The Lousy December Jobs Report and the Scourge of Inequality

The U.S. economy created a measly 74,000 new jobs in December, and a smaller percentage of working-age Americans is now employed than at any time in the last three decades (before women surged into the workforce).

What does this have to do with the fact that median household incomes continue to drop (adjusted for inflation) and that 95 percent of all the economic gains since the recovery started have gone to the top 1 percent?

Plenty. Businesses won’t create new jobs without enough customers. But most Americans no longer have enough purchasing power to fuel that job growth.

That’s why it’s so important to (1) raise the minimum wage at least to its inflation-adjusted value 40 years ago — which would be well over $10 an hour, (2) extend unemployment benefits to the jobless, (3) launch a major jobs program to rebuild the nation’s crumbling infrastructure, (4) expand Medicaid to the near-poor, (5) enable low-wage workers to unionize, (6) rehire all the teachers, social workers, police, and other public service employees who were laid off in the recession, (7) exempt the first $20,000 of income from Social Security payroll taxes and make up the difference by removing the cap on income subject to the tax.

And because the rich spend a far smaller proportion of their earnings than the middle class and poor, pay for much of this by (8) closing tax loopholes that benefit the rich such as the “carried interest” tax benefit for hedge-fund and private-equity managers, (9) raise the highest marginal tax rate, and (10) impose a small tax on all financial transactions.

One of the major political parties adamantly refuses to do any of this, and the other doesn’t have the strength or backbone to make them.

Make a ruckus.

This piece is cross-posted from RobertReich.org with permission.

2 Responses to "The Lousy December Jobs Report and the Scourge of Inequality"

  1. cadabra1   January 14, 2014 at 9:47 am

    The curious thing is that the growth in income inequality that started in the late '70s has never become a politicl issue. We continue to elect right wing conservatives, especially in the states with the largest income disparity.

    There is also the problem that the growth of the middle class after World War II was an historical anomoly. It seems that we are returning to the level of income distribution that existed prior to World War II. Some economists, e.g. Lester Throw (sp?), have commented that an advanced incustrial economy could be maintained by solely catering to the needs of the upper-middle-class. Prof. Reich commented in his book, Work of Nations, that it was the upper twenty percent of income earners against the lower eighty percent. It seems that public policy is moving in the direction of lowering or eliminating the social safety net for that lower eighty percent, as existed prior to Roosevelt's New Deal. Yet, this too has not become a political issue.

    Americans don't compare themselves with the economic elite, they compare themselves with their neighbors. Generally, Americans seem to feel that if their well-being is comparable with their neighbors, then they don't seem to have aspirations beyond that.

  2. nmmaier   January 14, 2014 at 8:38 pm

    You can always count on Robert Reich to weigh in with a laundry list of BIG GOVERNMENT solutions. The reason we are not creating jobs is BECAUSE of BIG GOVERNMENT. High taxes, manipulated interest rates, and government deficits as far as the eye can see.

    The only idea of Robert Reich that has merit is the elimination of income taxes and social security taxes for employees and employers that if that unemployed person would take a job.

    Everything else he proposes will destroy jobs and make things worse.