Here we are in the sixth year of a recovery. The economy grew at 4 percent in the second quarter of this year, matching the fastest growth in a decade. The Labor Department reported Friday that there were 209,000 new jobs in July, the sixth straight month of 200,000-plus jobs, the first such streak since 1997.
So in the middle of what finally looks like a strong recovery, why do things feel so bleak?
According to Gallup’s weekly survey of economic confidence, public opinion hit a low for the year last week, and the trend has been downward since December.
There are several explanations for this. Consumer confidence is a lagging indicator that climbs and falls in response to other events. There also seems to be some politics involved, with Republicans taking a much darker view of the future than Democrats.
But an undeniable fact is that while the economy is growing, it is not growing for everyone. Most of us are recovering from not just the Great Recession, but also decades of stagnant wages.
A recent Russell Sage Foundation analysis found that in inflation-adjusted dollars, the median family was 20 percent poorer in 2013 than the median family of 1984. The bottom 25 percent of households – which didn’t have much to begin with – fell even further and controls 60 percent less wealth than it did in 1984. Meanwhile, the top 5 percent has seen a 100 percent increase in wealth in the last 30 years, and has recovered much more quickly than any other group from the financial collapse.
Those numbers should give a strong indication as to which direction the wealth of this nation has been redistributed under the economic policies implemented in the Reagan revolution.
For these last three decades, we have been promised that growth is good for everyone and that “a rising tide lifts all boats.” But that hasn’t been true even in the good times, and when the business cycle bottoms out, people at the bottom fall further and recover more slowly than the people at the top.
This is a result of government policy and won’t change without intervention.
Raising the minimum wage high enough to bring anyone with a job out of poverty is a good place to start. Extending subsidies for health care and higher education to share opportunity more equally is also important. Public infrastructure projects that would put people to work and pump money into the economy should not be put off any longer.
With 70 percent of our economy based on consumption, it is wrong to expect people struggling to provide the basics for their families to give the economy the vitality it needs to soar.
We have been waiting six years for the turnaround. If this is as good as it’s going to get, it’s easy to understand why people don’t feel rosy.