A Quarterly Report on the Economy for Working People

The context of this quarterly report is important. The trend toward a neofascist political economy continues to fester in some states as the basis of the Republican Party’s program. There are signs that opposing forces are winning sporadic political victories; parts of the country appear to be wary of the gargantuan deceit, duplicity, and destruction promulgated by Mr. Trump and the craven Republican media, politicians, and officials who enable him.

Underneath the tumult and theater, it's always about economic privilege gained by political power. The clamor generated to distract working people by scapegoating groups with cultural issues is a strategy employed by fascists and neofascists throughout history.

Scapegoating marginalized demographics is transparent, but if repeated enough, misinformation tends to be accepted by significant numbers of working people. They are still languishing in a moribund economy and scapegoats are a convenient distraction.

The oligarchs here knew this and their strategy to purchase as many politicians as possible spread across the nation. The Buckley decision in 1976 and the Bellotti decision in 1978 was cemented by Citizens United in 2010. American oligarchs were given virtually unrestricted latitude to mold the economic landscape at the expense of working middle-class and working-class people.

The same economic conditions that produced a Trumpian party with the ability to avoid reason beyond an amoeba-like level are still with us. Large demographics of primarily white working people have not figured it out yet. When they awake from this cosmic con, the myth of “American Exceptionalism” may manifest itself in ways not presently imaginable.

Unemployment

The Ludwig Institute of Shared Prosperity (LISEP) measures the percentage of the labor force that is functionally unemployed. Using data compiled from the Bureau of Labor Statistics (BLS), their “True Rate of Unemployment” tracks the percentage of the labor force that does not have a full-time job (35+ hours a week) but wants one, has no job, or does not earn a living wage calculated at $20,000 annually before taxes.

“True Unemployment Rate”—April 2023: 23.1 percent

BLS-Unemployment Rate—April 2023: 3.4 percent

Shadow Government Statistics (SGS) is also an untraditional economics website. Their “Alternative Unemployment Rate” is seasonally adjusted and includes unemployed workers who stopped seeking work after one year.

The BLS mysteriously defined this large unemployed demographic out of existence in 1994. The BLS U-6 rate includes short-term discouraged and other marginally attached workers as well as those forced to work part-time because they cannot find full-time employment. However, the BLS U-6 rate does not include the long-term unemployed.

“Alternative Unemployment Rate”—April 2023: 24.6 percent

BLS Unemployment Rate—April 2023: 3.4 percent

Underemployment

Underemployment is defined by the BLS as workers that are included in their measures of U-4, U-5, and U-6. The type of work these numbers represent is absent from the measure.

The numbers are important, but do not address a more elusive and debilitating condition of underemployment. That defines underemployment as individuals working at a full or part-time job but are underutilizing their skills in the position. Often, underemployment has a long-term effect on those who remain in these types of positions. Chronic underemployment may lead to severe discouragement or financial crisis.

It was once axiomatic that a degree from a two or four-year college would guarantee a better paying job with health benefits and a pension.

The Federal Bank of New York released a report this May that defined the share of graduates working in jobs that typically do not require a college degree.

A job was classified as a “college job” if 50 percent or more of the people working in that job indicated that at least a bachelor's degree was necessary.

College graduates were those aged 22 to 65 with a bachelor's degree or higher; recent college graduates were those aged 22 to 27 also with a bachelor's degree or higher. The numbers excluded those currently enrolled at a college or university.

An economic model that cannot provide economically secure jobs opportunities with benefits for all of its workforce must be addressed at a structural level.

The result was a large demographic of over 30 percent of college graduates working in jobs that did not utilize their degree.

Statista reported in June this year that in February 2023, 39.6 percent of recent college graduates were underemployed. This was an increase from January, when 38.8 percent of recent college graduates were underemployed.

Add the enormous debt reported by the Education Data Initiative in April 2023 and the prospects of obtaining reasonable economic security becomes virtually unattainable for large numbers of students.

An economic model that cannot provide economically secure jobs opportunities with benefits for all of its workforce must be addressed at a structural level. This feature of our economic model is directly related to the unconscionable disparities of income and wealth existing in our country.

Income

Income generally includes revenue from wages, salaries, interest on savings accounts, dividends from shares of stock, and rent.

Income inequality is higher in the United State than any other developed country. The Gini Coefficient measures income inequality by the share of national income received by proportions of the population. 100 percent equality means that everyone received an equal portion of income and would be 0.00. In the most unequal society, the measure would be 1.00.

According to the Gini Coefficient, household income distribution here was 0.43 in 1990. This number rose to 0.49 in 2021 which indicated a significant drop in a fair income distribution.

According to a Congressional Budget Office report released in August 2021 income inequality in the United States has been rising for decades.

Over the past forty years, the richest one percent of Americans have enjoyed the fastest income growth.

Asset Limited Income Constrained (ALICE) is an organization that works to secure economic and racial justice for low-income Americans. ALICE created a Household Survival Budget that represents the minimum income necessary for the cost of household basics including housing, child care, food, healthcare, transportation, technology, taxes, and a miscellaneous contingency fund equal to 10 percent of the household budget.

ALICE also created a Household Stability Budget that provided an estimate of slightly higher standards than the Household Survival Budget, including a 10 percent savings category.

An ALICE report in April 2023 was based on the 126,903,920 households here in 2021:

29 percent of ALICE households earned above the Federal Poverty Level but not enough to afford the basics in the communities where they live.

41 percent of households here were below the ALICE threshold of poverty.

If 41 percent of households were below this poverty measure, it is reasonable to conclude that a troubling number of households here are living just above the poverty line.

The income deprivation of our economic model is better understood by reviewing the level of income required to live a basic lifestyle in various localities.

The “cost of living” measures the costs to live in a designated area at a given time. “Inflation” measures a gradual increase in the price of goods and services in the whole economy.

The Economic Policy Institute has the most realistic cost of living measure. It is a Family Budget Calculator. It calculates a monthly minimum standard of living measured by housing, food, childcare, transportation, other necessities, and taxes.

For example, in the Boston area, a working family of two parents and two children would require $131,028 to meet an “adequate” standard of living.

LISEP calculated an untraditional “True Living Cost” after adjusting for medical care, housing, transportation and technology.

Their cost of living from 2020 to 2021 was 5.8 percent.

Clearly, wages and salaries are falling behind the cost of living for the vast majority of working Americans.

SGS has an untraditional inflation measure that reported a 7.8 percent inflation rate in 2023.

The BLS measure is the Consumer Price Index for the same period and was 4.2 percent.

Consider that the BLS reported this May that consumer prices were up 4.9 percent from April 2022 to April 2023. Real weekly earnings were down 1.1 percent in the same time period.

Clearly, wages and salaries are falling behind the cost of living for the vast majority of working Americans.

Wealth

Economic wealth is generally the total value of assets such as, house, vehicles, buildings, furniture, savings accounts, shares, bonds, minus liabilities such as outstanding debt.

Wealth inequalities are also increasing here to stunning levels.

According to a Congressional Budget Office report in September 2022, the top one percent of households owned 34 percent of the wealth in 2019.

Also, according to a Federal Reserve Bank of St. Louis report this May, the top 10 percent of households held 68 percent of total wealth. The bottom 50 percent of households held only three percent of total wealth.

Summary

Income and wealth here continue to concentrate and centralize in fewer people that translates to increasing economic deprivation.

This economic reality manifests itself in an “economic tree” of social issues. Decreasing or stagnating wages and salaries adversely affect the branches of housing, healthcare, childcare, education, nutrition, transportation, the environment, and retirement for working people.

Moreover, according to a report in April 2022 by the Council of Foreign Relations, such sweeping inequality impedes economic growth and facilitates political dysfunction. This assertion is manifested as large swaths of working people have transitioned to a neofascist Republican Party whose policies do virtually nothing to improve their economic burdens.

With American progressive politicians largely crushed into dust in Washington, it remains to be determined when cosmetic change will just not be enough.

Progressive secular and spiritual organizations appear to be characterized primarily by redundant lamentations as the worsening objective conditions of our economic model continues. Yet, the subjective development of working people to figure out our economic model and effect substantive change is always a possible development.