The news on the economic recovery is mixed. One very good piece of news is that the number of jobs created already surpasses those lost during the Great Recession. The other, quite concerning, indicates that 44% of those created are lower-wage jobs, a sector which lost 22% of its jobs starting during the 2008 crisis.
This recent analysis by the National Employment Law Project confirms recent reports on the economic recovery and the devastating effect it is having on the middle and upper middle class.
The vast majority of jobs lost (78%) took place among workers earning between $13.73 and $32.62 per hour, while most jobs created are in the services and retail sectors, with wages between $9.48 and $13.33 per hour. This sector now employs 1.85 million more people than it did before the recession.
The recession had a tremendous impact on the labor market, and part of the private sector seized the moment to reinvent itself and operate with fewer employees. Among other things, this led to a business sector with coffers full of cash and an unfavorable labor market for workers.
Beyond the iniquities, we are concerned by the fact that the economy’s main driver of growth is the lower-wage sector, reducing the purchasing power of Americans.
It is wrong to think that the consumption of the wealthiest sector of society, which is shrinking in size, is enough to create an internal demand capable of driving an economy with healthy growth in a stable political system.
The idea of the poor full-time worker who must seek out public assistance is aberrant because his or her company has the resourcesin the form of benefitsto take care of its employees.
Given this situation, the push to raise the federal minimum wage is comprehensible, even when the cost of raising the incomes of 10 million people could mean the loss of half a million jobs. The millions that would benefit would strengthen the economy with greater purchasing power, helping it achieve more stable growth.