We continue our Poverty Series in this installment about the greater economy.
Americans aren’t feeling the end of the recession. There is a very real fear that Americans, especially in certain parts of the country are feeling like they are simply being left behind. And this has dire political consequences for the Left.
One of the problems with the way President Obama handled the Great Recession was the lack of help for everyday Americans. Congress spent $700 Billion on relief for banks while Americans got cash for clunkers and very little mortgage relief, job re-training, or other domestic investments. For regular Americans, there was little to combat the sting of the recession. Hundreds of people stood outside looking for work at places hiring for a handful of positions. People lost homes and even were pushed out of rental properties when the banks foreclosed on their landlords. Retirement accounts evaporated overnight on paper and for those getting ready to retire it was a dire situation, especially if they were counting on high housing prices. The economy changed radically after 2008. Companies eliminated positions and reduced offices to skeleton staffing, a trend that has continued well into the present time.
No Social Safety Net
In this global recession, people living in European countries took a deep breath and relied on their solid social safety nets to survive. However, the situation in the US with its lack of a social safety net meant that often people had nowhere to turn. The Federal government extended unemployment for 5 years from 2008 to 2013 to prop up people who were still looking for work. However, this left a budget shortfall for many Americans as the unemployment cheques did not live up to all the bills. Many Americans were cycling through bills deciding what to pay when and juggling expenses and figuring out how to survive in a new economy that no one understood.
Sped Up Economic Changes
Much of the economic changes that we now live with as normal like low staffing, temporary contracts, and an increase in automation of jobs started before 2008, however, the recession sped up these trends to lightning speed and left regular working people in the lurch. 2008 gave rise to the gig economy where workers are essentially their own employer getting leads for work from platforms like Instacart, Uber, Lyft and other such services.
Most Americans have traditionally gotten social services like healthcare and retirement from their employers, that has changed in the modern economy. For many Americans, this is still the case but the trend is slowly moving away from that. While 71% of Americans have access to a 401k plan from their job, that does not mean that is matched by the employer or that people can afford to put money into the plan without adversely affecting their lifestyle or even their ability to survive. In an economy where 80% of Americans cannot afford a $400 emergency expense, that does not bode well for an individually planned retirement.
Given these economic conditions of low wages, no retirement, fewer and more expensive benefits, how is anyone reasonably expected to get ahead? That is the question on the mind of many Americans. Many people now feel like they are merely treading water. They are saying afloat but they aren’t getting anywhere. For the first time in generations, younger Americans will not likely do any better than their parents. This is especially true for people in poorer areas of the country where the global economy has left them behind. The major employers have long gone, the job centers are on the coasts and there are few opportunities.
This insightful video illustrates the point perfectly.
Americans are falling behind and it’s long past time for policymakers to do something about it. America needs to learn the lessons of having a solid social safety that truly raises all boats for everyone and actually solves the social ills that we have in this country. The problem is not intractable. It takes vision and political will. Further inaction will be deadly for the country long-term and it’s people.