There’s ample evidence that it’s happening. Last August, the Dallas Federal Reserve found that over calendar year 2021, “nominal earnings grew 7.7 percent [for low-earners], compared with 4.8 percent for mid-earning workers and 3.6 percent for high-earning workers.” While lower-wage workers were disproportionately affected when covid-19 shut down the economy, when it started to reopen, the job market was tight, so employers had to pay more to attract workers. Lower-income workers benefited the most.
As Jared Bernstein, a member of the White House Council of Economic Advisers, tells me, “When the economy sniffles, folks at the bottom catch pneumonia.” Now, he says, the opposite is happening: Those at the bottom are getting an extra boost.
It didn’t happen by accident. Biden’s American Rescue Plan kept businesses from going under and prevented families from being evicted or going hungry. That meant employers were ready to hire when, thanks to the coronavirus vaccination program, people felt safe returning to work.
Disproportionate gains for lower-income workers continued throughout 2022. And at the end of the year, the Wall Street Journal reported, the median weekly earnings for all workers were 7.4 percent higher than they were compared to a year before. Wage growth outpaced the year-to-year inflation rate by the end of 2022.
Moreover, the Journal reports, “For some workers, the gains were even larger. The median raise for Black Americans employed full time was 11.3%, compared with the prior year. … The bottom 10th of wage earners — those that make about $570 a week — saw their pay increase by nearly 10%.”
Likewise, the Atlanta Fed’s wage growth tracker shows over the past year, the largest increases in median wages were among workers in the lowest and second-lowest quartiles of earners, at 7.2 and 7.3 percent respectively. For those in two higher quartiles, wages grew at 5.9 and 5.0 percent.
This occurred before the full impact of Biden’s major legislative achievements, specifically the infrastructure program and the Chips Act, had been felt. In keeping with Biden’s outlook, these programs are structured to continue helping lower- and middle-income workers.
The Transportation Department, for example, notes that a majority of the jobs created by the infrastructure bill will not require a college degree, which would include “historically disadvantaged workers” and “workers in distressed areas.”
The same is true for the new jobs created by the Chips Act. The New York Times reports, “Already, unions in Ohio are ramping up training and apprenticeship programs that are explicitly favored by the federal semiconductor legislation, the CHIPS and Science Act, and reaching out to women, teenagers, veterans and other workers who have traditionally been outside the organized labor movement to prepare for the semiconductor work.” Mark Muro, a senior fellow at the Brookings Institution, tells the Times, “There are going to be significant numbers of noncollege jobs and a real opportunity for the economic inclusion of noncollege workers.”
The administration’s challenge going forward will be to maintain job and wage gains by implementing the agenda already passed and keeping downward pressure on prices. The administration is all too aware that inflation can eat into wage growth and that the economy could slip into a recession. But media outlets are finally acknowledging that a “soft landing” is doable. As a Times headline puts it: “What Recession? Some Economists See Chances of a Growth Rebound.”
The available data suggests Biden actually is making good on his “bottom up, middle out” vision. According to the monthly employment survey numbers, of the 11.5 million private-sector jobs created under Biden, 9.3 million — or 81 percent — were blue-collar manufacturing jobs or nonsupervisory service jobs.
It was telling that in her response to Biden’s State of the Union address, Arkansas Gov. Sarah Huckabee Sanders ranted about hot button cultural issues with few words devoted to Republicans’ economic agenda. She mentioned “jobs” once: “Republicans believe in an America where strong families thrive in safe communities, where jobs are abundant, and paychecks are rising.”
No comments:
Post a Comment