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It’s not about the jobless rate, it’s about wages lost

9 October 2012 No Comment

In today’s sound-bite universe, people tend to grab onto any little detail and, no matter how insignificant or misleading, use it to support their side of an argument.  For instance, Giants fans will happily inform you that Eli has two Super Bowl rings and Payton only has one, which proves Eli’s the better QB.  Really?  In whose universe (outside of NY, that is)?  The fact is that you have to be willing to dig deeper for the truth; and before that, you actually have to be interested in the truth.  Here’s another perfect example

When this year’s September Employment Figures came out, all of my friends who are supporting the President in his reelection bid took to the [digital] streets, blogging verbosely for all to hear.  And before you knew it, I was engaged in several very spirited conversations, all sounding very much the same.

Them (with much joy):  UNEMPLOYEMNT IS DOWN BELOW 8%!  See?  The President’s plan is finally working!

Me (benevolently):  Are you absolutely sure you want to sight this recent upturn as proof that the President has finally turned things around?

Them (with child-like faith):  Absolutely!  Didn’t you hear him?  Unemployment is the lowest it’s been since he has taken office.  How awesome is that?

Me:  Umm.  Let me get back to you on that. I have some fact checking and number crunching to do.

The first number I found actually was in their favor.  According to CNN, 125,000 net new jobs have been created since the President’s inauguration1.  Now, if you only focus on this factoid — as my friends had done, you might also be prone to shout hooray!  Don’t.

You see, this net new gain of 125,000 jobs is reflective of the fact that while approximately 4.4 million jobs were created since the president was sworn in, 4.3 million jobs had been lost.  Again, if you view these numbers like a convenient store give-a-penny take-a-penny dish, one might conclude that we are at least a little better off than were at the start.  Unfortunately, that is not the case; and the numbers don’t lie.

CNN also cited statistics comparing and contrasting the jobs lost under the watch of the current administration to those created, which showed that of the 4.3 million jobs lost, 60% of them were mid-wage jobs, while only 21% were low-wage jobs.  In sharp contrast, of the 4.4 million jobs created, 58% were low-wage, while only 22% were mid-wage jobs2.   You don’t have to have an advanced mathematics degree to see that this is not good.

The harsh reality is that more than1.6 million Americans who lost mid-wage jobs are now stuck in low-wage jobs paying $13.83/hour or less, working as retail salespeople, food prep workers, laborers and freight workers, waiters, etc.  Unfortunately, this does not depict the full extent of the pain being felt by those participating in the so-called recovery.

Utilizing the average wages earned by employees in each of the three categories and the redistribution of jobs within each, the calculated effect on total annual wages earned is staggering.  If rates remain as they are today, American workers will earn $15.8 billion less in wages in the coming year than they did four years ago.  Skilled office workers and assembly line technicians have been forced to don fast food restaurant uniforms and hairnets in an attempt to put food on their tables, roofs over their families’ heads, and somehow find a ways to send their kids to college.  Tragically, but not surprisingly, many of them can’t.   We simply cannot and must not accept this as substantive progress.  Instead, we must change the conversation.

To begin with, full employment can no longer be the singular goal.  Programs cannot just be about creating jobs, but about creating good jobs.  We must spark innovation and then nurture it.  We must help small businesses not just start, but thrive.  We must put an end to the practice of cutting a check to a business and wishing them luck, and instead marry together the massive wealth of private and public sector resources in formation of true partnerships.  We must also do what is needed to reinforce where possible, and reconstruct where necessary our country’s ailing infrastructure.  And we must fund these projects equitably; not by burdening any particular segment of citizens, but by agreeing to share the burden in proper proportion amongst all.

Failing to execute on this priorities will cause the “opportunity chasm” in this country to widen even further, quite literally swallowing up the middle class and creating a unbreakable caste system.  And then what?  Frankly I don’t care to think about it because it will make our generation the last to be able look into our childrens’ eyes and say with any conviction, “You can be anything you want to be if you’re willing to work hard enough”.  Don’t they deserve their shot at the American Dream?

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