President Barack Obama’s State of the Union was all about jobs. He said the word 23 times, often congratulating himself on having helped create 4 million. He urged a “year of action” to make more jobs, raise wages and create opportunities for social mobility. Then he set out on a jobs tour to persuade large companies to start hiring and pay more.
But if we assume the Tea Party-dominated House of Representatives is not going to help him here and will block any new public borrowing for infrastructure projects, what is the president to do?
Perhaps he needs to do little. The economy is slowly growing, with the number of new jobs increasing at roughly 200,000 a month, and the number of out of work Americans has been falling. The unemployment rate — using the latest figures, from December 2013 — shows unemployment at 6.7 percent, lower than at any time since October 2008. At its most severe, in October 2009, one in 10 Americans was out of a job.
The problem is, the jobs created since the 2008 financial collapse are paying far less than the millions of jobs lost. For many, this “new normal” suggests the recovery has been “L”-shaped — not a bounce back to former prosperous times. With fewer workers earning less, the multiplier effect of domestic spending that can set off a true recovery is severely diminished.
The president is working on getting more money into pay packets. As well as trying to get Congress to extend unemployment benefits for those without jobs for a long time, Obama is now urging the raising of the minimum wage. Since the House is unlikely to agree to adding to labor costs by such a measure, the president has gone his own way, using executive powers to unilaterally raise the wages of the lowest-paid federal contract workers.