Jeremy Hobson: At 8:30 a.m. eastern time this morning it’ll be all about jobs jobs jobs. That’s when we’ll get the April employment report from the Labor Department. It’ll tell us how many jobs were added in April and what the new unemployment rate is.
But right now we’re going to focus on a different measure of the economy with our Economy 4.0 correspondent David Brancaccio, who’s been studying how our new economy can better serve more people. David, Good morning.
David Brancaccio: Morning.
Hobson: So your alternative index today is what?
Brancaccio: Call it the toil index.
Hobson: The toil index? Like blood, sweat and tears toil?
Brancaccio: Yeah, the hustle, the hours of labor you have to put in each month just to cover the rent or the mortgage. It’s the creation of a noted labor economist from Cornell University, Robert H. Frank.
Hobson: And these are the hours you have to put in to cover the rent or the mortgage on what kind of house?
Brancaccio: That’s the key, Jeremy. Frank and his team figured it’s reasonable that Joe Average/Josephine Average, want to at least buy or rent a typical house that’s in a public school district of average quality. Frank put it to me in this way:
Robert Frank: OK, I’m the average earner, let’s say the 50th percentile family. It’s got to be my goal to at least get my kids into an average-quality school. I think we’d think ill of a parent who didn’t at least have that high an aspiration.
Brancaccio: OK, but Frank finds that between the number of hours we have to toil away — the number of hours we work per month just to make the mortgage or the rent for the house in the school district of typical quality in a given area — has gone way up over the years. From 1950 to 1970, we had to work a little over 40 hours a month to get the house; it was kind of flat during that period. But since 1970, the number of hours has been going up, up, and up. By the year 2000, we were toiling away around 67 hours a month — just for the house.
Hobson: And why is that number going up so much?
Brancaccio: Frank says it’s about inequality, the widening gap between the wealthy and the rest. The wealthy push up house prices, the market follows, and wages are not really going up all that fast compared to the housing prices. So just to have an OK place to live in an OK school district, demands these longer hours of work.
Hobson: Marketplace Economy 4.0 correspondent David Brancaccio, thanks so much.
Brancaccio: Of course.
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