The national economy achieved something last month which, though positive, is nevertheless melancholy. Sentier Research reports that the median household income finally climbed back to what it was when the Great Recession began.
To be precise, the median income of $56,746 was $32 higher in November 2015 than what it was in December 2007. (We hope that during the Christmas holiday you didn’t spend the difference all in one place.)
It is good to see that number reach its old level, but it is disappointing that this milestone has taken so long to pass. A one-time event that rocked global financial markets just before President Obama took office has turned into nearly a decade of lost wage growth.
Why has the recovery, which began in June 2009, been such a sad, slow slog for workers?
When progressives defend the multitudinous new laws and regulations that Obama has laid or wants to lay upon employers, they’re right to say none by itself is the end of the world. But what, by itself, is?
Each new mandate and each new tax increases the burden weighing down job creators. A health insurance mandate here, an income tax increase there, a stricter definition of what constitutes an employee, a new environmental restriction that drives up energy prices on top and — well, you get the picture. Eventually, you put such a heavy load on employers that you get an economy like the one we have now, limping along, alive but not thriving.
You get slow growth, nonexistent wage increases and people under the age of 55 dropping out and staying out of the workforce in large numbers. You get high numbers of marginal disability claims, with a far larger share than usual being rejected but the number on the rolls still hovering at record levels. You get persistently large numbers of people capable of working who nonetheless come to rely on food stamps and other handouts.
In the current case, thanks in part to the peculiar distortions created by Obamacare’s looming employer mandate, you might also get a workforce that includes a stubbornly large portion that is part-time, still at levels similar to those of historic recessions rather than times of prosperity.
This might help explain why only now, years after a massively ineffective stimulus program and a “Recovery Summer” of 2010 (remember that?), the economy is still shuffling its feet forward like a man carrying two pianos on his back.
Every burden placed on the economy matters. Most have only a small effect by themselves, but none is by itself. They are legion. And together they add up to a structural impediment to a robust economy. A full-blown socialist system eventually collapses because it runs out of other people’s money. But the administration we have today, while stopping short of that, is nonetheless testing the limits of what can be imposed on the economy’s productive sector without causing a new recession.
There is a better way of running an economy than this, and American governments used to know how to do it. The country has suffered seven years of Obamablight since the recession ended. It will take a new kind of administration to put the country and its job creation back on track.
