Coming on the heels of not only a triumphal speech from President Obama but one of the best job reports
of the past six years, now would probably seem like a weird time to
share some economic bad news. Yet while anyone who is lucky enough to
have financial security may be under the impression that good times are
here again, poll after poll after poll shows a clear majority of Americans still think the economy, well, sucks. Are they all crazy, or is the economic picture more complicated than it may seem?
To answer that question, Salon reached out to professor Stephanie Kelton, the economics department chair at the University of Missouri–Kansas City who frequently analyzes the state of the economy via the New Economic Perspectives blog and her active Twitter account (as well as appearing on TV). According to Kelton, things are not as terrible as they were just a few years ago — but they’re also not nearly as rosy as they seem. Our conversation is below and has been edited for clarity and length.
The state of the economy used to be a constant topic of conversation in the media, but it at least seems like that’s died down a lot in the past few years. That doesn’t necessarily mean the economy is all better, though. So how would you describe the U.S. economy today?
I’d say, relative to a lot of other countries in the world, the U.S. looks pretty good. But we’re comparing it to some pretty rotten economic performances. Much of Europe is back in recession; youth unemployment rates in places like Spain and Greece are nearly 50 percent. … Because we’re [seeing decent] top-line economic growth figures, and on the surface the unemployment situation appears to be improving, you could make the argument that the economy is improving.
But for too many Americans, it doesn’t feel like it’s improving. We know that too many of the Americans who lost jobs in the downturn and that have gone on to find [new] employment are actually working for wages or salaries that are below what they were when they lost their jobs. So the economy’s better [for those people] in the sense that they’re no longer unemployed … but they’re not making what they were before the Great Recession began.
I look at the labor force participation rates, and we all know those have been on a downward trend. … You don’t want to see this many people who are working part-time because their employers have cut their hours, and what they really want is a full-time job but they can’t get it. You don’t want to continue to see people drop out of the labor force because they’re discouraged, they looked and looked and looked for a job and weren’t successful and said, forget about it.
So the official numbers can mask a whole lot of those problems … when you factor all that other stuff in, the number [of un- or underemployed Americans] looks much bigger. You’re looking at like 25 million Americans who want full-time work and can’t find it in today’s economy. And how many jobs are available? Around 4 million. So the economy’s certainly nothing to write home about.
Read more: The economy still sucks: Economist Stephanie Kelton on why we can’t declare victory just yet - Salon.com
To answer that question, Salon reached out to professor Stephanie Kelton, the economics department chair at the University of Missouri–Kansas City who frequently analyzes the state of the economy via the New Economic Perspectives blog and her active Twitter account (as well as appearing on TV). According to Kelton, things are not as terrible as they were just a few years ago — but they’re also not nearly as rosy as they seem. Our conversation is below and has been edited for clarity and length.
The state of the economy used to be a constant topic of conversation in the media, but it at least seems like that’s died down a lot in the past few years. That doesn’t necessarily mean the economy is all better, though. So how would you describe the U.S. economy today?
I’d say, relative to a lot of other countries in the world, the U.S. looks pretty good. But we’re comparing it to some pretty rotten economic performances. Much of Europe is back in recession; youth unemployment rates in places like Spain and Greece are nearly 50 percent. … Because we’re [seeing decent] top-line economic growth figures, and on the surface the unemployment situation appears to be improving, you could make the argument that the economy is improving.
But for too many Americans, it doesn’t feel like it’s improving. We know that too many of the Americans who lost jobs in the downturn and that have gone on to find [new] employment are actually working for wages or salaries that are below what they were when they lost their jobs. So the economy’s better [for those people] in the sense that they’re no longer unemployed … but they’re not making what they were before the Great Recession began.
I look at the labor force participation rates, and we all know those have been on a downward trend. … You don’t want to see this many people who are working part-time because their employers have cut their hours, and what they really want is a full-time job but they can’t get it. You don’t want to continue to see people drop out of the labor force because they’re discouraged, they looked and looked and looked for a job and weren’t successful and said, forget about it.
So the official numbers can mask a whole lot of those problems … when you factor all that other stuff in, the number [of un- or underemployed Americans] looks much bigger. You’re looking at like 25 million Americans who want full-time work and can’t find it in today’s economy. And how many jobs are available? Around 4 million. So the economy’s certainly nothing to write home about.
Read more: The economy still sucks: Economist Stephanie Kelton on why we can’t declare victory just yet - Salon.com
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