(Photo: Zoonabar/ cc via Flickr)
Bankers
on Wall Street rang in the final hours of 2013 with gains unseen in
almost twenty years. However, for roughly half of America, these stock
market highs mean nothing as they face a new year with little work and
even less of a safety net.
"Never, I don't think, in recent
history have you had unemployment this chronically high for so long with
the market having done this well," Roben Farzad, an economics writer
and contributor to
Bloomberg's Businessweek,
said on
PBS Newshour Tuesday.
"There's a stat that Obama's bull market just beat Ronald Reagan's. I
dare say, if you canvass the man on the street, no one would guess that
we beat the decade of decadence already. You're certainly not feeling
it out there," he continued.
At the end of the day Tuesday, the Standard & Poor index closed
with a nearly 30 percent gain, its best since 1997. The Dow Jones
Industrial Average also closed at a record high, reaching 16,576.73, up
26.5 percent on the year—marking the largest annual jump since 1996.
And,
according to the
Wall Street Journal, when dividends are taken into account, stocks posted their best returns since 1995.
However, for the
half of Americans
who avoid or cannot afford to dally in the stock market, these gains
are inconsequential. With the unemployment rate currently near 7
percent, it's clear that many of these corporate gains have not had any
positive impact on working people.
As corporate profits after taxes have grown 30 percent since 2007 and
the number of jobs is still below its pre-recession level, Farzad asks:
"At what point do you see companies feeling so flush, so hale that they
see their stock prices and market capitalizations up that they have to
go out and hire?"
As
Huffington Post reporter Mark Gongloff
points out, "corporate profits are soaring largely because companies have been squeezing costs—especially labor costs."
With a scant rise of just 2.1 percent, hourly wages have "barely
budged since the market bottomed in 2009," Gongloff reports, "while the
Dow has skyrocketed 153 percent."
And for the "man on the street," the New Year will bring changes of another measure.
On Saturday, emergency federal unemployment benefits were allowed to
expire for 1.3 million people who have been unemployed more than six
months.
"These are precisely the jobless who will suffer most from a cutoff,
since they have been scraping by on unemployment checks for so long that
their financial situations are already precarious, if not dire,"
writes Washington Post columnist Eugene Robinson.
Compounding these "dire" financial straits, 2013 also saw the gutting of essential social safety nets.
In November, food stamp benefits were slashed for an estimated 48
million people, including 22 million children, by an average of 7%.
As
The Guardian's Karen McVeigh reported last week:
As these cuts begin to bite, even harsher reductions are in prospect. Republicans in the House of Representatives have proposed $38bn cuts over 10 years, in their latest version of a long-delayed farm bill that would also require new work requirements and drug tests for food stamp recipients.
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