What is a good economy, and for whom?
Election time is around the corner, and we will be overwhelmed with selective data from one side of the political spectrum, stating that everything is going well and the other side denying that anything good happened or is likely to happen. The real questions are, what is a good economy, and for whom?
Our economy has not been good for most people in the nation, state, and county. A good economy that works for most people or, let us say, for all is not hard to define. A good economy is one in which everyone can find and develop their talent for a good life when they are born, regardless of their families’ economic and social conditions. A good economy is one in which everyone has a chance for success. A good economy is one in which people can work and afford a life that meets their basic needs and lives with human dignity. A good economy is an economy that lives in peace and harmony with itself and the environment and serves the common good.
According to the MIT Living Wage Calculator, an adult with two children in California needed a living wage of $56.48 in 2021. In Ventura County, the wage level of a family was even higher at $58.01, with an annual before-tax salary of $120,659. In Ventura County, only two professions, management and legal, offer such pay scales. In 2015, the same family in Ventura County needed a living wage of $31.9, which included more professions and institutions paying at such pay scale. How many professions experienced an increase of 82% in their pay scale from 2015 to 2021? The living wage for a family of one parent with three children increased from $ 40.49 in 2015 to $79.30 in 2021, at a rate of nearly 100%. In 2015, we had four categories of professions with such an average pay scale; in 2021, there were none in Ventura County.
According to the five-year American Community Survey of the U.S. census, 30.8% of families with children under 5 live with one parent, and 73% of them live with their mothers in Ventura County. These rates are higher in underserved communities and among lower-income families. Ventura County has had a chronic gender pay gap of 86% for many years, according to the U.S. Census. The rate varies among professions and types of institutions. It might be more challenging to question what happens in the private sector, but we can ask our local and state governments why they are among the ones with a much wider gender pay gap than the average. Ventura County’s local government gender pay gap is 78.4%, which has not improved much since a decade ago.
The problem with the gender pay gap is its impact on the lives of our families headed by single mothers and their children. Even for such a family with a living wage, which only applies to a very small proportion of working families, the cost of childcare as the proportion of the mother’s income after tax is more than 24%. If we look into what is happening to families in poverty, the ratio of the cost of care of children is 126% of the family income, and with minimum wage, it is about 90%. The health care and food cost for the same family receiving a living wage is 21% of their after-tax family income. This rate for poverty-wage earners is 110% of their income, and for minimum-wage earners, it is 78%. Knowing that more than 26% of families pay 50% or more of their income toward housing, we can only imagine what kind of life most of our families face in Ventura County, and the situation in California is no better.
A good economy requires knowing where we are and being transparent about the economic misery that many face. We must admit that working people’s lives are not improving. We need universal, high-quality, early-childhood education. This will be the most significant investment in our children’s lives and the greatest effective pay raise for the parents. We need a universal, high-quality, accessible healthcare system. This will reduce our healthcare costs as a proportion of our GDP and allocate our tax money to providing healthcare, not the colossal profits of big pharma. We need affordable housing, and the solution isn’t building houses for families who cannot afford to buy or rent them. The solution isn’t market-based.
By supporting those who support our families in the upcoming elections, we can start experiencing what can be called a good economy.
Jamshid Damooei, Ph.D., is the executive director of the Center for Economics of Social Issues and director of the undergraduate economics program at California Lutheran University.
This article originally appeared on Ventura County Star: What is a good economy, and for whom?
