New York City, USA – Makalah Monroe works at an Outback Steakhouse in Laurel, Maryland. She is a student and the only one in her house who has a car. In any case, Monroe has a lot of responsibilities that she is working hard to fulfill. She works full time and still struggles to get by.
“I often leave an eight-hour shift with only about $60 in my hand,” Monroe told Al Jazeera.
With credit card, phone and insurance bills piling up, her current salary simply isn't enough for her. You often have to decide who gets paid and what to expect.
“I usually have to call the car and insurance companies and tell them I have to pay late or stop payments altogether,” he 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 achievements during his first term, including record job growth, low unemployment and falling gasoline prices, among other key economic indicators that have made it clear that the US economy is on the rise.
But the incumbent president, his Republican opponents, third-party candidates and Biden's unlikely Democratic rivals are facing the harsh reality of underemployment in America.
However, with significant economic growth, the question is: Do Americans like Monroe have a better chance of social mobility under the eventual Democratic nominee – most likely Biden – or the more likely Republican nominee, former President Donald Trump?
According to data compiled by the Economic Policy Institute, underemployment sits at just under 7 percent, the lowest since the agency began tracking data in 1990. When Trump left office, underemployment was more than 14 percent. percent. After a peak in March 2021, there has been a steady decline since then.
“Since the recovery from the COVID-19 pandemic, unemployment has declined quite sharply and rapidly,” said Lonnie Golden, professor of economics and labor and human resources at Pennsylvania State University.
Increased cost of living
While the Biden administration experienced record job growth, it is not clear that the new jobs in question are high-paying, sustainable jobs that cover the cost of living across the United States.
“In 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 prefer to work full-time,” Golden said.
“These figures somewhat mask the extent of underemployment of people seeking second jobs to earn more income,” he added.
Despite economic advances, child poverty has increased by 137 percent and average rental prices have increased nationally.
According to a new report from Zillow, the percentage of income needed to rent a median-priced apartment in the U.S. has increased 40 percent since before the start of the COVID-19 pandemic.
In some cities, it is even higher.
In Miami, Florida, renters need to spend 43 percent of the 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 is much higher: 33 percent among college graduates. This is because their metric considers graduates working in jobs that do not require a college degree.
Amid the recovery, much of the steady job gains came in the leisure and hospitality sector, an industry known for its low wages.
“Low wages are what is growing the American workforce,” Saru Jayaraman, founder of One Fair Wage, told Al Jazeera.
Jayaraman says Biden, who is historically more pro-worker than his Republican rivals, could do much better strategically if he fully embraced the 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, during the last election cycle, Biden delivered on many of his promises.
One of Biden's first actions as president was to raise wages across the board through the Raise the Wage Act. But that didn't pass because Republicans blocked the bill. Biden, however, managed to increase the minimum wage for all federal contractors. The United States government is the largest employer in the country.
Biden has not taken steps to abolish the subminimum wage that allows tipped workers to earn a wage of just $2.13 an hour, although many states require higher direct wages for tipped employees. The rest is supposed to be made up by tips, a measure widely accepted in the food service industry and other domestic industries.
However, the Trump administration actively attempted to limit tipped wages for these same restaurant workers. The former president pushed for business owners to take control of tips and pass them on to workers as they saw fit.
Proposed solutions to underemployment include a number of composite proposals, one of which is the nonprofit One Fair Wage's initiative to abolish the subminimum wage nationwide.
One Fair Wages' efforts have helped get wage measures on ballots across the country, garnering more votes than any of the presidential candidates.
“In 2020, more people voted for a $15 minimum wage in Florida than [the number of votes for] whether it’s Trump or Biden,” Jayaraman said.
Failures in the proposed solutions
One proposed solution has been 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. That stimulated the economy. Consumer spending increased.
In May 2020, personal spending increased 8.2 percent from the previous month. That had the same effect during the second round of government payments. Consumer spending increased more than 4 percent in the months following the second release, which was in early 2021.
However, that was one of the many reasons why inflation soared in the following years.
Printing more money means the individual dollar is less valuable than before, driving up prices. However, wages did not grow fast enough.
“Just a few years ago, one in three Americans who worked full time lived in poverty. We are getting closer to one in two,” Jayaraman said.
For its part, the Department of Labor is taking steps to address massive changes to the economic structure of the United States. In September, the department announced a $57 million grant to expand job training programs, including in large population centers such as New York, California, Illinois and Ohio.
The move aims to help those who are underemployed pivot toward high-demand and expanding industries related to addressing climate change and staffing U.S. infrastructure projects.
While the program is expected to have widespread effects, the Labor Department says it will help about 10,000 workers.
It also comes with a wave of unionization efforts at large companies like Amazon and even small independent coffee shops. Various companies and business sectors have successfully lobbied for higher wages and fairer contracts.
That, however, came from empowered workers in individual sectors and not from broad Washington policies.
The Biden administration has largely supported unions that have called for fairer contracts, like the United Auto Workers, for example.
The movement, however, is slow. Salary increases are usually spread marginally over several years. The required pay increases for federal contractors were implemented unilaterally by executive order in April 2021, three months into Biden's presidency. It came into effect a few weeks ago.
But while Washington hypothesizes about a multitude of possible solutions, people like Monroe still have rent and electric bills piling up.
“I'm basically living paycheck to paycheck right now,” Monroe said.
