The economy: All good, except where it's not

More employers are hiring, but at what kind of wages and benefits?

January 09, 2012|Dan Rodricks

All good: About 200,000 more jobs added in December, the lowest monthly unemployment rate (8.5 percent) in nearly three years, a front-page declaration that the economy has "gained steam" and the assertion by some employers that "the worst is over."

The most noteworthy job gains were in transportation and warehousing, retail, manufacturing, health care and mining, according to the Department of Labor.

All good: Except you have to wonder how much these new jobs pay and what kind of benefits they provide.

The Labor Department reports that only 11 percent of American workers are members of a union, down from 20 percent in 1983. Not surprisingly, those same three decades show a virtual flattening of wages, when adjusted for inflation, and a widening of the gap in after-tax income between the richest 1 percent and the middle and bottom of wage-earners — the widest such gap since the Great Depression. (In the private sector, union jobs account for only 7 percent of the workforce now. Government jobs have a much higher level of unionization.)

But, let's not rain on this parade of good news too much. December marked the sixth consecutive month that the economy showed a net gain of more than 100,000 jobs.

All good, except for what you find deeper in the Labor Department's survey:

•The jobless rate for blacks was 15.8 percent, more than twice the rate for whites; it was 11 percent for Hispanics — and the overall jobless rate for minorities showed little change in December.

•The number of long-term unemployed (people who have been jobless for 27 weeks or more) remained at about 5.6 million, and they accounted for more than 42 percent of the nation's unemployed.

So, all good, except for the question about the quality of post-recession pay and benefits; except for the persistent unemployment problem among minorities and people who have been out of work for a long time, and except for that other fact of American life we picked up late last year: Nearly half of the country now lives in poverty or close to it.

In case you missed that bit of news from the Associated Press in December, it was based on a new, more detailed survey by the U.S. Census Bureau: About 97 million Americans fall into what the government considers the low-income category ($45,000 a year for a family of four). Add that to the 49 million who fall below the poverty line ($22,300 for a family of four), and you get about 48 percent of the U.S. population.

In case you were among those who wonder, with incredulity, why half of the country won't pay federal income taxes this year, there's your answer: Half of the country is in or near poverty. They are unemployed or under-employed; they are working poor, and with children; or they are elderly citizens living on benefits.

Occupy Wall Street protested the nation's income inequality; it set up the wealthiest 1 percent against everyone else, the 99 percent. (And with good reason: The income of the richest 1 percent in the U.S. nearly tripled from 1979 to 2007 while the income of the bottom 20 percent grew by just 18 percent, the Congressional Budget Office reported in October.)

But Fifty-Fifty is another way of describing this country in early 2012: Fifty percent in poverty or near it and 50 percent in the middle or above it.

So, all good, except for the fact that the road back from the Great Recession is going to be a longer one than most Americans alive today have ever seen — a slow climb out of unemployment, 30 years of stagnant wages and the highest rate of poverty since the war on poverty commenced. Fifty percent of the country needs a lift.

What to do about all this? Big question, and lots of possible answers. But I'll just offer one small step today — something simple and local:

Ralph Moore organizes a jobs fair every January in one of Baltimore's poorest neighborhoods, and he's looking for volunteers to help with the event, and for companies and small businesses to participate. If you can help a job-seeker write a resume, or if you can give someone a job — or even the hope of one down the road — give Ralph a call.

The 10th Annual Martin Luther King Jr. Day Job Fair takes place on Monday, Jan. 16, at the St. Frances Academy Community Center, 501 E. Chase St. Contact Mr. Moore at 410-539-5794 Ext. 30.

Dan Rodricks' column appears Tuesdays, Thursdays and Sundays. He is the host of the Midday show on WYPR-FM. His email is dan.rodricks@aim.com.

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