The U.S. economy has shed 7.2 million jobs since the onset of the recession. But the economic pain of unemployment has not been spread equally, according to a new analysis by my colleagues at the Martin Prosperity Institute.
The graph below, compiled by Ulrich Atz, tracks the unemployment rate for three broad groups or classes of employment – the working class, the service class, and the creative class from 1971 to May 2009.
The report finds that:
Unemployment for all three groups has spiked since the onset of the recession. But the downturn has hit hardest on working class. . . The working class has been hard hit by every downturn since 1971. Working class unemployment spiked from 6.2 percent in 1973 to 14.5 percent in the 1975 downturn. It spiked again from 7.7 percent in 1979 to 16.8 percent in 1983. It reached 12.0 percent in 1992.
In contrast, the unemployment rate for the creative class has hardly ever reached the 4 percent mark. Unemployment rates among the working and service class are typically about 3-4 and 2-3 times respectively the rate of those in the creative class.
A closer look at monthly data (available starting in 2000) reveals that unemployment rates among the working and service classes typically move together while creative class unemployment lags the other two by several months.