And another reason for caution about the current/coming rebound in our economy:  worker pay may fall.  Why? The huge, continuing numbers of unemployed press wages down — businesses just don’t need to compete in wages.

At least that is the risk seen by the LA Time’s business columnist in this “Market Beat” column.

,,,the magnitude of job losses here and abroad in this devastating recession poses a huge risk to the future compensation of the still-employed: What if, for years to come, there are masses of qualified people willing to do what you do — but for much less pay?

The U.S. economy has lost more than 7 million private-sector jobs since December 2007, dwarfing the 3.3 million lost in the 2001 recession and its aftermath.

“Never has business shed so many workers so fast, so many people failed to find work who are looking for work, and so many dropped out of the labor force as in the current circumstance,” said Allen Sinai, head of Decision Economics Inc.

Petruno connects the dots: “downward pressure” on wages means a) working families earning less (and generating less revenue) possibly leading b) to deflation and our economy stuck in the bottom of a recession.,