• Market Crumbs

Is The Jobs Market Worse Than Headline Data Suggests?


Image via PBS

When it comes to the U.S. jobs picture, the media and politicians usually focus on one statistic - the unemployment rate. It's simple to understand, easy to add to any statement about how well the economy is and recently, is quite low.


In October, the unemployment rate moved slightly higher to 3.6%, still near its lowest level in 50 years. Going back exactly ten years to October 2009, the unemployment rate hit its peak of 10.2%. Given the gains in the stock market and the decline in the unemployment rate over the last ten years, it's not surprising there's so much positive news about the U.S. jobs picture.


However, according to a recent report by The Brookings Institution, a staggering amount of American workers are earning wages that make it difficult to support themselves or their families. 53 million Americans between the ages of 18 to 64, accounting for 44% of all workers, currently qualify as "low-wage." This equates to a median hourly wage of $10.22 and median annual earnings of about $18,000.


Their report found over half of low-wage workers have levels of education indicating they will remain low-wage workers. 20 million workers aged 25-64 have a high school diploma or less, while seven million aged 18-24 are not in school and do not have a college degree. Researchers at the Federal Reserve believe there are not enough jobs paying decent wages for people without college degrees to escape low-wage work.


According to the U.S. Census Bureau, 11.8% of the population, or roughly 38.1 million people, live in poverty as of 2018. While the poverty rate has declined for four-consecutive years, last year was the first year the official poverty rate was significantly lower than the financial crisis.


After ten years of inflating the stock market through low rates and QE, creating record inequality in the process, the Fed is suddenly starting to act as if they care about those who are still not financially secure. Fed Chair Jerome Powell said to Congress recently "We want to remind ourselves that prosperity isn’t experienced in all communities. Low- and moderate-income communities in many cases are just starting to feel the benefits of this expansion." Even Minneapolis Fed President Neel Kashkari wants to "redistribute wealth," saying "monetary policy can play the kind of redistributing role once thought to be the preserve of elected officials."


While Americans having low-wage jobs is not a new concept, it's alarming how many are still living at or below the poverty line despite the media and politicians touting the strong jobs market and greatest economy ever. Even worse, the same policymakers who are driving up their cost of living now believe they have a solution to these issues, just like climate change.


Maybe when Kashkari travels the country visiting Walmart stores to tell people their cost of living isn't rising fast enough he can also tell low-wage Americans how he and the Fed will redistribute wealth in their favor. Leftover Crumbs

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