The dichotomy can be explained, at least in part, by the need for more anti-poverty entitlements, a decline in labor participation (those who have given up looking for work), the predominance of part-time work in the jobs that have been created since the Great Recession, and by a growing income gap and more pronounced wealth gap that began opening in 1989 and continues to the present.
The number of Americans living in poverty has risen by nearly 5.5 million in the past five years according to FactCheck. Clearly, the number of Americans struggling at the lower end of the economic spectrum has grown.
Over 65 million Americans now live at less than 125 percent of the federal poverty level. Social Security Disability Income enrollment has grown from 9 to 11 million in the past five years. The Supplemental Nutrition Assistance Program (Food Stamps) program has expanded from 26 million participants in 2007 to 47 million today. Medicaid and CHIP now enroll 65 million Americans, an increase of approximately 15 million in five years.
A look beyond the unemployment headlines reveals that unemployment and under-employment remain in an unhealthy state despite the 5.8 percent unemployment rate. The Bureau of Labor Statistics’ U6 report, a more accurate indicator of employment health, stands at 11.5 percent.
The labor participation rate remains a disappointing 62.8 percent reflecting a historical low over the past 40 years. Over 92 million of 250 million Americans of working age are NOT seeking work.
According to the Public Broadcasting Service almost 7 million Americans have been forced to accept part-time work and an additional 1.2 million are being reported as full-time workers by the Bureau of Labor Statistics because their multiple part-time jobs add up to full-time hours.
Wages have posted lackluster performance barely keeping pace with inflation and trailing far behind productivity increases.
Federal Reserve Chair Janet Yellen recently said that between 1989 and 2013 the average income of the top 5 percent of households rose 38 percent while growing less than 10 percent for the remaining 95 percent. Worse yet, the average net worth of the bottom 50 percent dropped by half while rising 89 percent for the top 5 percent over the same period.
The mid-term election result and exit polls reflect the frustration created by these many negative economic performance statistics. Cherry picking improved unemployment rates and stock market records cannot overcome the sense that most Americans seem to have that the economy is not performing well.
The next Congress and the President must work aggressively to improve economic performance. In the short term barriers to growth must be decreased and incentives implemented to increase economic growth that will generate more full time jobs at higher rates of pay. In the long term, they must implement policies that will increase household income and net worth for a broader spectrum of Americans.
The measure of success for government should not be the number of citizens who avail themselves of anti-poverty entitlements, but rather, the number who no longer need assistance because they have found better opportunities.
This post was reprinted in the SW Florida News-Press on November 24, 2014 and is available at http://www.news-press.com/story/opinion/contributors/2014/11/24/despite-numbers-economy-disappoints-voters/19455195/ReplyDelete
This post was reprinted in the Cape Cod Times on November 29, 2014 and is available at http://www.capecodtimes.com/article/20141129/OPINION/141129513/101051/jsonReplyDelete