New Orleans I’m still trying to make heads or tails of the US economy these days. Everyone I talk to has a beef, whether about rent, gas, food, or whatever, and they’re head scratching, even as the prices go down. All of our organizations are trying to figure out how to handle wages and navigate the storm, whether Canada, UK, or France. We have to do something, but have trouble feeling that the ground underneath us is solid.
Then I read that in the USA, this is a bottom-up recovery and that “low-income households are bouncing back better from the Covid-19 crisis than more-affluent ones.” Looking at median wage growth the argument in the Wall Street Journal wrote that despite increased prices and interest rates, “poor and working-class Americans appear to be not only holding their own in this environment, but perhaps doing better.” The reasons, coming off the pandemic, they argue are two-fold: significant governmental monetary injections right into bank accounts and increased wages due to the worker shortages for jobs available. The Atlanta Federal Reserve found that over the year, wage growth for the bottom fourth of workers increased by 7.3% compared to the top quartile at only 4% for workers. In short, inequality was decreasing, even as a potential recession was looming on the horizon. In another chart from December 2019 to July 2022, workers and families at the bottom quarter in an inflation-adjusted measure of labor income saw a 12.8% bump compared with the top quartile only rising 5% during that period.
This is good news, but why don’t we see people doing a happy dance? Biden’s ratings are up, but everything still feels shaky, and that may be why workers and lower income families aren’t feeling it.
Another reason may be that their employers are pushing back. We may be organizing more, but Starbucks hasn’t settled, Amazon seems to be digging in, and in general bosses are trying to retake ground. Wage increases are moderating more recently. Another Journal piece noted that employers have “productivity paranoia” and are pushing people out now that their staff counts are where they want, even as workers have been trying to draw the lines. Big companies like Walmart and even Amazon are announcing decreases in end of year employment, expecting consumer demand to fall.
With midterm elections a month away and absentee ballots already moving out, somehow folks need to align their feelings with the facts, while all of us try to see if there’s hard rock under these shifting sands.