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Unemployment might be at a rare low—but the jobs situation in America is disastrous
‘Employment’ doesn’t necessarily mean full-time work, living wages, or benefits.
Historically, when voters think of a healthy American economy, they look for two indicators: a high stock market and low unemployment. These two factors, however, don’t paint a full picture of people’s work and financial experiences in 2018. The irrelevance of the stock market is obvious because most Americans don’t own stock; 10 percent of Americans own 84 percent of all stocks. Upon closer inspection, the actual value of low unemployment numbers is just as suspect.
This week, a record low unemployment rate of 3.9 percent was announced by the Bureau of Labor Statistics; the rate hasn’t been consistently under 4 percent since the 1960s. If you aren’t feeling particularly cheerful upon hearing this news, you aren’t alone. There are a number of disturbing trends that have made so much about the American economic experience tenuous, even as the unemployment numbers seem to perpetually improve. Here’s why you’re probably not reaping the benefits of a low unemployment rate right now:
No full-time jobs
While most people have jobs, most people do not have the jobs they want. This isn’t to say that people aren’t working in the field of their dreams, or the one they went to school for. No, many people would just like to have a full-time job but they don’t.
The People’s Policy Project, a progressive think tank run by left-wing policy analyst Matt Bruenig, recently published an article asserting that only 1 in 3 Americans work full time.
before your MAGA friends flood your facebook feed with the unemployment rate under 4%.. show them this chart. pic.twitter.com/y4f8coBHvK
— ALT- Immigration 🛂 #NoPayNoWork (@ALT_uscis) May 4, 2018
These numbers are even more upsetting when we remember that many employers responded to the passing of the Affordable Care Act—which mandated that those who work more than 30 hours a week must be offered insurance through their employer—by cutting back on staff hours. The United States, of course, remains the only industrialized nation to have a private, employer-based healthcare system.
The rise of independent contractors
Many companies have responded to compulsory benefits by making their employees independent contractors. In May 2015, 15.5 million workers were classified as independent contractors, and by 2020, that number could balloon to 60 million.
Huge startups like Uber and Lyft classify their workers as independent contractors, even though many drivers spend their entire day in a car with a giant Uber sticker plastered to their window, picking up customers who use the Uber app. It’s hard to see what’s “independent” about that.
It isn’t just the gig economy startups that are exploiting workers, though. Local papers are filled with stories of misclassified employees, like the truck drivers at the port of Long Beach, California, who were reportedly paid so little, some even ended up owing the company money.
Independent contractors not only don’t receive benefits, but they also aren’t subject to a variety of rules that protect workers. Minimum wage and overtime laws often don’t apply. An independent contractor generally bears the burden of maintaining any equipment or uniforms. Come tax time, independent contractors can end up paying significantly higher rates.
Among those who do have full-time work and are not classified as independent contractors, benefits are still disappearing. If you are following the various teachers’ strikes around the country, you will see that their battles are as much about benefits as they are about pay increases. Pensions and healthcare plans are under attack by austerity-minded politicians.
Public employees aren’t the only workers who are losing benefits. As union density has decreased in America, workers are not being offered the same quality healthcare, and pensions are being replaced by 401Ks that are rarely matched by employers. When there is no collective bargaining, less common benefits like childcare or tuition reimbursement often aren’t even on the table.
Add to that, the fact that the average American takes less vacation time than a Medieval peasant—and work life in the U.S. looks obscenely depressing.
Perhaps fewer hours and benefits cuts would be easier to endure if wages were growing, but it’s been decades since wages kept up with inflation. Numerous economists have estimated that if the minimum wage had kept pace with America’s growth in productivity, it would be over $21 an hour. Half the jobs in America pay less than $18 an hour.
We are not at full employment until the gig economy disappears, everyone gets benefits and taskrabbit becomes a dystopian joke.
— David Atkins (@DavidOAtkins) May 7, 2018
Where has the money that used to go to workers gone? It has gone to the owners and shareholders. Labor’s share of income—the money that goes to workers—was 65 percent in the ‘70s and 57 percent in 2017. As corporations grow larger and consolidate, competition for workers continues to decline. With the advance of the internet, competition for work increases. These trends don’t show signs of slowing, and many agree that this will lead to continued wage stagnation.
As the situation for workers has gotten worse, the situation for companies has gotten a lot better. Corporations from all over the economy, from automobiles to technology to sports teams to Walmart, now foster bidding wars when they plan on setting up new locations. In a globalized economy, every new factory or headquarters means a potential fight.
These bidding wars mean that municipalities increase the tax burden on their citizens by incentivizing these companies to come to their city with tax breaks and offering infrastructural improvements that the taxpayer ends up paying for. For example, though many Amazon employees rely on food stamps, the new company headquarters will likely land in a city that offers the tech giant generous tax breaks. When companies don’t pay taxes—70 percent of corporations in 2012 paid no federal income tax—that burden is passed on to individuals.
It is also important to note where, and for whom, the unemployment rate is 3 percent. In Flint, Michigan, the unemployment rate is over 9 percent. It is just under 10 percent in Bakersfield, California. The unemployment rate for Black Americans is more than double that of white Americans. Hispanic women only make 54 percent of what white men make.
When we consider the unemployment rate, we should always remember that when we talk in national numbers, those numbers never translate evenly among various communities.
Why you should care
With the knowledge that the unemployment rate doesn’t speak to the quality of jobs or the progress of wages, nor does it apply evenly across various communities, you have to wonder how much unemployment matters. What is the value of the sheer number of jobs, if teaching opportunities and union auto jobs are being replaced with part-time work at Amazon fulfillment centers or the Uber night shift?
If those with supposedly good and secure jobs are being asked to sacrifice wages and benefits with each passing year, how can you say the economy is improving? If a job doesn’t allow you to make ends meet, then are these jobs that should count toward this total?
Despite this rosy picture painted by these unemployment numbers, you might be feeling like things aren’t going well. And you would be right. For many Americans, low unemployment numbers don’t equate to anything but a few eye-rolls and head-scratches.
Brenden Gallagher is a politics reporter and cultural commentator. His work has been published by Motherboard, Complex, and VH1. He’s the co-founder of Beer Money Films, an indie production company. Based in Los Angeles, he works in television drama as a writers assistant.