The Needs of Working Folks

Mobile Share Email Facebook Twitter LinkedIn

“The economy” was the top priority for the vast majority of American people in one poll last summer. Surely, what they were talking about was quality jobs and economic and financial security for themselves and their children.

Or as my brother, a father of three and service manager at an auto dealership outside Chicago, put it in a recent text message, “No one can afford anything anymore.”

This simple idea seemed to resound throughout the primaries and long presidential campaign. With the election over, I compiled the following wish list for working people based on what the polls and research studies reveal about what they are hoping for.

Good jobs. The disruption created by the transition from an industrial to a service economy has hollowed out the middle over three decades. Despite a remarkably low unemployment rate of 4.9 percent, middle-skill workers face a dilemma: there are a lot of jobs, but most aren’t the right jobs for them.

Consider this detail in the October jobs report. Retail employment increased by a total of 38,000 in August, September, and October. These jobs pay, on average, $553 per week. Meanwhile, 12,000 goods-producing jobs were lost during the same three months, meaning that fewer people are earning industry’s average weekly wage of $1,100. The urgent question is, what are the potential jobs that will bolster the middle class?  Healthcare and telecommunications technicians for the New Economy?  A related question is, what are the vocational and policy paths to securing better-paying jobs?

Cash on hand. Working Americans are severely strapped for cash. One in three surveyed by the FINRA Investor Education Foundation said they probably could not come up with $2,000 to cover an unexpected expense in the next month, and nearly half said they can’t pay off their full credit card balances every month. While working people are benefiting from the stronger economy, Finra concluded, “large segments of society continue to face financial difficulties, particularly minority populations and those without a college education.”

Affordable healthcare.  Constantly rising healthcare costs are really starting to eat into the average worker’s paycheck. After years of increasing premiums and deductibles in employer health insurance plans, the Commonwealth Fund, a healthcare advocacy group, reported that they now absorb 10 percent of the average worker’s earnings. Premiums for mid-level health plans purchased through state insurance exchanges established under the Affordable Care Act will also rise by 25 percent next year, straining some household budgets despite the federal tax subsidy. Some economists have argued that surging health costs are one force that is widening the U.S. inequality gap.

Help for Families.  Day care for one infant exceeds $10,000 per year in 20 states, putting working parents in a financial bind. One can argue about how or whether this should be addressed by new policies – there is already a federal childcare tax credit – but the bottom line for two-earner parents in this country is that they pay twice what their counterparts pay in Germany, Australia, Sweden, Denmark, France and Greece. (Taxes, however, tend to be higher in these other countries.)

Student loan relief. Many young adults are feeling unprecedented financial strains as they carry the albatross of student loans and credit card debt with them into the work world. One telling piece of evidence: unprecedented numbers of millennials have moved back home with their parents.

Parents who should be saving for their own retirement sometimes choose to share the burden of student loan payments with their offspring. Although there is no solid research to document whether this is prevalent, there is anecdotal evidence. One hint of the college-retirement conflict: the Social Security checks of a small but growing number of baby boomers are being garnisheed to pay back federal student loans.

Secure retirement. More than half of working Americans – from millennials to baby boomers – are at risk of a lower standard of living in retirement. The myriad reasons for this include gradual reductions in Social Security benefits and the 2006-2008 housing market boom and bust. Research also highlights the inequality in a U.S. retirement system oriented around 401(k)-style savings plans. One study found that only 12 percent of low-wage older Americans participate in a retirement savings plan at work, often because their employers do not offer a plan. A related issue is the growth of the nation’s contingent labor force – think Uber drivers, freelance writers, and independent contractors – to about 16 percent of all workers. Many of these workers are not attached to a single employer offering traditional employer benefits.

The economic indicators tell us the United States is not in a recession. Many working people feel otherwise.

Squared Away writer Kim Blanton invites you to follow us on Twitter @SquaredAwayBC. To stay current on our Squared Away blog, please join our free email list. You’ll receive just one email each week – with links to the two new posts for that week – when you sign up here.      

3 comments
Ken Pidcock

“The disruption created by the transition from an industrial to a service economy has hollowed out the middle over three decades.” Financialization of American enterprise hasn’t helped. Read Rana Foroohar’s Makers and Takers on this.

Chuck Miller

From CNNMoney (October 5)…

“Working class white men saw their income drop 9% between 1996 and 2014, according to a new report from Sentier Research. This group, who Sentier defines as having only a high school diploma, earned only $36,787, on average, in 2014, down from $40,362 in 1996.”

This is the group that was formerly union workers, and have suffered the most with the decline in union jobs.

Nancy

I object to the second sentence in this posting. I would like to see evidence for the conclusion reached. “Surely” to whom? If we have learned anything from this chaotic election turmoil, is that we don’t necessarily KNOW what people mean by what they say, particularly when expressing broad discontent. Some data seems to show it is not actually finances, but what many consider the breakdown of social norms that is at the root of so much anger and distress. That all somehow gets lumped in with loss of “good jobs.” And, surely, finances may be at the root of behaviors unsettling many Americans. But I think we are in a good deal of trouble because of loose definitions. Surely, nothing. Let’s see data.

Leave a comment

Your email address will not be published. Required fields are marked *. The Center for Retirement Research does not post all comments and may edit some for clarity or brevity. For more details on our reader comments policy, see here.