New York City, USA – Makalah Monroe works at an outback steakhouse in Laurel, Maryland. She is a student and the only one in her household who has a car. Be that as it may, Monroe has a whole host of tasks that make her work hard. She works full time and still struggles to make ends meet.
“Often I leave an eight-hour shift with only about $60 in hand,” Monroe told Al Jazeera.
With credit card, phone and insurance bills piling up, her current salary simply isn't enough. She often has to decide what gets paid and what has to wait.
“Usually I have to call the car and insurance companies and tell them that I either have to pay late or stop paying altogether,” she added.
Monroe is like the millions of Americans whose financial situation depends on the outcome of the US presidential election. President Joe Biden will focus on a series of economic successes in his first term, including record employment growth, low unemployment and falling gasoline prices – among other key economic indicators that have made clear the U.S. economy is on the rise.
But the incumbent president, his Republican opponents, third-party candidates and Biden's longest-running Democratic challengers are confronting the harsh reality of underemployment in the United States.
But given the significant economic growth, the question arises: Do Americans like Monroe have a better chance of social mobility under the future Democratic nominee – most likely Biden – or under the most likely Republican nominee, former President Donald Trump?
According to data compiled by the Economic Policy Institute, underemployment is at just under 7 percent — the lowest level since the agency began collecting data in 1990. When Trump left office, underemployment was over 14 percent. After peaking in March 2021, there has been a steady decline since then.
“Since the recovery from the COVID-19 pandemic, unemployment has fallen quite sharply and rapidly,” said Lonnie Golden, a professor of economics and workforce-human resources at Pennsylvania State University.
Increase in the cost of living
While the Biden administration has seen record job growth, it is not clear that the new jobs in question are well-paying, sustainable jobs that match the cost of living across the United States.
“Over the last year, we have seen an increase in the way the Bureau of Labor Statistics measures the number of people who work part-time but would rather work full-time,” Golden said.
“These numbers somehow obscure the extent of people being underemployed because they are looking for a second job to earn more income,” she added.
Despite economic progress, child poverty has increased by 137 percent and average rental prices have increased nationwide.
The percentage of income required to rent a median-priced apartment in the U.S. has increased by 40 percent since the start of the COVID-19 pandemic, according to a new report from Zillow.
In some cities it is even higher.
In Miami, Florida, renters must spend 43 percent of median income to afford a median-priced rental apartment. The minimum wage in Miami is $12 an hour.
Nationally, the purchasing power of the minimum wage peaked in 1968 and has not kept pace with the cost of living since.
According to a report from the Federal Reserve Bank of New York, the number of underemployed people is much higher – 33 percent among college graduates. This is because the metric takes into account graduates in jobs that do not require a college degree.
As the recovery has continued, much of the continued employment gains have been in the leisure and hospitality sector – an industry known for its low wages.
“The low wage pool is what is growing the American workforce,” Saru Jayaraman, founder of One Fair Wage, told Al Jazeera.
Jayaraman contends that Biden, who has historically been more pro-worker than his Republican challengers, could do much better strategically if he fully embraces pay issues.
“It's getting harder and harder to tell workers to vote for a Democrat who will raise wages when that doesn't happen,” Jayaraman said.
However, Biden delivered on many of his promises in the last election cycle.
One of Biden's first actions as president was to raise wages across the board through the Raise the Wage Act. However, this did not happen as the bill was blocked by Republicans. However, Biden was able to raise the minimum wage for all federal contractors. The U.S. government is the country's largest employer.
Biden has not committed to eliminating the minimum wage, which allows tipped workers to earn wages as low as $2.13 an hour — even though many states require higher direct wage amounts for tipped workers. The rest should be made up through tips – a step that is widely accepted in the catering and other domestic industries.
However, the Trump administration actively sought to limit tips for these same restaurant workers. The former president urged that business owners take control of tips and distribute them to workers as they see fit.
Proposed solutions to underemployment include a series of tougher proposals, including a push by nonprofit One Fair Wage to eliminate the subminimum wage nationwide.
One Fair Wages' efforts helped put wage measures on the ballot across the country and received more votes than any presidential candidate.
“In 2020, more people voted for a $15 minimum wage in Florida than [the number of votes for] either Trump or Biden,” Jayaraman said.
Errors in proposed fixes
One proposed solution was a universal basic income. Americans got a taste of this in the early days of the COVID-19 pandemic when the government released one-time payments. This stimulated the economy. Consumer spending rose sharply.
In May 2020, personal spending increased by 8.2 percent compared to the previous month. This also had the same effect on the second round of government payments. Consumer spending rose more than 4 percent in the months following the second release, which occurred in early 2021.
However, this was one of the many reasons why inflation rose sharply in the following years.
Printing more money means that each dollar is worth less than it used to be, driving up prices. Still, wages didn't rise nearly fast enough.
“Just a few years ago, one in three full-time employed Americans lived in poverty. We are slowly approaching one in two,” Jayaraman said.
For its part, the Department of Labor is taking steps to respond to massive changes in the U.S. economic structure. In September, the department announced a $57 million grant to expand job training programs, including in major metropolitan areas such as New York, California, Illinois and Ohio.
The move aims to help underemployed people move into high-demand and expanding industries related to combating climate change and staffing the U.S.'s infrastructure projects.
While the program is expected to have widespread impact, the Labor Department says it will help about 10,000 workers.
With this comes a wave of union organizing efforts from large companies like Amazon to small independent coffee shops. Several companies and retailers have successfully campaigned for higher wages and fairer contracts.
But this came more from empowered workers in individual sectors than from overarching policies from Washington.
The Biden administration largely supports unions that demand fairer collective bargaining, such as the United Auto Workers.
However, the movement is slow. Wage increases are often staggered slightly over several years. The required wage increases for federal contractors were implemented unilaterally via presidential executive order in April 2021, three months into Biden's presidency. It came into force a few weeks ago.
But as Washington speculates about a variety of possible solutions, rent and utility bills are still piling up for people like Monroe.
“Basically, I’m living paycheck to paycheck right now,” Monroe said.
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