Though the news this week is of the election of Pope Francis and what this means for the Catholic Church’s Legacy following the resignation of Benedict XVI, I want to focus on the big news last week. Last Thursday, the Dow Jones Industrial Average hit the astronomical all-time high of 14,253.77, and has continued breaking records for nine straight trading days. Then came news that Friday that the economy added 236,000 jobs in February, dropping the unemployment rate to 7.7%, the lowest number since the December 2008.
These are welcome numbers for economists, investment bankers, Goldman Sachs CEOs, and of course, the Obama Administration, but what does the uptick mean to the average American and his or her job security and pocketbook?
Let’s start with the positives first. If a person had invested in the stock market, or at least had a 401(k), they probably lost a great deal of money during the financial crisis; money that has either in part or in full been restored to pre-recession levels. Secondly, the drop in unemployment has been largely due to gains in construction, retail, manufacture, and over 32,000 jobs from healthcare alone (thanks, Obamacare!) One of the most notable gains has to be in the housing market, which is finally seeing growth since its near collapse in 2008. While this growth has been quite slow and long overdue, I have to admit, as the Beatles would say, it’s getting better.
Now, on to the negatives. I’m not going to be one of those doom-and-gloom prophets who claimed that this was all smoke and mirrors or, even worse, politically motivated (we’re looking at you Faux-I mean-Fox News Channel). I’m still a supporter of President Obama’s economic plans, maybe even more so since fastest land mammal and current conservative heart-throb Paul Ryan put out a new budget, showing his adroit skill with the “copy/paste” function on Microsoft Word by replicating his 2012 budget whole cloth, (not to mention the newsworthy Freudian slip that undermined the whole budget presentation).
That being said, now is not the time for us liberals to break out the rose-colored glasses, especially since better times are coming during a Democrat’s tenure in the White House. It’s time to remember what that success is built on, and whether this success will remain sustainable to an already-squeezed middle class.
First, let’s dissect the Dow Jones Industrial Average (disclaimer: I am not an economist, but I do play one on the Internet). It is an average of 30 of the top American companies, their importance decided upon by, well, Dow Jones Industries. Google is not on Dow Jones. Neither are some of the newer, bigger hitters in the financial games.
While the Dow remains a great indicator of financial health, it’s not some magical number linked directly into economic well-being. It’s worth noting the Dow had some of its biggest gains during the Great Depression and Great Recession, and many of our financial gurus use, along with the Dow, the Standard & Poor’s 500 (which is also getting ready to set a record), and the Gross Domestic Product in factoring in the direction of the American economy (both of which have been good, but much more modest).
Secondly, let’s look at those job numbers. We cannot deny the fact that there has been a steady growth in new jobs for over 36 months. Despite the positive trajectory, many, including Hispanics, blacks, and young adults, have not shared in the prosperity. Secondly, the types jobs that have returned to the economy are low-wage or independent contracting jobs, leading to a “hollowing out” of the middle class. With these jobs come unreliable part-time hours, little to no benefits, and continue the trend of more and more Americans living paycheck to paycheck.
And while the American worker may remain on the ropes, corporate welfare, in the form of huge tax breaks, land grants, and lax regulations have made the recovery more and more advantageous for Big Business. This is expected to only escalate with more states singing the “Right to Work” chorus, trading in financial stability and tax revenue for a handful of menial jobs that don’t pay the bills.
There are, of course, solutions: raising the minimum wage, seeing through on full enactment of the Affordable Care Act next year, and creating educational opportunities to train Americans for tomorrow’s labor needs (especially women). But all of this stands to be stymied by further political gridlock: furloughs and layoff due to the current sequestration, a possible government shutdown at the end of the month, and a Republican Party so steeled in its resolve against the current president that they are willing to cut off the nation’s nose to spite its face.
In closing, we should take pride we have come this far since the financial crisis, but let’s not rest on our laurels. We still have a long way to go…
Image source: JWSpeakersAgency.com