Labor Day will find millions of American workers without jobs.
While Americans celebrate the federal holiday that pays tribute to the contributions and achievements of workers, for many who are either unemployed or underemployed, stuck in part-time or low-wage jobs, Labor Day will be bittersweet.
Polls show that the economy is the top concern of American voters.
They are right to be concerned.
When the Labor Department releases the August Job Report on Sept. 7, analysts expect it to say the economy added 118,000 jobs last month and that the unemployment rate held at 8.3 percent, according to FactSet.
Many Americans are exhausting their unemployment benefits because of the still-struggling economy and job market.
Economists expect the economy will keep growing at a subpar rate of roughly 2 percent in the second half of the year. Most economists expect the unemployment rate to stay above 8 percent for the rest of this year.
The problems in the economy are part of a long-term trend. A recent study by the Pew Research Center shows that the middle class has been hurting for years.
Roughly 50 percent of adults defined as middle class, with household incomes ranging from $39,000 to $118,000, form a group the report describes as suffering its “worst decade in modern history.”
Most middle-class American say it is more difficult now than a decade ago to maintain their standard of living. Of this group, some 62 percent blame Congress for the decline. A slight majority blames banks and other financial institutions.
Many middle-income families have taken a major hit in the past decade as health-care costs increase, mid-wage jobs disappear due to automation and outsourcing, and college tuition mounts, says Timothy Smeeding, a University of Wisconsin-Madison economics professor, who specializes in income equality.
Today the middle class makes up about 51 percent of U.S. adults, down from 61 percent in 1971.
Since 2000, the median income for the middle class has fallen from $72,956 to $69,487.
In addition to the declining middle class, the U.S. Census reported last year that income fell for those making $20,000 or less. This group saw income decline 4 percent.
Despite their concerns about the economy, Americans are now spending more. The increase in consumer spending could boost the economy. Consumer spending makes up 70 percent of the economy.
The housing market is also showing modest signs of improvement. Unfortunately, in a presidential election year jobs legislation is not expected to be passed in Congress.
That is, until American voters demand that Congress take action to stimulate the rate of growth that economists say is needed to create more jobs and lower unemployment.
(Reprinted from the Philadelphia Tribune)