September 18, 2017; New Yorker

After stagnating for over a decade, according to the U.S. Census Bureau the income of U.S. households is “finally picking up.” Some of the biggest gains were found in black and Latinx households—10 percent for black households and 11 for Latinxs.

After taking account for inflation, it found median household income slightly above 2007 levels. The median household income represents the center of income distribution; it tells us how the middle class is doing.

John Cassidy, of the New Yorker, writes, “Even allowing for these qualifications, though, there is no doubt that incomes have jumped quite a bit since the end of 2014—coinciding with a drop in the jobless rate, from 5.6 percent to 4.4 percent.”

Much of this has to do with the low unemployment level. “When the unemployment rate is high, full-time jobs are hard to find and workers have little bargaining power,” writes Cassidy. This lowers wages and income. “Conversely, when the unemployment rate is low, full-time jobs are easier to find,” and wages and income increase because employers have to work harder to attract employees.

According to the Census Bureau, female and low-paid workers have been benefitting from this trend. The increase in minimum wage in some states has contributed to this. Cassidy notes that we’ve seen this trend before and surmises that full employment should be a governmental goal.

Some of this can be attributed to the Federal Reserve’s Janet Yellen and Stanley Fischer, who have a congressional mandate “to maintain both maximum employment and stable prices.” One tactic was to not raise interest rates more rapidly, which allows the unemployment rate to decline.

They expect wages and income to continue increasing through 2017. Lesson learned: Maintaining full employment increases the bargaining power of workers, is key to raising wages, and should be the goal of any responsible government, especially progressive ones.

One note to nonprofits: A healthy job market means higher wages, which means substandard jobs go wanting. We have discussed many times in these newswires that whole, rapidly expanding fields of direct care nonprofit work offer low wages, unpredictable hours, and few benefits. In a jobs-rich market, this is a disaster waiting to happen, both for those who need the services, mainly the most vulnerable, and for the nonprofits running those services.

NPQ has often warned nonprofits in the wage ghettos of the sector to make other plans and build financial models that attend to the best interests of workers. It should not have to come to the kind of labor shortage “crisis” that a good jobs market causes.—Cyndi Suarez