The constitutionally mandated State of the Union address opened Feb. 4 with the first of many boasts: “Jobs are booming, incomes are soaring, poverty is plummeting.” Trump went on with the lie, “The average unemployment rate under my administration is lower than any administration in the history of our country.”
Actually, the current unemployment rate is 3.5 percent, greater than the 2.5 percent in 1953 under President Dwight Eisenhower, when the U.S. war on Korea stimulated the capitalist economy. But that’s not the worst distortion the president made. The real question is the ability of the new jobs to provide an adequate income.
While the unemployment rate has gradually declined over the last 10 years, the number of high-wage jobs has declined and the number of low-wage jobs has increased. Pay for high-wage jobs is defined as above the median wage of around $15 an hour; low-wage jobs pay below that median.
While Trump’s tax cut gave a tremendous trillion-dollar boost to the incomes of the wealthy, some 38.1 million people still live below the federal poverty threshold in the U.S. As per the U.S. Census Bureau, that was $25,465 for a family of four people in 2018.
Researchers associated with Cornell Law School, together with some liberal think tanks, have established an index that associates a weekly wage above the median with high-quality jobs and a weekly wage below the median with low-quality jobs. They compute the weekly wage as the hourly wage times the number of hours worked.
Using government data and studying production and nonsupervisory jobs, researchers have determined that high-wage jobs provide an average workweek of 38.26 hours and low-wage jobs provide an average workweek of 29.98 hours. Note that the law protecting benefits, such as health insurance and retirement income, applies only to those who work 30 hours or more.
These researchers say the lower average workweek in low-wage jobs reveals an enormous “slack” in the total number of jobs seen as available — and that’s a weakness in the economy. They calculate that if these 60 million low-wage workers, who are now underutilized, worked the same 38.26 hours weekly as high-wage workers, this would translate into 12.6 million more jobs at 38.26 hours weekly. (Pamphlet available at www.jobqualityindex.com.)
The official unemployment rate hides these 12.6 million missing jobs that would exist if the capitalist economy was really thriving. This analysis explains why so-called “full employment” has actually meant weak wage growth. There is a lot of slack in the job market; 12.6 million full-time jobs are needed to absorb the “reserve army of labor” stuck in part-time work.
Moreover, workers who are in unstable or precarious jobs — many of whom are Black and Latinx workers and women workers — are in a difficult position to demand more pay. Difficulties in union organizing of precarious workers have kept wages down. And the gig economy includes more than 57 million U.S. workers, or 36 percent of the total workforce, which plays a big role in keeping wages low. (Forbes, Aug. 31, 2018)
What is even more shocking is that 40 percent of all young workers — between the ages of 26 and 32 — do not know from one week to the next what their hours will be.
The Fight for $15 per hour, which unions have been waging, has led a number of states and cities to increase their local minimum wage. These increases have boosted the national income figures for low-wage workers, which Trump’s boasting ignores. The federal minimum wage has been $7.25 an hour since 2007. To no one’s surprise, Trump’s State of the Union speech made no mention of raising it.