American families continue to face large economic uncertainties as the economic recovery slowly moves into its fourth year. The U.S. economy has fortunately avoided slipping back into recession after the Great Recession of 2007–2009. But the combination of domestic issues such as large household debt burdens and fiscal challenges for local, state, and federal governments together with international challenges such as the European sovereign debt crisis and wide swings in oil prices have created an environment in which the economy, the labor market, and household incomes only improve very modestly, if at all.
The result is that families continue to struggle, even though unemployment and household debt are decreasing and jobs and wealth are increasing. Unemployment and debt remain unacceptably high and jobs and wealth remain unacceptably low. And improvements in key areas, particularly job creation and the housing market, remain remarkably slow. Policymakers have acted decisively in the past with payroll tax cuts and infrastructure investments, for instance, to strengthen the economic recovery. The same should be true now.
These families need more solid economic footing. Sustained and faster job creation should be policymakers’ top concern, especially for vulnerable groups such as African Americans, young labor force participants, and people without a high school diploma. Also required are income supports through, for instance, extended unemployment insurance benefits, higher minimum wages, and more opportunities for employees to join a union.
Policymakers also need to focus on helping households build wealth faster through measures to strengthen the housing market, help households save more money, and allow families to lower their debt burden even more than in the past.
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