The Social Security Administration—an agency whose publications usually make for good bedtime reading—issued a loud and clear wake up call to Americans. Here’s a description of the findings courtesy of Michael Snyder at ZeroHedge:
The Social Security Administration has just released wage statistics for 2013, and the numbers are startling. Last year, 50 percent of all American workers made less than $28,031, and 39 percent of all American workers made less than $20,000. If you worked a full-time job at $10 an hour all year long with two weeks off, you would make $20,000. So the fact that 39 percent of all workers made less than that amount is rather telling. This is more evidence of the declining quality of the jobs in this country. In many homes in America today, both parents are working multiple jobs in a desperate attempt to make ends meet. Our paychecks are stagnant while the cost of living just continues to soar.
That’s a disaster, but it has nothing to do with a minimum wage, it everything to do with the prevalence of minimum wage-type jobs. The American economy has always been known for its vibrancy, its ability to create and innovate its way into higher paying careers. But we’ve stagnated and the current federal government has no answers, at least none that they can pass.
The lack of ideas, particularly from Democrats, on how to jump start economic growth is a problem that stretches far beyond our economic wellbeing into our psychological wellbeing. As David Brooks writes for the New York Times:
In our meritocratic culture, satisfying and stretching work has become a psychological necessity. More than ever before, we are defined by what we do. If you are of prime age and you are not in the labor force, or engaged in some deeply stretching activity like parenting, then you will begin to feel drained inside. If you are in a dysfunctional workplace with bad personal relationships and no clear purpose, a core piece of you will begin to degrade. If you are not earning enough money so you can feel respected, and live without desperate stress, you will begin to lose confidence and élan. . .
The country is palpably in the middle of some sort of emotional recession. Yet over the past five years, the political class has done essentially nothing. That will fill future generations with astonishment and should fill the current generation with rage.
It absolutely should fill Millennials with rage. Our student loans are bigger than they should be. Our paychecks are smaller than they should be. Jobs are too difficult to come by. And the ones we find are too easy to be fulfilling.
Brooks goes on to give some suggestions for ways to end the emotional recession. He suggests focusing the federal government’s generosity away from entitlements and towards investments in the working poor, reforming the tax code to encourage work and investment, and utilizing the immigration system as a talent recruitment tool. Those are all fine ideas that should be pursued, but we’d like to add two suggestions of our own:
- Reform higher education to reduce tuition costs: Student loan debt, which is now approaching $1.2 trillion, is a symptom of a bigger problem – the growing unaffordability of a college education. Unless something is done soon an entire generation will be weighed down by excessive debt payments, money that could otherwise be used to buy a home, a car, or other consumer goods that rev up economic growth. Fortunately, Republicans have put forth a number of solutions, including alternative loan arrangements, shaking up the accreditation cartel, and harnessing technology to democratize education.
- Encourage entrepreneurship through regulatory restraint: Economist Wayne Brough recently wrote that entrepreneurs and regulators “work in different spaces, with completely different views of the world.” Entrepreneurs “identify unmet demands” and are willing to adapt, innovate and work fast to fill the gap. Regulators on the other hand are “backward-looking” and live to “address purported market failures that have already emerged” based on past behavior. We’re already seeing the impact of stuck-in-the-past regulators on innovators like Uber and Lyft. Something needs to be done before the next generation of entrepreneurs are regulated into submission.
Simple steps like these aren’t just commonsense, they’re absolutely necessary if we ever want wage growth to follow job growth.