Friday’s jobs report should have made Americans smile. The economy added 288,000 new jobs in the month of June and the unemployment rate dropped from 6.3% to 6.1%. Instead, the public merely shrugged off the news. A survey soon after revealed that a strong majority of Americans still believe that life will be tougher for the next generation than theirs. So why are Americans continually pessimistic about the future and the economy in general? Five reasons are offered below.
1. Part-time work: The month of June saw 288,000 jobs be added to payrolls. Good news, right? Yes and no. While all these jobs were added a solid majority of them were part-time ie. not enough to pay a living wage. June’s payroll numbers reveal an even more dangerous trend, a tendency by businesses to move full-time employees to part-time. In fact over one million workers became part timers in the month. According to Department of Labor Statistics this means over 27 million Americans are now working part-time who want to work full-time.
2. Wage stagnation: Over five years into the economic recovery and wages for the average American have barely budged. Leaving aside the minimum wage debate which is treating a symptom and not the cause, wages have barely grown 2% year over year since 2008. This barely has kept up with inflation. Wages for reporters have reportedly fallen below the national average in a majority of states. Meanwhile, the DOW has hit 17,000 and the richest 1% have taken in over 90% of the wage growth in the entire nation (Occupy be angry). This also comes at a time when companies are maximizing efficiency and cutting payrolls to the bones meaning the unemployed experience significant wage loss over a period of unemployment. In short, only the 1% have seen their wages increase while the rest of America has had to struggle with rising costs every year on stagnant budgets.
3. Partisan Gridlock: Americans have good reason not to trust elected officials from either party. No politician has delivered on his or her promises and instead has embarked on implementing an expansive, ideological agenda. Since Clinton, Americans have been subject to the partisan rhetoric of both the Bush and Obama administrations. During the age of Obama gridlock has become especially pervasive. Obamacare was passed with Democratic votes alone while ideas to fix the law’s shortcomings have been ignored. Battles over immigration reform, minimum wage and the budget have only reinforced Americans perceptions that DC is broken.
4. Lack of Social Mobility: America has prided itself on being a nation where anybody can get ahead. But the recession of 2009 has shown that class has and still does divide America and it breaks down along racial and family stability lines. Individuals from low-income, nuclear white and Asian families are far more likely to succeed than their Hispanic and black counterparts in the same circumstances. Even single parent, low-income white and Asian families have a higher chance to achieve social mobility than blacks and Hispanics. The recession has only reinforced this trend as individuals from low-income, single parent families have been forced into low paying and part-time service jobs. Meanwhile, class mobility has been easier to achieve for whites and Asians.
5. The Stock Market: Call me a cynic but the stock market does not represent the average American anymore. Instead, it represents the power of the Fed printing money to create an artificial bubble filling the coffers of corporate fatcats and the wealthy (ironically, many of them politicians). Thus, the stock market hitting all time highs means little to the average American.
The party in power seems honestly flummoxed why positive jobs numbers are not driving positive opinions of the economy. The five reasons above offer an explanation why.