Bruce T. Boccardy: Report Card on the Economy for Working People
December 29, 2022
By Bruce T. Boccardy
Corporate Message
Corporate media sources routinely report distorted and truncated views of the economic conditions affecting working people. Their message never raises questions about the structure and process of our economic model.
Indeed, there are the predictable faux lamentations and regrets from corporate Democrats who are blithely indifferent to the soul draining of working people by that economic model.
The next step in this dance is to gush on about how spectacular the Biden administration has addressed the issues of working people.
Certainly, the administration has implemented policies benefitting working people in comparison to the Trump administration. However, that is a pitifully low bar.
A review of the most consequential campaign promises by the Biden administration manifest the obvious; the interests of corporate donors take precedence over the list of crucial issues affecting working people.
Corporate Censorship
Republicans are shamelessly active in passing legislation that restricts dissenting views. Censoring critics that debunk their assertions is high on their neofascist agenda.
The right to report accurate economic numbers must be protected.
Thomas Jefferson wrote in The Papers of Thomas Jefferson in 1816:
“Bigotry is the disease of the ignorant, of morbid minds; enthusiasm of the free and buoyant. Education and free discussion are the antidotes of both.”
Message Domination
The basis of societal constructs is the economic model of that society. The constructs are politics, culture, education, health, recreation, housing, environment, transportation, and food security. Each one is a result of power relationships in that economic model.
Oligarchs throw barrels of money at politicians and wield perverse financial control of the mainstream media to promote their “free market” or ideology of “neoliberalism.”
Throw in a cynical bevy of scapegoats to distract working people from the actual cause of their economic discontent and the result is “Trumpism.”
However, beneath the surface noise, chattering and distractions are real numbers that cannot be disguised.
Our economic model is a result of historical forces that must be addressed or as Dorothy Day, founder of the Catholic Worker movement opined:
“If you feed the poor, you’re a saint. If you ask why they’re poor, you’re a Communist.”
Periodic reports that present the actual economic numbers are essential for working people. They must recognize smart political remedies that are available and how to implement them.
Economic Categories
Unemployment-F
1.The Ludwig Institute for Shared Prosperity (LISEP) is a nonprofit organization that reports economic research to understand the economic burdens of middle and low-income families.
LISEP tracks data from the Bureau of Labor Statistics (BLS). They report the percentage of the labor force that does not have a full-time job (35 plus hours a week) but wants one, has no job, or does not earn a living wage. That wage is conservatively pegged at $20,000 annually before taxes.
LISEP reported this November that the actual employment rate for October was 23.6 percent.
2. Shadow Government Statistics (SGS) is a nonprofit organization that analyzes data from government and private sector reports.
SGS calculated an unemployment rate that included long-term discouraged workers, who were mysteriously discontinued in 1994 by the BLS. This alteration dramatically lowered the actual unemployment rate.
SGS reported this December that the actual unemployment rate in November was 24.4 percent.
Underemployment-D
1. The Center for Law and Social Policy (CLASP) is a nonprofit organization that advocates for low-income people, particularly minorities, in improving their economic conditions.
The BLS measure of underemployment comprises only those employees who work part-time but want full-time work.
CLASP data includes not just those with part-time jobs who want a full-time job, but those who also want more part-time hours.
CLASP reported in August 2020 that the actual number of part-time underemployed employees was 10 percent higher than the BLS measure. Moreover, one in ten employees in the United States labor market was underemployed.
2. Payscale is a prominent business entity that assists companies and employees with compensation issues.
Payscale reported in 2018 that approximately 46 percent of Americans believed they were underemployed. 76 percent asserted that they were not using their education or training in their present positions. Twenty-four percent of part-time employees asserted they would rather be working full time.
3. The Federal Reserve Bank of New York is an influential banking institution that reports on various financial components of our economic model.
The Bank reported this November that in September 40 percent of recent college graduates in the United States were underemployed.
Income-F
1. Asset Limited, Income Constrained, Employed (ALICE) is a nonprofit organization dedicated to improving the burdens of low-income households. These households earn above the Federal Poverty Level, but not enough to afford a basic household budget.
ALICE reported in December 2020 that in 2018, 42 percent of households could not afford the cost of basic family items.
In the same report, ALICE stated that two in five households were struggling to survive and that half of all households could be in poverty by the end of the pandemic.
2. Magnify Money is a major financial services company providing savings and investment information.
Magnify Money reported in February 2020 that 53 percent of the employees polled lived paycheck to paycheck. Moreover, 62 percent did not have at least three months of savings to sustain them.
3. Bankrate is a principal financial services company for the banking industry.
Bankrate reported this June that 58 percent of the adults surveyed in their nationwide poll stated they were worried about the amount they had in emergency savings. The percentage rose from 48 percent in 2021 and 44 percent in 2020.
4. LendingClub Corporation is a significant financial services company that provides online lending to customers.
LendingClub reported this September that 63 percent of Americans were living paycheck to paycheck.
Wealth-D
1. The Federal Reserve is the central bank of the United States.
The Federal Reserve reported in September that as of 2021, the top one percent of households owned 32.3 percent of the country's wealth.
Moreover, the bottom 50 percent owned just 2.6 percent.
In recent decades, wealth inequality has substantially increased in the United States.
2. Statista is a company that established itself as a leading provider of business and consumer data.
Statista reported in November that in the second quarter of 2022, 68 percent of the total wealth in the United States was owned by the top 10 percent of earners. In comparison, the lowest 50 percent of earners owned only 3.2 percent.
3. The Congressional Budget Office (CBO) is an agency of the federal government.
The CBO released a report this September that showed the poorest half of Americans or 150 million people own only 2 percent of the country’s total wealth. Moreover, the top 10 percent own 72 percent and the top one percent own 34 percent.
Misery Index
The Misery Index is an economic indicator that was created in the 1970’s. It is calculated by adding the unemployment rate and the annual inflation rate. It speculates that a high rate of inflation and unemployment result in economic deterioration. It measures how the “average” person is faring with financial issues.
Mainstream economists generally consider "full employment" to mean an unemployment rate of 4 to 5 percent; the Federal Reserve Bank seeks an inflation rate of 2 percent. Thus, a satisfactory Misery Index rating would be 6 to 7 percent.
The present Misery Index is almost double that measure.
The BLS releases a monthly Misery Index. For this October it is 11.45, down from 11.70 last month and up from 10.82 one year ago.
Conclusion
As pundits and politicians stumble to explain the continuing immiseration of working people, the underlying forces of our economic model will proceed. Reforming the economic model is a beginning.
However, the inherent contradictions in its structure presuppose a fresh look toward economic democracy.
Academics Martin Gilens and Benjamin Page studied theories of majoritarian democracy. In 2014, they published a compelling paper “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens.”
The exhaustive evidence in the study demonstrated the relative failure of our political system; the majority of Americans have little influence over policies that our government adopts. Efforts to discredit this study were summarily debunked.
The oligarchs’ influence on political decisions has become an existential threat to American democracy.
It appears the only remedy to achieve political democracy is by recognizing that it cannot be established without building impactful forms of economic democracy.
Bruce T. Boccardy is presently economics/labor advisor for the Small Planet Institute; former president, Massachusetts Service Employees International Local 888; former labor representative, Massachusetts Joint Labor-Management Committee; and former consultant, National Association of Government Employees.