While many celebrate low unemployment, some economists worry about high poverty and low purchasing power in America.
For anyone within earshot of television news over the last six months, it should be no surprise that the U.S. is boasting an incredibly low unemployment rate in 2019. In fact, it is at a 10-year low and has been on a steady decline since 2010, but the debate is still up in the air as to whom the success should be attributed. The figure has been cited as an indicator of a successful economy, but there is a discrepancy as to the truth in that.
Additionally, economists have recently started raising concerns as to whether another recession looms on the horizon, a sentiment directly antithetical to the success boasted by the president. Ultimately, it is up to interpretation whether the economy is thriving or not, and even that may be biased by perspective. Here are some of the factors being talked about now.
More people are working, but they aren’t making more money.
A 2018 study from Pew research found that while average hourly wages have been rising in the U.S. for years, the purchasing power of that money has been stagnant for decades. What this potentially entails is that any economic prosperity that the country has felt might not be impacting much of the population. In fact, the study suggests that the purchasing power of wages is very close to the same as it was 50 years ago, meaning that a 40-hour work week now does about the same for a person as it did during the first year of the Nixon administration.
We may be heading into a recession.
Concerns have also come up recently as to whether economic growth in the U.S. is about to come to a screeching halt. There have been a few scary days in 2019 where the Dow dropped significantly, including a 950 point plunge in August attributed to the potentiality of a trade-war with China. The immediate cries of terror included a few voices predicting a transition into a bear market (consistently falling over time, as opposed to the antithetical bull market), but disregarding the prompt outcries, there have been economists warning of a recession on the rise both before and after the August scare and other similar newsworthy declines.
Many Americans still live in poverty.
Perhaps the most scathing criticism of the low unemployment rate, the portion of Americans living in poverty is not doing well to wane. The number of people living without healthcare rose by 1.9 million from 2017 to 2018 and 4.3 million children were recorded as without healthcare in 2019. The overall number of people living in poverty did drop about 3.5 percent from 2017 to 2018 (NPR), but the proportion of Americans living in poverty was still around one person for every eight.
It need not be said that a low unemployment rate is a good statistic to tout as a nation, but critics have been quick to point out that it is not the only indicator of economic success, nor is it strong enough to assuage fears of a recession. Although most would likely say the low level of unemployment is good, the biggest criticisms appear to be that the economy is not working for everyone, or rather that the growth could be more evenly distributed. Only time will tell if the visions of said recession come into fruition, it is simply important to note that the pleasant empirical data is not immune to scrutiny.