Emily's Economic Inequality Blog Post: Jana

Emily Slusher

Ralph Drayton

Economics

23 December 2016

Economic Inequality Blog Post

Jana, a very close friend to me and my family has been working for us since my parents married and moved to Portland full time.  She graduated from high school and didn’t continue her education any further.  She and her husband married early and had children at a young age.  Regarding to houses, she has always bought.  She has lived in the same house since her children were born.  For work she has done the same since she started.  She started working when she was in high school, and her first job was working with an elderly women and taking care of her and here house.  She has done this same kind of work for her whole life.  This work gave her more flexibility.  Her husband works and she needed time to take care of her four children.  She does consider her salary a livable wage, but only with her husband’s work too.  Since she has four kids, her salary alone could not support her family.  If she was on her own it would be enough.  Her husband is from Mexico and became a United States citizen which opened many new doors for her whole family.  

As mentioned before, her only job experience has been with household care.  Even though she has only been through this kind of work, she started working at a fairly young age.  There is still inequality in her situation compared to many other U.S. citizens.  She has a modest income and considers herself to be in the middle class.  One factor to look at that may have caused some inequality is her level of education.  She has only been through high school.  If she would have gone through college, it can be assumed that there would have been many more doors open to her.  She also could have found new passions or interests to pursue which might have led her to living a different life.  Another factor to consider is a more personal one.  She had children at young age.  From that young age, her main focus was on here kids and not other things which could have reduced the inequality.  The main reason she took jobs like these were because of her kids.  Her main focus for her entire life has been for her kids.  Since this was the main focus in her life,  she didn’t have time to pursue her own interests and continue to learn new things, which could have created more opportunities for her.  

Assessing the causes and effects of her human capital can also explain Jana’s economic profile.  Her human capital is not as high as it could have been.  Her work skills are at a standard generic level.  Her skills could have been increased if she continued her education.  Just graduating from college can increase your human capital.  She does not regret having her children that early, but does agree that if she didn’t have children at that age she would have many more opportunities than she has now.  She possesses quite ordinary skills, but those skills did give her the opportunity to provide for her family economically and being able to take care of them.  Fortunately, her skills have been needed for us for a long time.  Another positive about her skills are that they are pretty versatile.  She can not only clean houses, but she can also take care of households and people from her first job.  

One graph to look at is the median household income in the United States.  Since about 2014, the median household income has been on an upward trajectory.  Even though Jana has a lower human capital and she works for a private entity, the rising median household income has helped her and her family.  Every few years, her rates increased, so she is at a very low risk.  Since her husband works too, his income has increased too, according to this graph.  With the rising household income, she can better provide for her family and make up for her lower human capital.              

https://fred.stlouisfed.org/series/MEHOINUSA672N

Another graph to look at is interest rates for the U.S.  Since about January 2009, interest rates have been very low compared to how high they were.  Since July 2007, the interest rates have been lowering from 6.25% to about .75%.  With these significantly lowered interest rates, her and her family have better access to borrowing money.  She has a pretty big family and two of her grandchildren have autism.  With this access to borrowing she can better help provide for her and her children’s families.

https://fred.stlouisfed.org/series/INTDSRUSM193N

One large question answered in this interview was if money equals happiness.  I learned from Jana that money does not necessarily equal happiness.  She first described her life being much better than her parent’s.  Her health has has a much better quality than her parent’s because her dad smoked.  She has more opportunity for herself, her husband, and her children.  Although she and her family have many more opportunities than her parents, she did state that her parents were very happy with their lives.  Life was much simpler and her family was more content.  There was no stress in her younger life and with more opportunities now, she feels that there is more competition along with stress.  What was interesting about this statement was that happiness is not only obtainable with money.