Dr. Lawrence Mishel of the progressive Economic Policy Institute, keynote speaker at MECEP’s 2010 tax and budget conference, argues convincingly that because of economic policies followed for the last 30 years, incomes for most Americans barely grew, despite vigorous productivity increases. During the modest 2002 to 2007 recovery, wages for workers with a high school diploma or a college degree did not grow at all, while productivity soared.

The Great Recession had even more troubling effects on working families. Between 2008 and 2011, average income for low-income families will drop by $1,160, a 7.2% decline, and middle-income families will lose $3,460, or 5.6%, of their income each year. Child poverty in America has risen from 18% in 2007 to 27% in 2010.

“Some people seem to believe that when you reach 10% unemployment, 90% of people are okay,” Mishel says. “That’s just not true.”

The 2009 American Recovery and Reinvestment Act (ARRA) ended steep economic decline, increasing consumer and government spending and reigniting economic growth. It preserved or created more than 750,000 jobs, including 10,000 here in Maine. However, progressives and conservatives agree that recovering the jobs during the recession will require more vigorous government action.

In a joint February 25th “op ed” column, Mishel and David Walker of the conservative Peter G. Peterson Foundation maintain that “today’s high deficits will have to go even higher to help address unemployment.” They recommend extension of unemployment insurance and other benefits for laid-off workers; fiscal relief for state and local governments; increased public investment in infrastructure; and a jobs creation tax credit.

“Public spending can help compensate for the fall in private spending, and help stem the pain of substantial job losses,” Mishel and Walker add.

The HIRE Act, supported by Maine’s entire congressional delegation and signed today by President Obama, is a significant step toward these objectives, but much more remains to be done, especially providing financial assistance to states and localities.

Dr. Mishel authored “The Great Recession: Getting Back to Work,” for the series MECEP Choices.