No, the economy isn’t working well for all Americans — and a new survey proves it
President Donald Trump has not hesitated to boast about the state of the U.S. economy, insisting that his policies have brought about an economic miracle (never mind the fact that unemployment was going way down during President Barack Obama’s second term). But two of the Democratic presidential primary candidates who are hoping to unseat Trump in 2020, Sen. Elizabeth Warren and Sen. Bernie Sanders, have repeatedly stressed that big chunks of the U.S. population are not feeling the economic recovery — and a new survey by the personal finance website WalletHub bears that out.
The United States’ national unemployment rate, according to Bureau of Labor Statistics (BLS) figures, was 3.7% in August and 3.5% in September. When Obama was a lame duck in December 2016, it was 4.7% compared to 10% in October 2009 during the worst of the Great Recession. So Trump inherited an economy that was in recovery under Obama; he didn’t create an economic miracle single-handedly, contrary to what one often hears on Fox News. Further, unemployment figures don’t tell the whole story, and WalletHub’s survey underscores the fact that millions of Americans are still struggling.
According to WalletHub’s survey, released this week, “78 million Americans” say their finances are a “horror show” — that includes 34% of Millennials and 16% of Baby Boomers. Moreover, 85% of Americans, WalletHub reports, plan on spending less this Halloween compared to Halloween 2018.
WalletHub CEO Odysseas Papadimitriou, in an official statement on the survey’s findings, explained, “A lot of people are indeed struggling financially right now. Just consider the fact that consumers currently owe more than $1 trillion to credit card companies. That’s expensive debt, and if we don’t start to pay it down in a meaningful way, the horror show will get a lot worse, unfortunately.”
WalletHub’s survey was not political in nature, but it points to some issues that Warren and Sanders have discussed extensively — including the United States’ horribly dysfunctional health care system and the high cost of housing. WalletHub asked Americans what types of expenses they were especially fearful of: 44% cited “medical bills,” while 29% said “mortgage/rent.”
Although the Affordable Care Act of 2010, a.k.a. Obamacare, has greatly increased the number of Americans who have health insurance, medical bankruptcy — as Warren and Sanders have emphasized — continues to be the main cause of bankruptcy in the United States. Warren and Sanders are proposing a government-operated Medicare-for-all system that would do away with most private health insurance, while centrist Democratic presidential hopefuls like former Vice President Joe Biden and Sen. Amy Klobuchar favor universal health care via more of a public/private approach that would include an aggressive expansion of Obamacare combined with a government-operated public health option.
Wages have not kept up with the exorbitant cost of housing in many parts of the U.S. — large urban centers especially — and the situation is so dire that Sanders has proposed a national rent control law. Warren is proposing a major investment in subsidized housing, asserting that the alternative is persistant homelessness. Not surprisingly, developers are freaking out over Sanders’ national rent control proposal, although Americans sleeping in their cars or in homeless shelters because they can’t afford even a small studio apartment are more inclined to believe that the Vermont senator makes perfect sense.
Certainly, 3.5% unemployment is a major improvement over 10% in 2009, but as economists Paul Krugman and Robert Reich have often pointed out, many of the gains of the United States’ economic recovery have gone to people at the top. And having a job doesn’t necessary mean that one isn’t having a hard time keeping up with expenses like health care and housing. Liberal journalist Thom Hartmann has noted that in major urban areas in the U.S., it takes a six-figure income to have real financial security.
WalletHub also reports that “177 Million Americans” are fearful of a recession, although Papadimitriou doesn’t believe there is “any cause for immediate concern.”
In his official statement on the survey, the WalletHub CEO explained, “There’s a lot of surface-level noise creating uncertainty, sure. But the fundamentals are strong, and we should be in for another year of growth in 2020. But that does not mean people should get comfortable. Winter is coming, so to speak; so, everyone should make sure to squirrel away as much savings as they can now.”