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Obama's State Of The Union And Your Economic Reality

President Barack Obama looks at a crank shaft as he tours General Electric's Waukesha Gas Engines facility on Thursday in Waukesha, Wis. as part of a four-stop tour he is making to expand on themes from his State of the Union address, including the economy.
AP
President Barack Obama looks at a crank shaft as he tours General Electric's Waukesha Gas Engines facility on Thursday in Waukesha, Wis. as part of a four-stop tour he is making to expand on themes from his State of the Union address, including the economy.

In his State of the Union speech Tuesday, President Obama stepped up to a podium before Congress and the country and declared that the state of our union was strong.

"Here are the results of your efforts: The lowest unemployment rate in over five years; a rebounding housing market; a manufacturing sector that's adding jobs for the first time since the 1990s," the president said.

A lot of the gains of the recovery that we've seen have gone to the people at the very top, particularly the top 1 percent.

Critics quickly pointed out that of course things look better if you use 2009 — the lowest point in the economy — as a baseline. And even the president didn't keep the rose-tinted glasses on for long.

"Average wages have barely budged," he said. "Inequality has deepened; upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by — let alone get ahead. And too many still aren't working at all."

How accurate is Obama's portrait of the economy? Whatever the portrayal, there's still the matter of what's to be done, which Obama also referred to in his speech.

Assessing Obama's Assessment

Zanny Minton Beddoes with The Economist tells NPR's Arun Rath that the president isn't wrong in his optimism.

"I think the U.S. economy is recovering, and it's recovering more rapidly," Minton Beddoes says.

She points to housing sales and the GDP, which grew about 3.5 percent by the end of last year. Most economists agree that's the right amount for a healthy economy — not too fast, not too slow.

But as Obama noted, "there's a lot of very big challenges," Minton Beddoes says. Like having so many people unemployed for such a long time and growing income inequality.

These things aren't just products of the financial crisis, she says, but are instead part of larger changes taking place in the U.S. economy.

"A lot of the gains of the recovery that we've seen have gone to the people at the very top, particularly the top 1 percent," she says. "Ordinary people's incomes have not accelerated that much, and so it doesn't seem as though the economy is doing that well."

How Does It Feel?

However you look at the numbers, most Americans aren't quite sharing in the optimism.

"People are telling us in a lot of ways that they're struggling financially," says Carroll Doherty, director of political research for the Pew Research Center. Pew released a poll on Jan. 23 that surveyed Americans on their feeling about the economy.

"Fifty-seven percent in our poll say that their family incomes are not keeping up with cost of living," Doherty says.

And he says it's remarkable how long the negativity about the economy has lasted: "It's been years since there's been any real substantial improvement in people's feelings about the economy."

Over the last few years, Pew has been asking people where they stand economically: Since the start of the recession, more and more people are identifying as lower-middle or lower class.

"That went up from 25 percent about 6 years ago to 40 percent today," he says.

In other words, a year or two after the recession started, losing your job could be viewed as a temporary setback. But as you evaluate your standing on the brink of the recession's seventh year, maybe it's time to face the facts and rate yourself a little lower on the economic ladder.

At 40 years old, Arkansas mother-of-two Brandy Swanson is part of the 5 million "prime-aged workers" — those aged 25 to 54 — who have been unemployed for a long time. She was working three, 12-hour shifts a week at her local hospital, but as the economy tanked, that work dried up and she is still out of work.

"We're doing everything we possibly can to save every single dollar just so we can eat and pay our bills and buy gasoline," she says. "I don't go out and buy anything just because I want them ... we have to be really careful."

Finding Solutions

As families strain to get by and the gap between the rich and the poor widens, there is a stark partisan divide on the fundamental question of how to help — if at all.

"Ninety percent of Democrats say [government] should [do something], and only 45 percent of Republicans say it should," says Doherty of Pew.

But when the poll gets specific about solutions, the answers tell a different story. Doherty says 73 percent of Americans, for instance, favor raising the minimum wage, and 63 percent favor increasing long-term unemployment benefits.

"Those policies are popular," he says. "The question is, if implemented, would they have a significant effect on either inequality or poverty?"

Certainly the Obama administration thinks both raising the minimum wage and extending unemployment insurance will help the millions of Americans still struggling. In his State of the Union speech, Obama urged Congress to pass both those measures and more.

On Friday, he went a little further by holding a summit with about 300 companies and urged them to end hiring discrimination against the long-term unemployed.

Jason Furman, chairman of the Council of Economic Advisers, says the president would like to see follow-through from businesses, localities, states and — most importantly — the federal government.

But long-term unemployment insurance has taken a backseat in both chambers, and prospects don't look good for the minimum wage bill, either. And as much as the president can ask companies to help out, there simply aren't enough jobs for the millions who would like one.

While Congress and the president search for solutions, Swanson and her family are settling into their new reality.

"I think that my family is learning how to survive in the economy now," she says. "If in the near future, I'm lucky and I get a job at a living wage ... then I think that the recovery may be possible. I might be able to see that light."

Copyright 2021 NPR. To see more, visit https://www.npr.org.

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