Bloomberg reports what seems to be good news. John Williams, president of the Federal Reserve's San Francisco bank, says that the job market is doing so well that the central bank might need to raise interest rates. The article cites lower unemployment rates as the reason for the Williams' statement. Unemployment has declined greatly from its peak during the Great Recession. Even so, many Americans who are counted as employed are only working part-time. Many more are working full-time, but doing so at a low wage. Even workers who make middle class incomes are struggling because they have only received minimal raises over the past 5-8 years.
It’s great to be optimistic, and the Fed should be concerned with inflation. However, most Americans do not feel secure in their jobs and incomes. According to the Consumer Confidence Index of the Conference Board, Americans are not enthusiastic about the current economy. Almost as many people (11.1%) expect their incomes to decline as the small number (17.4). These metrics also show that most American are treading water, not what should be expected in an expanding economy. Politicians and the Fed need to address that concern and not simply focus on the unemployment rate. There will only be a real recovery when Americans feel financially secure.
Many experts point to consecutive months of job growth as if they were talking about Joe DiMaggio’s famous hitting streak. At the same time, they say the growth is not good enough, which makes them sound reasonable. It also hides ignores a growing problem: Too many of the new jobs are low wage.
Writing for MSNBC, Suzy Khimm reports that over a third of the 195,000 jobs added in June were in the hospitality industry, which usually generates low-wage positions. Khim also notes that new jobs are more likely to be part-time than they were before the Great Recession. Paul Krugman’s view of the situation is even more dismal: “Full recovery still looks a very long way off. And I’m beginning to worry that it may never happen.” To a degree, Krugman blames his usual suspects: the Fed and the Austerians. However, this time he adds a new culprit: voters who don’t seem to care.
In my encounters with clients who are employed, the story is not much better. They talk about small raises or flat salaries, increased workloads, and employers that only know how to ask for more. Yesterday, I wrote about workers in China kidnapping their boss. In the U.S., workers and voters just seem beaten down. They blame government, but they don’t change it. They blame the poor, most of whom are working at low wage jobs, and they ignore the people who have benefitted most from this broken economy.
Sure, the monthly jobs numbers sound good again. Look below those numbers, and you see another bridge waiting to fall.
Laura Flanders of The Nation interviewed Robert Pollin, author of the new book, Back to Full Employment. Pollin believes the Federal Reserve could take the lead in cutting unemployment by getting more money into the economy. His view goes against the experts who want to “cut, cut, cut” [everything except the military]. I like what Pollin is saying, but it sounds too easy [and too good] to be true. Our politicians and their rich patrons want to strip government and let working people fend for themselves. In this environment, I don’t see how a great plan like Pollin’s will ever get off the ground. I hope I’m wrong.