Hey employment fans, the United States economy added 113,000 jobs in January, dropping the unemployment rate to 6.6%! A tenth of a point down from last month. We’re knocking it out of the ballpark, Mr. Dekom. Neah! We did that with a roiling series of polar vortex moments literally freezing people to stay home and not explore new jobs… and we did it anyway. So what if the Senate didn’t extend the unemployment benefits for folks who recently maxed out? The numbers suggest we don’t need the help. So what if this measurement didn’t consider those long-term unemployed who no longer know where to look for work. Does it matter that part-time and limited term contract work are included or that most of the new jobs are in what I have called the new “barista economy” – low paying with limited benefits or opportunities for advancement?
Let’s drill behind the numbers that did constitute that 6.6%. The January figures were “far fewer than the average monthly gain of 194,000 last year. Job gains have averaged just 154,000 the past three months, down from 201,000 in the preceding three… The sluggish job growth could undermine hopes that economic growth will accelerate this year. But economists also say they expect hiring to return to healthier levels in coming months. They note that solid job gains in January in manufacturing and construction point to underlying strength… The government said Friday that manufacturers, construction firms and mining and drilling companies added a strong 76,000 jobs combined.” Washington Post, February 7th.
But the underlying nasty numbers still fester in what is a country with growing polarization of wealth (per my February 1st blog, 60% of our lowest economic segment owns just 2.3% of our wealth… compared to the top 1% owned 42%+), a clearly contracting middle class and a terrible skew in who is making the new dough: “New income generated since 2009 that has gone to the top 1 percent: 95 percent.”
As the President’s State of the Union speech banged home, income inequality is due to a decreasing level of economic opportunity. This the new “re-set” driven by global competition, an erosion of our comparative educational standards, and a big move away from earnings-driven labor to investment-income from mechanized and robotized manufacturing equipment (pushing money once paid as wages to those who own the automated machines).
We’ve fired workers, given the work to the few that remained behind (often cutting their pay, reminding them that they should be happy to have a job) and focused only those jobs we cannot export so easily – mining, drilling, construction, food services, and hospitality. Oh and finance, at least for those at the top of the food chain. Unions are dying, and wages for average Americans have generated lower buying power, year-by-year, for well over a decade now.
Elvis and upward social mobility have left the building. “Gregory Clark, a Scottish-born economic historian at the University of California-Davis, argues that our identity as a nation of bootstrappers [folks who lift themselves up into the higher economic strata] is largely a myth. [Challenging statements and earlier studies that social mobility is still an American tradition, Clark notes:] What I find is that the actual underlying rates of social mobility are much smaller than all these studies find. There's a very high correlation of status across generations. The data suggest that more than half your overall lifetime status is predictable at the point you are conceived. And that number is just as big in Sweden, and just as big in medieval England. We have not in modern high-income, public-education, open-access societies actually managed to increase the rate of social mobility above what it was in preindustrial society…
“[Describing his methodology, Clark adds:] I have a number of different measures for different societies. So for England, where we have some of the best data, we know everyone who went to Oxford and Cambridge from 1200 to the present. That tells us who the educational elite were in England over 800 years, and then we can ask, ‘What are the names that are showing up in that elite, and how persistent is their appearance in this elite?’…
“The existing studies look at something like your income relative to your father's income. But income is just one aspect of your social status. I know someone who lives in San Francisco who has an undergraduate degree from Northwestern and a graduate degree from Stanford Law School whose current income would be approximately zero, and has been for the last 10 years. He has devoted himself to the study of Buddhism and he mainly lives on the income of his partner. So measured in terms of income he would show up as exhibiting drastic downward mobility. But his true social status hasn't changed in that way.
“There's a lot
of froth and instability in measures like income, and there is a deeper
underlying stability to people's
social status. Looking at not only income but also education, wealth, health,
longevity, you actually find that these things are changing much more slowly.
If you have a rich father and your income falls a lot, we can predict that your
children will likely move back up the income ranks. People know this from their
own families—they see much more stability in terms of social status than these
studies would suggest.” MotherJones.com, February 6th.
What more evidence: “A ten-year survey of millennials reveals that almost one in four (22.6%) 26-year-olds are still living with their parents. The U.S. Department of Education report confirmed that, if you are tired of living with Mom and Dad, then do your homework and stay in school. According to the survey titled ‘Where Are They Now,’ education makes a difference: generally those with more schooling were less likely to be living at home. The study shed some light on how older millennials have been faring during the Great Recession.” NewsLetter@LBNelert.com, February 8th. But our secondary schools aren’t delivering, and college tuition is pricing higher education out of reach for too many Americans.
Looking at court decisions (Citizens United), our tax code (capital gains rates and off-shore shelters for the rich vs. much higher tax rates for those who earn money through labor), and laws (that favor those with the big buck necessary to file patents and raise money) – adding access to high-tuition private schools while most of the rest of the country are dealing with second rate schools – illustrate the underlying reasons why economic polarization and upward mobility numbers are only going to get worse. Transitioning from a political system that once promised equality and justice for all into an undeniable statistical reality that unequivocally favors the incumbent rich is just plain ugly.
I’m Peter Dekom, and that we seem to continue to elect representatives with little or no allegiance to the economic interests of the vast majority appears to reinforce the notion that an increasingly under-educated and gullible electorate prefers voting for meaningless and simplistic slogan versus getting results.
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