Headline after headline promotes the idea that the U.S. economy has a historically low unemployment rate that currently sits at 3.6%, with only September’s reading of 3.5% lower in the last 40+years. However, according to a Brookings Institute study, nearly 50% of America’s workers (age 18-64) are in low-paying jobs and making on average just over $10/hour or roughly $18,000/year. In addition, many of these jobs either don’t provide benefits or those benefits, such as healthcare and pensions, have diminished over time. Regional biases do exist, as nearly 6 in 10 workers in the South and West struggle under the burden of low-wage work.

The study looked at the country’s nearly 400 metropolitan cities and found that between 1/3 and 2/3 of the jobs in those areas were low-paying. Regrettably, there is a perception that most of these poorer quality jobs are occupied by younger individuals, but this study found that not to be the case.  In fact, most of the 53 million American workers in low paying jobs were in their prime working years of 25-54. For many of these Americans with fulltime jobs, they are not earning a living wage for their region. Worse, as our businesses migrate their employees to defined contribution plans (DC) from defined benefit plans (DB) the burden of funding one’s retirement falls squarely on the shoulders of those that can least afford the extra burden.

Brookings also found that some of the wealthiest cities with the strongest economies had significant issues with low-quality jobs, which might just explain why places like San Francisco (700,000 low-paying jobs) and Seattle (560,000) have such awful homelessness issues. One of the areas not touched in the study was the impact that this development is having on the health of those males that have been driven from the workforce at premature ages. Life expectancy continues to fall in the U.S (3 consecutive years) which is outrageous given our wealth and medical institutions. Depression, suicide, and drug abuse are increasingly common among those forced to work in low paying jobs.

Those not able to find high-quality jobs are most often found to be lacking a college education but given the extraordinary cost of attaining a college degree, it isn’t surprising. We currently have more than 41 million Americans with student loan debt that tops $1.5 trillion at this time. The implications are profound and have delayed family unit creation, initial home buying, and many other activities that were once completed by Americans in their 20s, which is no longer the case.

So given these developments, does it still make sense, if it ever did, to thrust a majority of Americans into DC plans? Should it be a surprise that nearly 50% of Americans have saved little to nothing for retirement? I shudder to think of what might happen to the vast majority of Americans currently in the workforce when technological advances (AI) truly begin to impact a majority of occupations.