GRASSROOTS/Hank Kalet

A Recovery for Some

The economic news at the end of January sounded good. The economy was growing, unemployment was coming down and consumer confidence appeared to be on the rise. The sense of optimism within the establishment was palpable.

“Powered by healthy spending from increasingly optimistic consumers,” the New York Times reported, “the American economy is emerging as an island of relative strength in the face of renewed torpor and turmoil elsewhere in much of the world.”

The story goes on to explain that “new government data showed the American economy grew at a decent 2.6% rate in the final quarter of 2014” and that, while the figure was slower than in the third quarter and “modestly below what economists had been expecting,” the news was viewed by economists “in a positive light” who said “robust consumer spending … point(ed) to an improving economy in 2015.”

The story is a bit misleading, however, as the economist Dean Baker points out in his Beat the Press blog (cepr.net). (The Times’ use of “economists,” by the way, creates the misimpression that all of them are saying the same thing, which Baker’s comments make clear is just not the case.) Baker points to several factors that should give pause to people wanting to celebrate an economic comeback.

Baker compares current growth data to past growth data – we are growing at about half the rate of recent recoveries and a third of the rate of China – and outlines the anomalies in the data that should temper any overt optimism: inventory accumulations (likely to be a drag in the future, he says), the lower-than-normal (and lower-than-healthy) savings rate and – key, I think – non-existent wage growth. Baker is not claiming “gloom and doom.” As he says, the “economy is growing, more people are getting jobs and the labor market is tightening.”

“But the reality is that we still have a far way to go to make up the damage from the downturn and the pace of improvement remains very slow,” he says. “The ‘happy days are hear again’ stuff is just another story of irrational exuberance.”

We really need to ask what a healthy economy looks like – to ask whether all we care about is modest GDP growth or whether we can say the economy is healthy when large swathes of the American public continue to feel the economic pinch. Consider a separate government report issued the first week of February. According to the US Census Bureau, about 20% of children in the USA received government food aid in 2014 – or 16 million children, which is nearly double the pre-recession figure. The same week, the US Department of Housing and Urban Development issued a report showing that what it calls “worse case housing needs” may be receding, they remain at near record levels. About 7.7 million rental households faced “worst case housing needs” – defined by HUD as households “below 50 percent of the Area Median Income” but who “do not receive government housing assistance and who pay more than one-half of their income for rent, live in severely inadequate conditions, or both.”

And then there is wage growth – or the lack thereof — as the Market Realist blog points out:

“While hiring has picked up speed, wages continue to stay tepid,” Russ Koesterich writes on the blog. “Private sector jobs have increased by 10.5% since the US economy exited the recession caused by the 2008 US financial crisis in 2010. In contrast, average real wages grew by a meager 0.7% between 2009 and 2014.”

So, while we are looking at a recovery in the broadest terms, it remains fragile and – significantly – its reach is limited. And, from my perspective, it is the reach that is most important. For too long, we have viewed our economy through the expensive lenses worn by those in the corporate suites, a group that generally considers so many of us as expendable and those lacking specific skills or facing impediments as lacking intrinsic value.

Instead, we need to start viewing our economic health through the lenses of those most in need, to value those who are struggling and to ensure they have what is required to do more than just survive. They deserve more than a chance. They deserve a life.

Hank Kalet is a poet and journalist in New Jersey. Email grassroots@comcast.net

From The Progressive Populist, March 1, 2015

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