The Erickson Report, Page 2: The economy

The Erickson Report, Page 2: The economy

Something we haven't talked about recently is the economy but I want to now because of a welcome development in how we discuss the issue, in how we regard the issue, and that welcome development is an increasing awareness of how the ways in which we have viewed and measured our national economic health have failed us and no longer tell us the truth if indeed they ever did.

I mean, look, this is what we're told: The stock market is doing fine, GDP is up, the number of jobs is growing, unemployment is low, the economy is booming! What's not to like?

This is what's not to like: According to a study this past fall by the Brookings Institution,

53 million Americans between the ages of 18 to 64 - accounting for 44% of all workers - qualify as “low-wage.” Their median hourly wages are $10.22, and median annual earnings are about $18,000.

Forty-four percent of American workers are in low-wage jobs. That study and others are going beyond the old standard looking at the unemployment rate or the number of jobs to ask: What sort of jobs? Not that many decades ago, certainly at the time I was entering the full-time workforce, we were able to assume - at least it was not unreasonable to assume - that a person employed full-time, year-round would make enough to support a family or at the very worst get by.

That simply is no longer true. Indeed, it hasn't been true for some time.

And the research and numbers are there to back that up. A new standard of measurement, called the Jobs Quality Index, or JQI, takes each month's job report from the Department of Labor's Bureau of Labor Statistics, the BLS, and determines the extent to which the number of jobs is weighted towards more desirable higher-wage/longer-hour jobs compared to lower-wage/shorter-hour jobs. As such, the JQI serves as a proxy for the overall health of the US jobs market and the US economy.

And its graph of the trend since 1990 clearly demonstrates an overall decline in job quality, meaning an increasing number of crappy jobs that do more to benefit corporate profits and the 1% compared to good jobs that could benefit most people and support families. In the words of Dan Alpert, an investment banker and Cornell Law School professor who helped to design the JQI,

“The problem is that the quality of the stock of jobs on offer has been deteriorating for the last 30 years.”

And let's dump once and for all the lie that those low-wage jobs are first or entry-level jobs for teenagers and new grads. That's not true and, again, hasn't been true for some time. That Brookings Institution study notes that 30% of low-wage workers live in families earning below 150% of the poverty line. Some 26% of low-wage workers are the only earners in their families, getting by on median annual earnings of about $20,000. Yet another 25% live in families in which there is more than one worker but they all earn low wages, with median family earnings of about $42,000, which is just 2/3 of the national median family income.

What's more, according to fivethirtyeight.com, in the 1990s, 1/5 of minimum wage workers were still making minimum wage a year later. Now it's up to 1/3. And of those who do make more, 2/3 are still within 10% of minimum wage. Put together, it means that nearly 80% of minimum wage workers are making no more than minimum wage plus 10% a year later. And more and more people are completely stuck at that minimum wage level.

Jobs Quality Indix - January 1990 to September 2019

And it's not just low-wage workers who are getting nowhere: Bankrate’s Financial Security Poll reports that in 2018, 62% of American workers got no raise. In 2019, 51% got no raise.

The overall picture is no no better: The BLS reported on January 14 that real average hourly earnings increased just 0.6 percent in 2019 - but that combined with a 0.6-percent decrease in the average workweek resulting in essentially no change in real average weekly earnings.

Indeed, that wage stagnation is also of long standing. Joseph Stiglitz, former chief economist of the World Bank, notes that real median weekly earnings are barely above what they were when Tweetie-pie took office and the median wage of a full-time male worker is still more than 3% below what it was 40 years ago. Forty years of effort to wind up behind where you started.

People already understand this, that's why in a recent poll over 70% supported a federal jobs guarantee for the unemployed.

That's why the Pew Research Center can report that 70% of American adults say our economic system unfairly favors large corporations and the rich.

That's why a Harris poll last year found that 40% of voters and 55% of women 18-54 said they would prefer to live in a "socialist" country, understood here as one providing universal health care, tuition-free education, and a decent day's wage for a decent day's work.

American workers know they're getting screwed, they've known it for some time. Now at last the "experts" are catching on.