Judging from its June 18-19 meeting, the Federal Reserve is hedging its bets. It says the U.S. economy is on the mend, but more slowly than expected. They’ve reduced their estimate for economic growth and say that it will take a year or more to get to where we were six years ago.
The International Monetary Fund (IMF) has offered a starker forecast. Expected growth for the United States is about 3 percent, a level considered “normal” and “in recovery.” They projected something right above 2 percent earlier this year. Now, they say the United States economy will grow at about 1.9 percent, below robust recovery, and that it will take until 2018 to get the labor market back on track.
Meanwhile, the stock market seems to signal a healthy recovery, and surveys of human resource professionals found that more employers are offering signing and retention bonuses to get the best employees and to keep them. Obviously, the nearly 10 million people who are unemployed aren’t being offered any kind of bonuses. Most of them just want work. That’s not to mention the 3.4 million people who have not worked in half a year or more. Bonus? Please.
The economic recovery is as bifurcated as our economic reality has always been. The Occupy folks estimated it in a way that galvanized energy and spoke some truth. Does the top 1 percent of our population get all the benefits of economic growth? Just about. One of the most telling statistics deals with race and recovery. Aggregately, Whites and Asians Americans have fully recovered from economic shortfalls, African Americans have seen their wealth rebound by only 45 percent. They have lost 55 percent of wealth, bearing a disproportionate burden from this recovery.
When we parse the data by class, we learn that President Obama’s focus on the middle class leaves the poor where they have always been – at the periphery of economic progress. Until the job markets open up at entry level, instead of providing opportunities for the middle class and higher, the recovery will not trickle down. Meanwhile, there are members of Congress who truly believe that the unemployed are jobless because they want to be. These are folks who apparently refuse to read the data about the search for work.
What does economic recovery look like? It looks like vibrancy. It looks like people joyfully working. It looks like people who spend, if not freely, certainly less cautiously. They don’t have to run an algorithm in their brain before they decide that their child can have an ice cream cone. It means being able to put a few pennies aside for college possibilities. It means having a moment to exhale.
For all the talk of Wall Street exuberance and economic recovery, there are millions who are still waiting to exhale. While we mostly focus on the officially unemployed, the equally pressing concern is about those who are underemployed, working part time when they want to work full time. All of these folks are in the job search mix, and they are too often the people we ignore.
In many ways this is also a “race matters” narrative. Economic recovery looks great for some, good for others, and absolutely dismal for those at the bottom. The unofficial unemployment rate among African Americans remains at someplace near 25 percent. The Bureau of Labor Statistics won’t measure that, because then they will have to report the economic failure inherent in this so-called economic recovery.
The Federal Reserve and the IMF are reporting economic projections that trickle down. They say the economic recovery will not happen as quickly as they once projected, and that they have a “wait and see” attitude. The Fed is moving closer to raising interest rates, and are withdrawing from their bond buying program that fostered economic stability.
Their “wait and see” really means pulling back, which may help the overall economy. When will those on the bottom, the least, the last, and the left out, experience recovery? Until those who make public policy are prepared to deal with persistent economic bifurcation, economic recovery looks good for some, dismal as ever for others.
Julianne Malveaux is a Washington, D.C.-based economist and writer. She is President Emerita of Bennett College for Women in Greensboro, N.C.