance will also be extended for another 13 months, which will be welcome relief for 2 million Americans who are facing the prospect of having this lifeline yanked away from them right in the middle of the holiday season.

Initial reactions from some members of both parties clearly indicate that not everyone is supportive of every aspect of the announced framework.  There is always the possibility that the agreement could come apart, or encounter delays in Congress.  But for now, there appears to be a consensus favoring the full-year renewal of the federal unemployment benefits programs — the focus of our efforts these last few months here at Unemployedworkers.org.  The current prospect for that full-year re-authorization looks better right now than it ever has before.  And that would not be the case were it not for your efforts to raise your voices and build public support for unemployed workers.

That’s why we are not letting up one bit — and we’re urging you to keep the pressure on Congress to do the right thing.  Even if the agreement announced by the President yesterday comes apart, we still need to ensure that the federal unemployment insurance programs are re-authorized through the end of 2011.  Those programs began to lapse for the third time this year just last week, cutting off the essential lifeline to 2 million unemployed workers this month, 4 million by the end of February, 7 million by the end of 2011 — unless Congress acts.

If you haven’t seen it yet — watch this powerful 3-minute video:

Lifeline

So, call your Senators and Representatives at 1-888-340-6522 toll free.  Keep telling them to pass a full-year renewal of the federal unemployment insurance programs.  And join us today December 7, along with tens of thousands of other online advocates, on a Day of Online Solidarity With Jobless Workers via Twitter, Facebook, your own blogs.

Don’t let up now!

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Damn the Torpedoers

Back last Spring it became increasingly apparent that one intention of the Republican-led obstruction of any and all measures designed to boost the economy and help working people was to thwart the recovery — and blame President Obama and Congressional Democrats.

Well, they’ve certainly thrown sand in the gears of any nascent recovery — one reason we’re still stuck with debilitating unemployment, a massive foreclosure debacle and a private sector that remains in a virtual hiring gridlock.

So, as we set out to our polling places to vote Nov. 2, it’s useful to recall just what’s been going on the past several months in particular, starting, of course, with the infamous obstruction of unemployment benefits last February by Sen. Jim Bunning (R-KY). Those antics were repeated the following month by Sen. Tom Coburn (R-OK), setting up another short-term emergency stop-gap measure that finally extended the unemployment programs through May.

That’s when the Senate Republican leadership joined the full-scale obstruction effort, putting the nation and the economy at a dangerous crossroads. Having successfully pressured a small number of House Democrats to join the effort to cut out core components of a job-creation and unemployment insurance extension measure, the Republicans set their sights on imposing sado-economic austerity.

In the process, they succeeded in stalling another unemployment extension — having already eliminated the federal COBRA health insurance subsidy and the extra $25 a week for the unemployed. This while preserving tax breaks for hedge fund managers and overseas investment schemes, as well as subsidies for their Big Oil buddies.

The result of that summer obstruction — a two-month battle just to pass another continuation of emergency unemployment benefits, something that, in the past, both parties had always done when unemployment was elevated — was a seven-week lapse in benefits for long-term unemployed workers. 2.5 million went without benefits during that lapse.

The economy suffered. Millions of working people, small businesses, unemployed workers and their families — all suffered. And the obstructionists laughed smugly amongst themselves, knowing that the continued economic hardship could be used for their own political gain.

Obstruct, delay, cut or defeat any attempts to improve the economic conditions of working families. That was — and is — their goal. For cynical political gain. As a result, they’ve torpedoed jobs, torpedoed the recovery for working people.

On my way to the polls, I’ll have one thing in mind: Damn the Torpedoers.

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Battle to Continue Jobless Benefits Program Looms

More than a million Americans who have been unemployed for six months or longer will be cut off from federal jobless benefits between Thanksgiving and Christmas if Congress fails to act to continue this essential program.

The last time the expanded federal program was extended, it was only after an infuriating two-month legislative fight, during which Congress allowed eligibility for the program to lapse for seven weeks leaving more than 2.5 million unemployed workers with no benefits.

When eligibility for the program was finally extended, it was only until November 30. And now that deadline is approaching — while Congress is not in session, and not scheduled to reconvene until after the election.

I’m going to go out on a limb and say that the September employment report is going to make the jobs market look like something between a stagnant pool and a dismal swamp. The ratio of unemployed job-seekers to available jobs is still 5-to-1. As Rebecca Dixon, a research and policy analyst with the National Employment Law Project, describes it:

“If I were able to wave a magic wand and fill every job opening with an unemployed worker, four out of five of them would still be out of work.”

More than 5 million jobless Americans currently receive federal emergency or extended benefits. They would all begin to be cut off from those benefits after November 30 unless the program eligibility is continued.

And they would be joined by most of the 2.5 million Americans who have have just become unemployed since June 1st and have only begun receiving state benefits. That’s because, unless eligibility is continued for the expanded federal benefits program beyond November 30, those newly laid off after June 1st in most states would have no further benefits beyond 26 weeks.

Recently we reported that 3.3 million Americans were kept from falling into desperate poverty by the existing state and federal unemployment insurance benefit programs in 2009 alone.

That these programs need to be continued well into 2011 is so obvious it defies description. Yet, we can expect as much if not more obstruction, delay and attempts to cut or eliminate the program altogether as we’ve seen previously.

And those who will oppose continuing to offer essential, if modest, assistance to the job-seeking victims of this wicked recession will — no doubt — be the same ones who will insist we extend tax cuts for the wealthiest 2 percent.

After the election, continuing the existing federal unemployment insurance benefits program must be the first and immediate Congressional priority. This should be quite a fight.

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Unemployment Benefits Kept 3.3 Million Out of Poverty in 2009

The devastating impact of Wall Street’s Great Recession was all too evident in the record surge in poverty reported recently by the Census Bureau for 2009.

From Elise Gould and Heidi Shierholz at EPI:

The poverty rate increased from 13.2% to 14.3% between 2008 and 2009, representing an additional 3.7 million people living in poverty for a total of 43.6 million in poverty in 2009. The poverty rate for children was 20.7% in 2009, representing 15.5 million kids living in poverty. In 2009, over one-third (35.5%) of all people living in poverty were children.

The poverty rate for working-age people (18-64 years old) hit 12.9% in 2009, the highest rate in nearly 50 years.

The official poverty threshold is defined as an annual income of $21,954 for a family of four (that’s $422 per week), or $11,161 for an individual. But, as Gould reports, the poor are getting poorer.

While 14.3% of all Americans were living in poverty last year, a record 6.3% were in so-called deep poverty, earning less than half the official poverty threshold, or subsistence rate, according to the new data on poverty released last week by the Census Bureau.

This sizable share of the American population falling below half the poverty line is particularly notable given that even the official poverty threshold – an annual income of $21,954 for a family of four – is widely considered insufficient to pay for life’s most basic essentials like food and housing. To fall below half the poverty line, a family of four would have an annual income of less than about $11,000.

How much worse would the poverty rates have been in 2009 without the expanded state and federal unemployment insurance programs? According to a report by the National Employment Law Project (NELP) (pdf):

The U.S. Census Bureau announced yesterday that during 2009, 3.3 million people, including 1 million children, were kept out of poverty with income support provided through unemployment insurance (UI). (emphasis added)

Number_Out_of_Poverty_UI
source: Center on Budget and Policy Priorities (CBPP)

In a related study, CBPP reports that a total of 6 million Americans were kept out of poverty by just seven of the provisions in the 2009 Recovery Act stimulus, including expanded unemployment insurance programs.

This analysis, which comes one day before the Census Bureau will release updated poverty figures (for 2008), examines seven of the recovery act’s provisions — two improvements in unemployment insurance, three tax credits for working families, an increase in food stamps, and a one-time payment for retirees, veterans, and people with disabilities — and finds that they alone are preventing more than 6 million Americans from falling below the poverty line and are reducing the severity of poverty for 33 million more. Those 6 million people include more than 2 million children and over 500,000 seniors.

Those numbers are conservative, says CBPP, and don’t include the impact of other Recovery Act programs such as the Temporary Assistance for Needy Families (TANF) emergency jobs programs, which employ 250,000 otherwise unemployed parents and youth. Those TANF programs are set to expire this week unless Congress acts to extend them.

Without the expanded state and federal unemployment insurance benefits, the number of Americans living in poverty in 2009 would have increased by 7 million — nearly twice the actual increase. And without other key provisions in the Recovery Act, that number would have been nearly 10 million. Yet, all of those programs are under assault, threatened by legislative expiration unless they are extended.

As the report from NELP concludes:

Given the important role of unemployment benefits in keeping working families out of poverty during the recession, it’s crucial that Congress keep the Recovery Act’s remaining measures in place. The current federal extensions are set to expire on November 30, 2010, ending income support for millions unless they are reauthorized. If we allow these programs to expire, millions will be subjected to preventable poverty—hardships that will have immediate and lasting impacts for families and children.
Yesterday’s bleak release, showing a rise in poverty over the course of the past year, is yet another piece of evidence pointing to the need for Congress to take action on expanded unemployment benefits as well as focused measures to create and grow jobs.

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“We Don’t Want to Go Back to the Policies that Wrecked Our Economy”

Isaiah J. Poole of the Campaign for America’s Future has an informative post on the OurFuture.org blog based on his interview with Karen Nussbaum, Executive Director of Working America.

From Isaiah’s post:

What she and Working America have learned through their conversations is that as many as four in 10 people they talked to are unsure what the nation should do about the unemployment crisis. What a majority will say when asked what is most important for growing and restoring the economy is that investing in jobs is the top priority, Only a tiny percentage will say “cut the deficit.”

In particular, outsourcing has emerged as the Achilles’ heel of the right, including the Tea Party candidates who are being bankrolled by the conservative political machine. Working America canvassers heard more calls for ending outsourcing in connection with the jobs crisis than any other single jobs-related issue. That suggests that progressive candidates should explain how policies endorsed by conservatives and their lobbyist backers—from trade agreements to tax subsidies—essentially encourage and reward outsourcing, even as they obstruct progressive legislation designed to rebuild the nation’s manufacturing capacity and funnel procurement dollars into American-made goods.

Nussbaum also learned that many rank-and-file workers, in spite of the constant barrage of “government-is-the-problem” rhetoric, understand that government can be part of the solution to today’s economic crisis. Messages that stress government intervention to create jobs, and funding to protect vital local services, wins more support than conservative messages that advocate cutting or privatizing services, the Working America canvassers have found.

There is also a real demand among working people to hold Wall Street accountable for the collapse of the economy—more proof, as if any were needed, that proposals such as a tax on Wall Street speculation and, more immediately, allowing the Bush tax cuts for the wealthiest Americans to expire at the end of the year, make for a winning political message.

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Which Way for the Working Class?

Bob Herbert writes in his column “Two Different Worlds”:

I didn’t notice much when a terrific storm slammed into parts of New York City on Thursday evening. I was working at my computer in a quiet apartment on the Upper West Side of Manhattan. The skies darkened and it began to rain, and I could hear thunder. But that’s all. I made a cup of coffee and kept working.

While I remained oblivious, the storm took a frightening toll in the boroughs of Brooklyn, Queens and Staten Island.

[...]

The movers and shakers of our society seem similarly oblivious to the terrible destruction wrought by the economic storm that has roared through America. They’ve heard some thunder, perhaps, and seen some lightning, and maybe felt a bit of the wind. But there is nothing that society’s leaders are doing — no sense of urgency in their policies or attitudes — that suggests they understand the extent of the economic devastation that has come crashing down like a plague on the poor and much of the middle class.

The American economy is on its knees and the suffering has reached historic levels. Nearly 44 million people were living in poverty last year, which is more than 14 percent of the population. That is an increase of 4 million over the previous year, the highest percentage in 15 years, and the highest number in more than a half-century of record-keeping. Millions more are teetering on the edge, poised to fall into poverty.

[...]

What is desperately needed is leadership that recognizes the depth and intensity of the economic crisis facing so many ordinary Americans. It’s time for the movers and shakers to lift the shroud of oblivion and reach out to those many millions of Americans trapped in a world of hurt.

This coming Friday, at a public session in New York titled ‘Which Way for the Working Class? Elections 2010 and Beyond’, Bob Herbert will join AFL-CIO President Richard Trumka, Working America Executive Director Karen Nussbaum, and journalist Eric Alterman in a panel moderated by The Nation Editor and Publisher Katrina vanden Heuvel.

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Smug Hypocrites

I could barely contain myself when reading the second of Susan Bruce’s outstanding recent posts here on income disparity. In “You’re Overpaid” Susan quotes from, and links to, a piece by conservative economic policy adviser Kevin Hassett, in which he calls for reducing workers’ incomes, arguing that high unemployment is caused by high wages, and that driving down wages will, somehow, bring down unemployment.

Hassett, by the way, chose to publish that piece when? On Labor Day.

Let me join Susan in sounding the alarm here. Hassett is no fringe wingnut, no isolated voice of unreason on the extreme far right. He’s the chief economic policy advocate at the leading neo-con think tank, practically speaking the top policy voice of corporate America and their lobbyists, including the U.S. Chamber of Commerce. While he’s loaded with big-time economics credentials, Hassett is perhaps best known for the 1999 book Dow 36,000, in which he and co-author James K. Glassman predicted, well, exactly that.

Ahem.

But if you’re willing to use your albeit-somewhat-tarnished economics credentials to attack workers’ wages and try to pit unemployed workers against those still working, some big business interests will surely still pay you lots of money.

So, Mr. Hassett still has his job. And, if Republicans regain control in Congress, they’ll be looking to implement Mr. Hassett’s economic policies — to further reduce workers’ incomes, eliminate minimum wage protections and tear-up union bargaining agreements.

But how revealing is it that Hassett and his fake “free-market” ideologues — who constantly rail against “government interference” — demand exactly that when they want to drive down workers’ incomes? When government must spend to help the economy, they bemoan short-term deficits, yet demand that government maintain their precious corporate tax loopholes so that they can protect their profits overseas. And when workers freely organize to improve their lives and livelihoods, Hassett and the bizcons cry out for government to intervene to break workers’ unions.

Hassett’s and the bizcons’ adherence to “free-market” economics is a fake. (Always has been.)

Still, his policy recommendations are serious — and dangerous. Hassett himself says their effects would be “painful” and “beastly” — something he apparently does not find problematic. Yet, those policies would only deepen the already massive chasm of income disparity in America, further depressing the economy now, and making it even more vulnerable to crises in the future.

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Great Divergence Pie

In the first of her two excellent recent posts here on the vast chasm of income disparity in America, Susan Bruce examined the increasing share of the nation’s income going to those already making the most between the years 1979 and 2007, the period that has been dubbed ‘The Great Divergence’.

Now the Economic Policy Institute (EPI) shows us what I’ve dubbed the Great Divergence Pie (chart, that is):

IncomeGrowth_EPI_chart

As EPI explains:

According to the Congressional Budget Office, between 1979 and the start of the current recession in 2007, the pre-tax incomes of the upper 1% grew 214%, while the incomes of the middle-fifth and lowest-fifth grew, respectively, 25% and 4%. As the Chart shows, this extremely unbalanced growth implies that 38.7% of all of the income growth accrued to the upper 1% over the 1979-2007 period: a greater share than the 36.3% share received by the entire bottom 90% of the population.

Those in the top 10% of the income scale received 63.7% of all the income growth generated over the 1979-2007 period. In contrast, the bottom 20% of all earners saw such a small share of income growth – just 0.4% – that it barely shows up on the included pie chart.

Note: “Upper-middle fifth” (60-80%) refers to those in the income scale who make more than 60% of earners but less than the top fifth. “Lower-middle fifth” refers to those who fall in the lower 20-40% range of the income scale.

The top 5 percent took 54.3 percent of the income growth, while the bottom 60 percent combined received only 11 percent of total income growth during the Great Divergence. And then the Great Recession hit, with millions of working class and lower-income Americans thrown out of work, depressing their incomes further than at any time in the last seven decades.

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