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By Derek Schwabe
According to the Bureau of Labor Statistics, the U.S. economy has finally achieved full employment, traditionally defined as below 5 percent. The unemployment rate for June 2016 was 4.9 percent, up a little from May’s even more impressive 4.7 percent. As we have pointed out before, full employment and lower poverty and hunger rates almost always coincide (see graphic above). Thus, reaching full employment is imperative to meeting the Sustainable Development Goal (SDG) of ending U.S. hunger by 2030, among the SDGs the United States and nearly every other nation adopted in September 2015.
In the 2014 Hunger Report, Ending Hunger in America, we anticipated that “a strong recovery capped by a return to full employment would improve U.S. food security levels by 25 percent.” Well, we’ve finally reached the full employment mark. What happened to food security levels? The percentage of American families that are food-insecure reached a high of 14.9 percent in 2011, in the wake of the Great Recession. By 2014 (the most recent year with complete data available), food insecurity had fallen by only 6 percent, to 14 percent of households. So where is that much-needed 25 percent improvement?
First, let’s not forget that the latest report on the food-insecurity rate is two years behind the latest report on the unemployment rate. The U.S. Department of Agriculture is slower than the Labor Bureau in reporting its numbers and does so only once a year using data that is already a year old. Significant economic growth over these two years is almost certain to have reduced the food-insecurity rate by at least a percentage point. If the food-insecurity rate falls to 13 percent in 2016 (a reasonable guess), that would be a 13 percent improvement, more than half of the 25 percent we had thought full employment would bring. But where is the other half? The reasons we haven’t seen it yet are complex and varied, but experts agree on four key factors. Policymakers have yet to take decisive action on any of them.
Full employment is still the first and most vital step toward ending hunger in the United States. But it must be “real” full employment – counting missing and discouraged workers. It’s time for the Bureau of Labor Statistics to revise its methodology so that it captures realistically the harsh realities that most American workers — especially low-income workers — face in the post-recession economy. And income inequality, low-wage jobs, discrimination, and the decline of unions will limit the impact of full employment on hunger unless and until Congress and the administration take decisive action.
Derek Schwabe is a research associate at Bread for the World Institute.
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