The current perception of a “strong” U.S. economy is greatly misleading, largely stemming from the selective interpretation of statistics presented in the Bureau of Labor Statistics (BLS) jobs report. Recent data indicates a significant decline in the high-wage, high-productivity goods-producing sector—down 18% since reaching its peak in 1978. In stark contrast, the Leisure and Hospitality (L&H) sector has seen a staggering rise of 128% in terms of hours worked, most of which can be attributed to employment in low-wage food service establishments. The troubling aspect of this shift is that many of the jobs created in the L&H sector pay far less than those in goods manufacturing, suggesting that higher-quality jobs are being replaced by lower-quality positions. As a result, the economic implications are severe, as the actual market value of labor and output is not being maintained or improved.
A critical analysis of BLS employment data reveals deeper biases inherent to the data collection methodology, which was heavily influenced by Keynesian economics. This framework largely ignores the contributions of the informal economy, household labor, and self-service activities among other unmonetized economic activities. The shift of economic activity from informal or household settings into the monetized economy can result in inflation of employment and output figures without reflecting real economic growth. A case in point is the meteoric rise in the number of taxi and limousine drivers corresponding with the explosion of ride-sharing services like Uber and Lyft; this growth potentially masks the reality of diminishing household-driven driver activities. The increase highlighted by BLS counts is, therefore, not indicative of real growth, but rather a reclassification of existing economic activity.
Over the last several decades, a multitude of unrecorded household contributions have entered the monetized economy, particularly evident in the increasing employment rates of prime-aged women. Since 1978, the employment rate for women aged 25-54 has risen significantly, reflecting a broader shift in societal norms and the increased labor force participation of women. This trend has led to an increase in total employment figures, but much of this growth can be attributed to previously unaccounted household work now recognized in official employment statistics. The movement from non-paid household roles into the labor market has significant implications, as it reflects not just a changing economy but a profound transformation in social structures and economic responsibilities within households.
Examining the statistics reveals a stark trend: while overall employment rates have grown, a large portion of this increase stemmed from the migration of women into specific sectors like health care, education, leisure, and hospitality, which bore the brunt of previously unmonetized household labor. The increase in employment within these sectors amounted to over 23 million job gains, accounting for nearly 36% of all reported job growth since 1978. However, much of this employment growth does not represent real economic advancement but rather a reflection of social changes where women are transitioning from unpaid domestic labor to paid employment in service-oriented sectors. Thus, a significant portion of these gains appears less about actual job creation and more about how society and economic roles have evolved.
Current fiscal dynamics reveal a problematic relationship between public debt and GDP growth that raises concern about the sustainability of the apparent economic upturn. Since the fourth quarter of 2019 through mid-2024, public debt surged by $11.63 trillion, whereas nominal GDP only expanded by $6.75 trillion, leading to an alarming debt-to-GDP growth ratio of 172%. In contrast, robust periods of economic growth, such as between 1954 and 1970, were characterized by a much lower increase in public debt relative to GDP growth, suggesting a fundamentally different economic environment. During this earlier period, public debt only grew by 2.2% annually alongside a 6.5% annual increase in GDP, demonstrating a healthier economic state compared to the current situation.
Moreover, the disparity continues when analyzing median family incomes and total public and private debt across the same time frames, underscoring the unnatural economic conditions currently prevailing. While median family income growth has stagnated in recent years, historical periods characterized by lower debt growth coincided with rising living standards. The substantial increase in debt from $74.9 trillion to nearly $100 trillion, vastly overshadowing nominal GDP growth, suggests that current claims of economic vigor are misleading and unsustainable. As monetary policy continues to encourage excessive borrowing and spending, it creates an artificial environment that obscures the stagnation and potential risks associated with such high levels of indebtedness.
In conclusion, the current economic indicators that are touted as signs of growth mask deeper issues and systemic challenges facing the U.S. economy. Reliance on distorted employment figures and superficial GDP growth driven by government debt raises serious doubts about the real health of the economy. As society continues to grapple with these challenges, the evidence suggests that economic prosperity cannot be achieved simply through spending and borrowing; true progress requires genuine output and sustainable employment structures. The reality of the “Biden-Harris Economy” exposes ongoing vulnerabilities and emphasizes the need for critical reevaluation of economic policies that prioritize sound fiscal management over short-term gains.