Less than a third of Americans consider themselves to be financially healthy. In fact, more than half report struggling with some aspect of their financial lives, according to a comprehensive survey released in November by the Financial Health Network.
And that's far from the only metric that shows Americans are struggling. But why is that still the case after the U.S. has experienced long-running economic expansion with strong gross domestic product growth and low unemployment?
This economic struggle is linked, in part, to the fact that middle-income jobs have been gradually disappearing for decades — as far back as as the 1970s, Janet Yellen, former chair of the Federal Reserve, said last week during a Brookings Institution event on the economy. And it's the big technological changes in the workplace — which demand and reward workers with more skills — that are partly to blame, Yellen said.
"People with more education and skill are benefiting from the tech. They're getting ahead," she said.
Meanwhile, people without these skills are seeing their jobs disappear.
While there is work, a vast majority of the jobs that are available to those with a high school education or less are not high quality, Yellen said, either because they are low-paying, undesirable, lack the ability for upward movement or are unsafe.
Following the 2008 financial crisis, the economy added 11.6 million jobs from 2010 to 2016, but about 99% of those jobs, or 11.5 million, have gone to workers with some college education, according to academic research from Georgetown University. Only about 80,000 jobs were added for those with a high school diploma or less, yet these workers lost an estimated 5.6 million jobs during the recession.
Take a major metro such as Detroit, for example: About 42% of all workers hold low-wage jobs, and the median hourly wage is $9.94 per hour, reports Molly Kinder, a research fellow at Brookings who studies the low-wage workforce.
Across the U.S., 53 million people, or 44% of all workers ages 18 to 64, are considered low-wage employees, according to a recent report from Brookings.
In addition to technology changing the workforce, Yellen said globalization and trade have also put the squeeze on middle-income Americans. Research shows that in some sectors and industries, globalization and trade has incentivized employers to outsource jobs or source materials more cheaply from other countries, often closing businesses and factories in the U.S.
While Yellen doesn't believe there's a "silver bullet" for helping more Americans get ahead financially, she does argue the U.S. needs to improve its social safety nets. When you compare the U.S. with other countries — particularly Europe, which is undergoing the same types of structural changes and high unemployment — you don't see as much distress and income loss as you do in the U.S., Yellen said.
She pointed out that the U.S. hasn't raised the federal minimum wage since 2009 — it still stands at $7.25 an hour. "That's certainly something we can be thinking about [doing]," she said.
Yellen also argues the U.S. needs to deal with the issues that are most pressing to its citizens: health care and cost of housing. Policymakers need to pay particular attention to localities where there are a lot of open jobs, yet housing is "unaffordably expensive," she continues.
And the importance of investing in education cannot be overstated. "When you're seeing wages rise for those with more skill, and stagnate, or decline, for those with less, that seems to be a signal that's saying loud and clear we have to do a better job of equipping young people with the skills they need to succeed in the labor market," Yellen said.
Yet that investment should not be limited to young people who are just entering the labor market, but also focus on providing opportunities to individuals who have been displaced by technology and the global workforce changes. It's just as important to give them the skills they need to succeed, Yellen said.
The U.S. also needs to evaluate and improve the quality of the jobs we are creating and training for, Kinder said. "The reality is, this economy is producing a lot of really, really low-quality jobs, and they're growing in the future, they'll just be different than the ones we see today," Kinder said. That means that while digital progress may mean that self-driving cars will eliminate the need for rideshare drivers, or automation will lead to fewer minimum-wage fast-food jobs, low-paying jobs will not disappear in the U.S..
Instead, other types of jobs will come to exemplify generally undesirable, low-paying jobs that have little to no education requirements, such as home health aid, or personal care aid jobs, for example, Kinder said. This occupation is expected to grow exponentially over the next decade, with over a million of those jobs expected to be added in the U.S., according to the Bureau of Labor Statistics. That's more growth than many other occupations, including IT jobs. Yet the pay, upward mobility, and safety of workers in who work as home health aids is currently very poor and will not improve without intervention.
In fact, pushing through policy changes to improve the overall quality of jobs available within the U.S. may be just as, if not more important than expanding adult education opportunities, Kinder says. That's because there are so many barriers, particularly for adults, to go back to school. "It's really unrealistic to expect that everyone is magically going to go back [to school]," Kinder said.
"In addition to all the energy and activity that's going into getting people skills, we have to make better jobs," she says.