Local Editorials

Our view: Economic recovery remains slow

This Labor Day finds at least some of the American workforce wanting more. It’s not hard to understand why.

Take the recent example of fast-food workers, who protested in Chicago and around the country Thursday. They took to the streets to protest their low wages and demand they receive pay to support a family of three.

Such a protest by fast-food workers would have been dismissed out of hand 10 years ago. “Flipping burgers” long has been considered the domain of teens and others looking to supplement their income.

People are marching in 2013 because those fast-food jobs are the best many can find in a labor market where 11.5 million workers are unemployed and another 8.2 million work part time but want to work full time.

These workers are depending on these jobs for their livelihood.

The national unemployment rate – not counting people who have given up looking for work – was at 7.4 percent in July. In Illinois, the rate was 9.2 percent.

Wage growth has been stagnant or fallen since the Great Recession; in sectors such as restaurants and manufacturing, wages have fallen. Young adults are living with their parents longer because they cannot find jobs with adequate wages to pay student loan debt and monthly rent.

Meanwhile, corporate profits are growing. As a share of the overall economy, they hit their highest level since World War II in 2012, according to the U.S. Department of Commerce. Wages paid to workers were smallest share of Gross Domestic Product since the 1950s.

Yet employers have been reluctant to grow their payrolls because of uncertainty about the future – not the least of which includes the effect the federal Affordable Care Act will have on businesses around the country. The U.S. has the highest corporate tax rate of any industrialized nation, and its tax code encourages international companies to keep profits overseas. It is generally agreed that the code – written in 1986 – needs an overhaul, but Congress and President Barack Obama don’t see eye-to-eye on what should be done.

It is tempting to create a management vs. labor narrative for today’s economy, but it’s not accurate. Corporate profits benefit more of us than they did in the economy of 100 years ago.

More than 73 million Americans are active participants in 401(k) retirement plans, which means they do benefit when corporate profits lead to gains in the stock market.

Likewise, consumer spending drives America’s economy, and when consumers don’t see increases in their spending power, it is harder for the economy – and businesses – to grow.

Employers who keep operations and jobs in America, and hire Americans to fill those jobs, should be given preferential tax treatment. Workers who pursue training in additional skills should be encouraged to do so in every way possible. And the federal government should cut spending and reduce taxes.

We need to work together if our economy – and our country – is to continue its recovery from what was a devastating recession.

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