Commentators around the country have been touting last month’s uplifting unemployment statistics, which indicate, ever so subtly, that the nation’s job situation may be improving. While many large businesses have remained profitable throughout the recession, it now appears that the private sector is willing to invest in new hiring, suggesting an increased demand for goods and services.
As the Obama administration enjoys temporary praise, a new study, highlighted a few days back in the New York Times, presents a gloomier picture. The study demonstrates that the greater job creation we’re experiencing may be much less rosier that we think, because many of the country’s newly created jobs do not offer a living wage.
The study was commissioned by the non-profit, Wider Opportunities for Women, which authoritatively titled their report, “The Basic Economic Security Tables for the United States.” In order to arrive at their disconcerting findings, the study’s researchers had to determine what constitutes a living wage. Thus, the many tables presented by the study premise themselves on the following notion:
“Families, the media and policymakers often focus their attention on volatile, rising expenses, such as food and fuel. While such expenses are important in day-to-day life, they are small parts of families’ much larger economic security challenges. Expenses such as housing, transportation and child care receive less attention, but are much larger pieces of the economic security puzzle, and can be greatly influenced by policy.”
Here, the authors put forth a rather bold contention, as they turn on its head the paradigmatic metric utilized by economists to measure adequate wages, the Consumer Price Index, which considers some of the former, more “traditional” tables—food and fuel—to a much greater extent. Perhaps equally innovative, the authors further posit that “Not all families require homeownership…[though] such savings can contribute to long-term and intergenerational economic security, however, when investments are careful and savers plan for the long term.” By deflating the value of homeownership while making sure to mention it’s virtues, the authors, in a sense, take a swipe at a bipartisan generation of policymakers that abetted the crisis.
Substantively speaking, I’d guess that to many, the study’s results are equally eye-opening. The Times reports that “a single worker needs an income of $30,012 a year,” while a “a single worker with two young children needs an annual income of $57,756, or just over $27 an hour, to attain economic stability.” My cursory research indicates that this figure exceeds the median family income in the Unites States.
The study’s econometrics are advances, no doubt, but they convey a truth that many other commentators—from the activist Barbara Ehrenreich to the former Labor Secretary Robert Reich—have articulated for far too long (and that policymakers have, in turn, stubbornly ignored): that wages have not kept up with inflation over the last several decades, forcing far too many Americans to borrow more than they can afford to. So while pundits and the administration alike hail the new job data, make sure to consider the human aspect behind these statistics, which certainly may not be as peachy.