US media: US economy is splitting into two worlds, with worrying employment trends for African American groups

The US-based "Wall Street Journal" recently wrote that the US economy is splitting into two worlds. On the one hand, the wealthy class is experiencing a surge in wealth due to asset appreciation, while on the other hand, the momentum of significant wage growth for low-income groups is gradually diminishing, leading to a widening gap between the rich and the poor.

The article points out that there are two diverging economic worlds in the United States today. For high-income earners and older Americans, the economy remains robust. They are still spending freely, and the value of their 401(k) accounts and real estate is soaring. But for many others, economic momentum has stalled or even reversed.

According to reports, the momentum of significant wage growth for low-income groups during the COVID-19 pandemic has gradually subsided. These individuals are cutting back on expenses, and some are even struggling to find employment. Unemployment rates among African Americans and many young people in the United States have surged. Housing prices and rents have risen sharply, making housing increasingly unaffordable.

According to reports, Bank of America data shows that for most of the past few years, the wage growth rate of the lowest third of American workers has exceeded that of the highest third. However, since the beginning of this year, high-income earners have been far ahead.

"As unemployment has slowly climbed and job growth has declined more sharply, wage growth has slowed, especially for low-wage workers," said Arindrajit Dubey, an economics professor at the University of Massachusetts Amherst. "Many had hoped that the reversal of wage inequality would become a long-term feature of American society, but this news has undoubtedly poured cold water on their hopes."

In addition, the bleak job prospects have sent the economic confidence of young Americans to rock bottom, with pessimism levels rarely seen since the University of Michigan began its monthly consumer sentiment survey in the 1970s. Young Americans aged 18 to 34 typically have the most optimistic outlook on the economy in the University of Michigan's monthly consumer sentiment survey. But since the beginning of this year, they have expressed more pessimism than those aged 55 and above.

Meanwhile, the employment trend for African Americans is even more alarming, with the unemployment rate jumping to 7.5% in August from 6.1% a year ago. Historically, African American workers have been more likely to hold low-skilled and entry-level positions than their white counterparts, making them more vulnerable to layoffs. They have long faced discrimination in the labor market, and this discrimination may intensify when overall hiring slows down.

According to a report by MSNBC, it is evident that Americans have become aware of the economic situation during the Trump era. A recent Fox News poll found that 52% of voters believe that President Trump is worsening the economy.

The outlet said that in 2024, many Americans who were unhappy with the economy turned to Mr Trump for help. As a presidential candidate, he promised to lower prices on his first day in office. So far, Mr Trump has done the exact opposite. For Americans, “they know what the cost of living is . . . and they know that America today is more expensive than it was last year”.