January 06, 2020

A Strong Economy?                  

Todd SchoepflinBy Todd Schoepflin

How long does it take you to get to work? Would you drive an hour to get on a bus for a four-hour round trip to make $13.26 an hour?

This is what people are willing to do to travel from the Mississippi Delta to Memphis, Tennessee, to work at FedEx sorting and loading packages (FedEx covers the cost of the bus ride). As explained in this Wall Street Journal article, workers have been recruited in places with high unemployment rates at a time when the national unemployment rate is low. In one example, the $13.26 starting wage was a big improvement compared to the $7.85 hourly wage a person was making at a previous job. These part-time jobs, with some overnight shits, offer health and retirement benefits.

It’s a similar grind for Cierra Brown, whose work experience is profiled as part of Vice’s “How I Get By” series. She works two part-time jobs, one of them making $9.50 per hour at McDonald’s. Two weeks of work at McDonald’s results in a $215 paycheck. She doesn’t have a car, and sometimes it takes two hours on the bus to get to work. She can’t afford to pay for health insurance. As an active participant in the Fight For $15 movement, she says:

I share about my daily struggle—working since age 14, often having to rely on food stamps while working full time for McDonald’s, no health insurance, always worried about making ends meet. There’s no way for me to face these realities without the Fight for $15 and a Union—it’s helped me find my voice.

Work experiences like these make me skeptical of stories and headlines hailing a strong economy. The unemployment rate is 3.5% and the job market is “stellar.” The economy is “booming” and “growing at a robust rate,” some observers declare.

But who benefits from the current economy? In a Pew Research Center survey, 69% of respondents say the economy is helping people who are wealthy. Respondents recognize that poor people and those without a college degree aren’t being helped. Examine the responses and you’ll see how people in lower-income brackets frequently worry about paying their bills and the cost of health care. Views of the economy differ according to political party affiliation and social class status; for instance, 89% of upper-income Republicans express a positive view about current economic conditions. In contrast, 34% of lower-income Democrats say current economic conditions are good or excellent.

Is it a fact that the economy is strong and in a really good place, as some believe? No, says Robert Reich, who points to stagnant wages, job insecurity, and the growth of gig work as reasons why we have to consider much more than the unemployment rate when evaluating the economy. To that I would add: What does a low unemployment rate and positive stock market news mean to exploited workers, like those who are paid illegally low wages to stitch clothing in factories?

CBS News summarizes a Brookings Institution study indicating that 44% of U.S. workers are employed in low-wage jobs that pay median annual wages of $18,000. Another CBS News article characterizes the current economy as a good news/bad news situation: it’s relatively easier to find work when the unemployment rate is low, but the bad news is that most people say the quality of their jobs is poor. The article cites a Gallup report that finds 44% percent of Americans are in mediocre quality jobs and 16% are in bad quality jobs. The full report, “Not Just a Job: New Evidence on the Quality of Work in the United States,” is available for download.

The job quality measure was developed from a survey of 6,633 workers. Workers were asked to rate the importance of several characteristics (pay, stable hours, control over hours, job security, benefits, opportunities for advancement, enjoyment of day-to-day work, feeling a sense of purpose at work, power to change dissatisfying aspects of work) and then asked to rate their job satisfaction according to those characteristics. Job quality is higher for older workers, white workers, and those with more education. According to the measure, only 31% of Asian Americans are in good quality jobs. Black women are more likely to express disappointment with their job than any other large racial or gender group (key factors in being discontent had to do with control over schedule, stability of pay, and enjoyment of day-to-day experiences).

It’s hard to embrace good economic news knowing that poor families remain at risk of being evicted; as we can see in a recent New York Times article, many families are evicted because they can’t afford to pay $600 or less in unpaid rent, late fees, and court costs. A root cause of the eviction problem is that there isn’t enough affordable housing available for people with low incomes. As discussed in The New Republic article “The New American Homeless,” people making low wages can’t afford to live in Atlanta, San Francisco, and other major cities.

Moreover, hundreds of thousands of Americans are at risk of losing Supplemental Nutrition Assistance Program (SNAP) benefits because of stricter work requirements formulated by the Trump administration to receive benefits. The new rule is scheduled to take effect in April 2020. Margarette Purvis, president of Food Bank for New York City, describes the policy as ruthless and says it will harm people in economically distressed communities. “SNAP is our nation’s first line of defense against hunger,” she writes. Which groups will disproportionately lose benefits under the new rule? People of color, people with lower levels of education, and people who live in rural areas, according to Robert Greenstein.

It’s for all these reasons I’m not persuaded by those who tout economic indicators as “good for the country.” President Trump has boasted that “our economy is the best it has ever been,” but I think it’s a hyperbolic claim that can easily be challenged. I don’t think there’s cause for celebration when so many people are dissatisfied with work and struggling to make ends meet, and so many people are without secure housing.

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