2020: The New Economy is Here – how’s it actually going?
Happy New Year! Did you see the jobs report released on Friday? Were you a bit confused by it? Some news stations say the economy is roaring. Others point out that wages aren’t growing and job growth isn’t as gangbuster as we had hoped.
People on the ‘stock market’ often respond with emotion, not logic, to monthly job numbers. The reality is that monthly numbers are a blurry snapshot at best of the economy. Instead we should look at 6 – month, 12 – month and multi-year trends to see if things are heading in the right direction for our communities.
On January 10th, we received data for December and can now look at all of 2019 to see how the economy is actually doing. According to Bloomberg, the US saw the smallest growth in jobs since 2011 (2.11 million new jobs). In addition to this, wages grew less than expected in 2019 (below 3%), and the workforce participation rate shows us that there are still many people out of work, despite the official unemployment number being low. However, many restaurant and service employees saw a larger wage increase than those in management in the service industry. This is likely due to growing minimum wages in service-sector heavy economies that have taken immorally low wages up a few bucks a week.
The economy is a political football that we see and measure with our political blinders on. Instead of comparing stock market growth, GDP, and unemployment rates (which don’t actually measure unemployment) we should look at the economy that matters.
Can a family afford their rent or mortgage?
Can a household put a healthy dinner on the table at night?
Do people have a few hours off each year to go camping or watch a movie?
The reality is that far too many Ohioans are struggling to make ends meet and get ahead.
In 2019, the housing wage rose to $15.73 with the average renter only earning $13.92 an hour. While hunger rates are falling from year to year since the recession, hunger in 2019 was 36% higher in Ohio than in 1999. Infant mortality in Ohio is still drastically higher than the nation – with racial and economic inequality as key factors in these tragedies. And there are many other data points – higher tuition, less money able to be saved, and fees on other activities at our schools and rec. centers are going up.
The economy has ups (booms) and downs (recessions). To determine the long-term trends of the economy, we should compare strong economy to strong economy. We should compare the economy of 2019 to the economy of 2005/2006 and the economy of 1999 for an accurate picture.
The reality is people are worse off today than they were then.
Why is this the case? The federal and state governments have tried to strengthen the economy with one primary economic strategy for 30+ years – tax cuts for the wealthy.
We have gutted our social safety nets at the national and state levels. We are not investing in education adequately – including classes like financial literacy, shop, driver’s ed, and certification programs. We are not investing in community health and nutrition. We are not investing in the American people adequately anymore. For 15 years, Ohio has done nothing but cut income taxes again and again. It’s simply not working
It’s 2020, we have a clear vision on the problems in Ohio and in this country. To solve them, we need to invest in healthcare access that no longer chooses only wealthy and white at the expense of everyone else. We need to invest in schools that will educate our children for the 21st century economy regardless of zip code. We need to invest in safe, decent, and affordable housing for all Ohioans. It is time to get Ohio and America back on track and reverse 30+ years of policies that give massive tax cuts to the wealthy and leave the rest of us out of luck.