On the face of it, one could easily think that the American economy is doing rather well. Unemployment is low, wage growth seems to be picking up, and small business-confidence has increased over the last few years as well.
But those sunny numbers and perspectives don’t tell the truth about the American economy. The truth is more somber, and bodes a great deal of ill for the future.
First of all, wages. A full 48 percent of Americans, or almost half, make less than $30,000 per year. 68 percent make less than $50,000, and a staggering 34 percent make less than $20,000.
Those numbers don’t come from any partisan news source either. They come from the Social Security Administration.
Moreover, most Americans live in metropolitan areas, where the cost of living is usually fairly high, though wages usually are somewhat higher as well. That means that Americans might actually be struggling more than the numbers suggest, since a salary of, say, $50,000 a year will not get you particularly far in the Bay Area. In other words, a portion of the 32 percent of Americans making $50,000 a year or above might not have the standard of living one might expect at that income.
Alright, you concede, income is a mess. But surely unemployment is low! People might not be making a lot of money, but at least they can find jobs easily enough.
Sadly, that isn’t true either. The official unemployment rate counts only those who are unemployed and actively seeking work. The Bureau of Labor Statistics reports that the civilian labor-force participation rate is about 63 percent. Among men, the number has declined from 76 percent in 1999 to seventy-one percent today. Among women, the number has stagnated, from 60 percent in 1999 to just under that today. There is not a single demographic cohort for whom the labor force participation rate was higher in 2019 than in 1999.
But surely this can’t be all bad! After all, many of these people must have retired, or are continuing education.
Unfortunately, even after we account for all of that, there still remain a large group of people who have dropped out of the labor force. Some, perhaps, chose to, but it is very likely that most did not.
President Trump is not to blame for that. Neither was President Obama. The American economy of the 21st century is characterized by low wages, high costs of living, and resultant skyrocketing rates of debt.
If you wanted any evidence that our economic system is not working, and has not been working for quite some time, this is it.
Header photo courtesy of Flickr.