On the other hand, businesses aren’t spending as much as they might, and along with holding off on spending makes it difficult for them to add employees to their payrolls. It also impacts GDP. What are these businesses waiting for to persuade them to invest in the economies that went into debt for their survival? Banks aren’t lending as much as they might, and even consumer credit is tighter than it should be. Consumers are spending despite, not because of, sluggish economic growth.
Growth might be stronger if the job market were more robust. As we saw from Friday’s unemployment figures, unemployment isn’t dropping significantly. Wages are stagnant. Every measure that President Obama has introduced for job creation our Congress has rebuffed, including unemployment assistance. While economic growth is, at best, sluggish, there are many who have not experienced any recovery at all.
While macroeconomic indicators deal with overall issues of economic growth, few indicators are disaggregated by race or income status. The Obama initiatives to raise wages, lower unemployment and create jobs are important because they are modest ways to spread the wealth and to ensure that economic growth is more evenly distributed. After all, we know that those at the top garneared the most gains from money thrown at them because they were “too big to fail.” Are those at the periphery just too small to survive?
We can’t have sustained economic growth when those who depend on banks to provide funds for economic expansion are shut down. We won’t have sustained economic growth if (0fficiallly) one in 15 people, and one in eight African Americans cannot find work. Economic recovery is meaningless to someone who lost a home during the great recession, and is clawing back to survival. While those with mortgage challenges were promised relief, few of them are have received it.
Some expect the economy to come roaring back in the second quarter, but I don’t expect the growth rate will be much higher than 3 percent. Further, the growth rate does nothing to close the wage and income gap that clearly slows economic growth. Who gains and who loses based on the growth rate? This is as an important an issue as is the issue of sluggish economic growth.
(Julianne Malveaux is a Washington, D.C.-based economist and writer. She is president emerita of Bennett College for Women in Greensboro, N.C.)
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