In the campaign debates leading up to November’s congressional midterms and 2016’s presidential election, candidates will have to address the health of the American middle class — and the broader U.S. economy. While the economic recovery is progressing, there are constant reminders that the recession, which ran from late 2007 to the middle of 2009, initiated a phase of much slower growth. Slow growth is now the new normal. In the five years that followed the end of that period of economic contraction, gross domestic product has averaged growth of only about 2 percent per year, well below the historical average, while wage growth continue to stagnate and millions of Americans remain without jobs. Some experts even believe the economy will never fully recover, and the Department of Labor noted in a 2013 report that the recession and subsequent slow recovery has “left lasting scars on the economy.” The slow recovery has profoundly hurt the American middle class — which drove the country’s phenomenal postwar economic growth.
With the American middle class lagging behind peers in other wealthy countries and the scars of the recession still prominent, politicians are under pressure to — at the very least — make issues like minimum wage and legislation to spur greater job creation part of the national political debate.
Massachusetts Senator Elizabeth Warren devoted her appearance on MSNBC’s Hardball with Chris Matthews to explaining how the United States economy can create real jobs. His aim was to push Warren to give specifics on how the Democrat party plans to help unemployed Americans. As a prelude to his big question, Matthews retold a story Warren included in her newly released memoir A Fighting Chance. He recounted how a jobless woman walked two miles to hear Warren speak at a 2012 campaign stop. She told the senator: “I’m here because I’m running out of hope.” Matthews challenged the Massachusetts senator, who he called a “progressive hero,” to explain how Democrats could “restore hope” for a future with “meaningful family building employment that seems to be gone in so much of the country.” He asked: “How do you bring it back?”
That the labor market is making measurable progress toward recovery cannot be denied. Federal Reserve Chair Janet Yellen noted in a press conference following a meeting of the central bank’s policy making arm earlier this month that there is “sufficient underlying strength in the economy” to support continued improvement in the jobs market. But the falling unemployment rate hides a number of ills. The Labor Department’s May Employment Situation Report told the story of an economy, and a labor market, that is healing. Yet there was also evidence of deep scars.
May’s employment gains mean all the jobs lost during the recession have been recaptured, leaving employment at an all time high of 138.4 million people. But over the course of the five-year long recovery, the U.S. population has grown, and so the percentage of Americans that are employed remains smaller than before the recession began. According to an analysis conducted by the liberal Economic Policy Institute, more than 7.1 million jobs need to be created to fill that gap. That reality indicates the United States is far from healthy labor market conditions. Plus, the labor force participation rate remains very low by historical standards, long-term unemployment is still elevated, and many workers are underemployed.
Polling data suggest that jobs and the economy will be among the most important issues for voters in November’s congressional midterm elections. Even though Gallup’s measure of economic confidence has improved slightly over the past several months, the American public continues to express high levels of concern about the health of the U.S. economy. Economic concerns is notably higher in 2014 than in prior midterm election years, and economic conditions are an important part of why the American public is dissatisfied with its leadership. A survey conducted by Gallup earlier this year showed that American voters rate the economy as the most important issue guiding their vote for Congress this year. In third position — following the federal budget deficit — is the way income and wealth are distributed in the United States.