Flat Per Capita Incomes Weigh on US Employment Sector

Although Increasing concern with America’s structural unemployment shows little sign of meaningful improvement in the foreseeable future, what is of equally grave concern in the lack of income growth since the beginning of the financial recession in mid-2008. In fact, over the last decade, the average U.S. household income has dropped from $54,000 to $50,000.

What is somewhat moderating this ongoing problem is the relative mildness of overall inflation during this period. Obviously, the real unemployment of the nation’s potential workforce, estimated in the low double digits, continues to affect average wages, as it always has in past major economic downturns. With industrial labor unions leveraging little bargaining power, the best jobs available, both for income and job security, are in the government sector at all levels (federal, state, municipal, etc.). This is a complete turnaround from the U.S.’s lengthy growth period, extending from the post World War II period to the 2008 “bust.” Over the last two decades, there has been a complete reversal, with government jobs paying substantially more than their equivalents in the private sector.

Although there have been setbacks, especially in near-bankrupt municipalities, incomes, as well as benefits, have flourished as the most powerful labor unions such as teachers’ and service, have been successful in generating consistent increases for their constituents. The successful Chicago Teachers’ strike is symptomatic of the leverage that such municipal unions can exercise with short-time strikes, forcing even such powerful political leaders as Chicago’s Rahm Emanuel to cave in.

With President Barack Obama’s Administration in continued control of U.S. government agencies over the next four years, it’s a near certainty that such free-wheeling entities as the Environmental Protection Agency, the Federal Communications Commission, and the Food and Drug Administration will exercise more power and influence, and also add substantially to its number of enforcers. This also generates political consequences, as the next four years will witness thousands of additional employees beholden to the incumbent governmental power structure. This could show up in the next mid-term elections, cresting to a final presidential showdown in 2016.

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