Some interesting finds from
http://www.epi.org/content.cfm/ib219 "Why are people so dissatisfied with today's economy?"
"Jobs
President Bush has noted that 2 million jobs were created over the course of 2005 and that we have added 4.6 million jobs since the decline in jobs ended in May 2003. Doesn't that mean the labor market is getting back to normal?
Recent job gains lag far behind historical norms.
Last year's 2 million new jobs represented a gain of 1.5%, a sluggish growth rate by historical standards (Figure A). In fact, it is less than half of the average growth rate of 3.5% for the same stage of previous business cycles that lasted as long. At that pace, we would have created 4.6 million jobs last year. If jobs had grown last year at the pace of even the slowest of the prior cycles2.1% in the 1980swe would have added 2.8 million jobs. Over the last half century, the only 12-month spans with job growth as low as 1.5% were those that actually included recession months, occurred just before a recession, or were during the "jobless recovery" of 1992 and early 1993."
"Unemployment
According to President Bush, today's 4.9% unemployment rate is below the average rate of the 1970s, 1980s, and 1990s. Doesn't that mean we have a tight labor market?
Unfortunately, no, because the unemployment rate under today's circumstances is misleading as a gauge of tightness in the labor market. The unprecedented 26-month decline in jobs (from March 2001 to May 2003) followed by sluggish job growth ever since has caused many people simply to withdraw from the labor force. Only those who are actively looking for work are included in the calculations of the unemployment rate. However, the employment rate (i.e., the ratio of employed workers to the country's working-age population) provides a better gauge of tightness in the labor market for the 227 million people now of working age. The employment rate has declined from 64.3% in March 2001 to 62.8% in December 2005. If the employment rate had recovered to its March 2001 level, an additional 3.4 million people would be employed today. What's more, if the rate had increased by the average 0.6 point gain of previous cycles, 4.7 million more people would have jobs today (Figure B)."
"Declining wage gains
Don't rising health care costs explain why wages have not done well?
No, labor market slack has caused both pay and employer benefit costs to rise more slowly. Data on employers wage and benefit costs show that over the last year, wage and salary income per hour rose by 2.3%, the slowest year-over-year rate on record. That compares to a gain of 2.9% two years earlier. Over the most recent year, benefit costs (including employer-paid health insurance) rose 5.1%, down from 6.5% two years earlier (Figure F). As a result, growth in total compensation slowed from 3.9% to 3.1%. Because of the acceleration in inflation over that period, inflation-adjusted compensation declined by 1.5% over the last year in contrast to a 1.5% gain two years earlier. That fact, plus the fact that increases in profits are running multiple times the increase in employer health care costs, makes clear that the squeeze on wages is coming from profits and not from health care costs."
Just an interesting and relatively short article...WITH GRAPHS!!! (for those of us that like pictures...pretty pictures).
Several other * lies debunked in this piece.
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
