The United States economy is in its fourth year of recovery after the Great Recession of the late 2000s.
While we aren’t out of the woods yet, financial analysts are taking a look at how far we’ve come and what challenges stand in the way of full economic recovery.
So how are we doing? According to a recently-released progress report by worker’s advocates the National Employment Law Project, good and bad.
The Good News
An analysis of federal employment data found that private sector job growth is stronger than it was at the same point following the 2001 crises.
Further, American businesses as a whole have finally reclaimed the jobs shed during the 2008 recession. As a result, the unemployment rate has gradually been falling, from more than nine percent in 2009 to 6.7 percent last month — an estimated 10.5 million Americans.
This is progress. Sort of.
The Bad News
While the number of people finding employment is rising, the report also found that a disproportionate number of these jobs are considered low-wage, paying less than $13 per hour.
During the recession, low-wage industries — specifically food-and-drink services, administrative and support services, and retail trade — lost 22 percent of jobs, yet they make up 44 percent of total job gains since the beginning of the recovery.
In contrast, middle-wage jobs, which accounted for 37 percent of job losses during the economic downturn, have recovered only 26 percent of jobs in the last four years.
Basically, this data means the bad economy has replaced better-paying jobs with low-paying ones. Or as one writer puts it: “We’ve swapped middle-class jobs for McJobs. It’s that simple.”
And the Ugly News
This change in the labor force seems to be affecting social outlook on personal financial security.
Today, fewer and fewer Americans classify themselves as middle class, according a survey by the Pew Research Center. The median household income plummeted 8.3 percent between 2007 and 2012, while the net worth of America’s billionaires has doubled since 2009 — to $1.2 trillion.
This polarization of economic classes, along with “erosion of the middle class” (as some are calling it) adds fuel to the currently-raging fire over the federal minimum wage hike.
However, those resisting the wage increase say it’s not the solution to saving the middle class. Instead, many fear it will cause inflation to spin out of control, making harder for struggling families to make ends meet.
The correlation between inflation and wage increases is complicated and, above all, unpredictable.
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