Rose Colored Job Creation Numbers
A reporter named Irina Ivanova with CBS News ran a story last week that I could not stop thinking about. She reported that a group of independent economic researchers concluded the economy under President Trump is on a solid streak for job-creation. The President is expected to use these latest job numbers as a major plank for his reelection bid. That could be a double edged sword.
The second cutting economic indicator from their report showed that many of the jobs created in the Trump economy offer inadequate pay for the quality of life in the communities where the jobs are located.
That will undoubtedly play well into the President's Democrat opponent, headed into November of 2020. Many U.S. workers confess they struggle to get ahead despite the Trump economy. Many in the workforce are left wondering why this is. Is quantity replacing quality as a measure of job growth?
The increased number of low-paying jobs does not historically correlate to increased employment opportunities with above-average pay. Americans are working harder and earning less. That’s not spin. That’s not a partisan talking point. That's the math.
Daniel Alpert, of Westwood Capital states that 63% of all jobs created since 1990 were low-wage, low-hour jobs. That number is not an indicator of skilled vs unskilled labor in America. That research is also supported by research conducted at Cornell University and the University Missouri.
These researchers along with those from the Coalition for a Prosperous America and the Global Institute for Sustainable Prosperity are collaborating to create a new model for economic growth called a "job quality" index. Could this be a measured approach to decreasing U.S. labor costs? That’s what socialists seemed to conclude. If you ask them, they simply say as much.
The mathematical conclusion drawn from this research is that on average, there are currently 80 high-paying jobs for every 100 low-paying jobs. The CBS report also points out earlier this month the Brookings Institution proclaimed, "There aren't enough 'good jobs' to go around," when it released the report. The Brookings report also stating 44% of all workers in the United States are low-wage workers and went further saying that those low wage jobs averaged just $18,000 a year.
These startling economic trends seem a justification in America's latest grass roots flirtation with Democratic Socialism. Corporate citizens (say the socialists) have turned their backs to their own employees. Some companies offer assistance to their employees in obtaining government assistance. The taxpayer is subsidizing the overhead costs of businesses who treat their employees like chattel.
The numbers bear witness to a stark truth that is, the U.S. economy rebounded after the great recession but many business models have stayed in their recession postures when assessing the wages offered to their workers.
The epic growth of profits for U.S. companies and a booming stock market mask the minimalist wage approach that many companies offer. That, coupled with epic student debt for a degree that may or may not guarantee a living wage, creates a dangerous economic development crisis. If an increase in better paying jobs doesn't materialize, income to debt ratios could reach catastrophic proportions. An increase in living standards based on faulty economic logic could push a large portion of America below the poverty line.
If skilled labor is working for wages at unskilled rates for a prolonged time, it might well create a dangerous economic ripple effect. Overstated assurances of a robust and healthy economy outlook might be tainted by the same now loathed rose colored glasses that economists had continued wearing until only hours before the subprime mortgage crisis bubbled to the surface.