September 17, 2019

The Economy Isn't as Good as It Seems

“Much has been made lately of the hot economy, a narrative driven largely by a long run of strong jobs numbers. But this enthusiastic story line is ignoring a few disturbing structural problems that suggest that the economy is not as strong as those numbers suggest. Underneath the hood, problems persist, including earnings below what families need to get by, stark inequalities in wealth and income, an increasingly jittery stock market, an affordable housing shortage, damaged fiscal accounts and slower growth on the horizon.

Wages trend up but still too low: The tight labor market is no doubt lifting workers’ wages, particularly at the bottom of the wage scale as less-advantaged workers see their bargaining position improved. However, a few good years of rising wages doesn’t make up for the decades of real wage stagnation faced by many middle- and low-wage workers. The result is that for many working families, their paychecks fail to meet their basic needs.

Consider a single parent with a couple of kids who is earning the 20th-percentile wage (20 percent earn less; 80 percent earn more) and whose pay could rise to $13 per hour by the end of this year, or about $26,000 per year, pretax. Subtracting payroll taxes and adding tax credits for working parents could get her up to about $30,000. That clears the poverty line, but it doesn’t pay for decent housing, child care, health care and transportation, at least not in most cities. Family budget calculators show that child care for two kids costs about $11,000 per year in Ohio, and more than twice that in New York. Add housing and health-care costs, and even middle-wage earners with children have trouble squaring their budgets with their salaries.”

Read more

JJ Editor's Picks

"‘Great-power competition” is increasingly a central concern in Washington foreign-policy circles. The 2017 U.S. National Security Strategy warns that “China and Russia challenge American power, influence, and interests, attempting to erode..."

"Just to be sure I heard it correctly, I replayed former vice president Joe Biden’s eye-popping gaffe from Thursday night’s debate instructing poor parents to put the record player on to help their children learn. “#Record player” was trending on..."

"For many people, getting away from it all means decamping to a cabin in the woods or a house by the beach. Soon there may be another option: lifting off to a hotel serenely orbiting high above the planet. Though space hotels have long belonged..."

"I didn’t lead a life of any particular hardship growing up, but as a kid in New York in the 1980s, I did have to do without certain things that many of today’s middle-class parents deem essential — a yard, for example — and my dad tells me..."

"Not too long ago, the “gig economy” looked as if it just might be the future of work in America.The rapid rise of digital platforms that let people earn money by driving passengers, delivering groceries, walking dogs or running errands for..."

""The Goldfinch" has a painting at its center, but despite a classy palette of ingredients conjures a lifeless, disjointed picture. Adapted from a Pulitzer Prize-winning novel, the movie represents a transparent bid to bring the book's prestige..."

"To make sense of what's going on as Israelis head to the polls Tuesday, one would need to be part mathematician and part psychologist. Determining who will sit with who in a prospective coalition is like choosing sides at a schoolyard pick-up..."

"It’s humiliating to consider the things we know instead of the things we should know. I can’t tell you exactly how the Michigan Republicans are trying to illegally gerrymander their state, but I know why Lana Del Rey is angry on Twitter. So it..."