The Great Recession is over for corporate America, but will still be felt by working Americans for years to come.

 

The most recent data available shows profits for Big Business are 12% above what they were in late 2007, demonstrating that corporations have restored their bottom-lines since the recession ended. But unemployment has dipped only slightly since the peak of the economic downturn, from 10.1% in October 2009 to about 9.4%.

 

For banks, which took a beating during the 2008 meltdown, profits are almost back to pre-crisis levels. For businesses outside of the financial sector, profits at back to 2006 levels.

 

Some economic observers have tried to explain away the gulf between corporate recovery and employment stagnation as a natural phenomenon that is taking place all over the world. However, this is not the case.

 

The U.S. unemployment rate is significantly higher than in Great Britain, Russia, Germany, Japan or China. In fact, according to a Gallup survey, the worldwide unemployment rate is only 7%. Writing in The New York Times, David Leonhardt points out that “In Canada, Japan and most of Europe, corporate profits have still not recovered to precrisis levels. In the United States, profits have more than recovered.”

 

Leonhardt suggests that the real reason workers in other countries have fared better than Americans is that employees in the U.S. are less protected. Unions are weaker and U.S. courts are more business-friendly.

 

In the words of Simon Johnson, co-author of 13 Bankers: The Wall Street Takeover and The Next Financial Meltdown, “The government (including the Federal Reserve) apparently can take actions that will protect corporate sector profits, although there is no guarantee that this will work so well the next time the financial sector blows itself up….It is painfully clear that the government (and everyone else) knows much less about how to protect jobs.”

-David Wallechinsky, Noel Brinkerhoff

 

In Wreckage of Lost Jobs, Lost Power (by David Leonhardt, New York Times)

Employment vs. Corporate Profit (by Simon Johnson, New York Times)