Politics > Politics-USA > Hey, Georgie, lots of folks are outa work. When are they gonna see that recovery of yours.
| Topic: |
Politics > Politics-USA |
| User: |
"Harry Hope" |
| Date: |
30 Dec 2003 08:59:34 PM |
| Object: |
Hey, Georgie, lots of folks are outa work. When are they gonna see that recovery of yours. |
Our So-Called Boom
By PAUL KRUGMAN
It was a merry Christmas for Sharper Image and Neiman Marcus, which
reported big sales increases over last year's holiday season.
It was considerably less cheery at Wal-Mart and other low-priced
chains.
We don't know the final sales figures yet, but it's clear that
high-end stores did very well, while stores catering to middle- and
low-income families achieved only modest gains.
Based on these reports, you may be tempted to speculate that the
economic recovery is an exclusive party, and most people weren't
invited.
You'd be right.
Commerce Department figures reveal a startling disconnect between
overall economic growth, which has been impressive since last spring,
and the incomes of a great majority of Americans.
In the third quarter of 2003, as everyone knows, real G.D.P. rose at
an annual rate of 8.2 percent.
But wage and salary income, adjusted for inflation, rose at an annual
rate of only 0.8 percent.
More recent data don't change the picture: in the six months that
ended in November, income from wages rose only 0.65 percent after
inflation.
Why aren't workers sharing in the so-called boom?
Start with jobs.
Payroll employment began rising in August, but the pace of job growth
remains modest, averaging less than 90,000 per month.
That's well short of the 225,000 jobs added per month during the
Clinton years; it's even below the roughly 150,000 jobs needed to keep
up with a growing working-age population.
But if the number of jobs isn't rising much, aren't workers at least
earning more?
You may have thought so.
After all, companies have been able to increase output without hiring
more workers, thanks to the rapidly rising output per worker.
(Yes, that's a tautology.)
Historically, higher productivity has translated into rising wages.
But not this time: thanks to a weak labor market, employers have felt
no pressure to share productivity gains.
Calculations by the Economic Policy Institute show real wages for most
workers flat or falling even as the economy expands.
An aside: how weak is the labor market?
The measured unemployment rate of 5.9 percent isn't that high by
historical standards, but there's something funny about that number.
An unusually large number of people have given up looking for work, so
they are no longer counted as unemployed, and many of those who say
they have jobs seem to be only marginally employed.
Such measures as the length of time it takes laid-off workers to get
new jobs continue to indicate the worst job market in 20 years.
So if jobs are scarce and wages are flat, who's benefiting from the
economy's expansion?
The direct gains are going largely to corporate profits, which rose at
an annual rate of more than 40 percent in the third quarter.
Indirectly, that means that gains are going to stockholders, who are
the ultimate owners of corporate profits.
(That is, if the gains don't go to self-dealing executives, but let's
save that topic for another day.)
Well, so what?
Aren't we well on our way toward becoming what the administration and
its reliable defenders call an "ownership society," in which everyone
shares in stock market gains?
Um, no.
It's true that slightly more than half of American families
participate in the stock market, either directly or through investment
accounts.
But most families own at most a few thousand dollars' worth of stocks.
A good indicator of the share of increased profits that goes to
different income groups is the Congressional Budget Office's estimate
of the share of the corporate profits tax that falls, indirectly, on
those groups.
According to the most recent estimate, only 8 percent of corporate
taxes were paid by the poorest 60 percent of families, while 67
percent were paid by the richest 5 percent, and 49 percent by the
richest 1 percent.
("Class warfare!" the right shouts.)
So a recovery that boosts profits but not wages delivers the bulk of
its benefits to a small, affluent minority.
The bottom line, then, is that for most Americans, current economic
growth is a form of reality TV, something interesting that is,
however, happening to other people.
This may change if serious job creation ever kicks in, but it hasn't
so far.
The big question is whether a recovery that does so little for most
Americans can really be sustained.
Can an economy thrive on sales of luxury goods alone?
We may soon find out.
__________________________________________________
Well Georgie? You're the presidunce, got any answers?
Harry
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| User: "JimmyD" |
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| Title: Re: Hey, Georgie, lots of folks are outa work. When are they gonna seethat recovery of yours. |
31 Dec 2003 08:17:02 AM |
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Well Georgie? You're the presidunce, got any answers?
Harry
Jobless Claims Lowest Since January '01
By JEANNINE AVERSA
The Associated Press
Wednesday, December 31, 2003; 8:34 AM
WASHINGTON - New claims for jobless benefits fell last week to the lowest
level since President
Bush took office in January 2001, a sign that America's businesses are feeling
more confident that the
economic recovery is genuine.
The Labor Department reported Wednesday that new applications filed for
unemployment insurance
dropped by a seasonally adjusted 15,000 to 339,000 for the week ending Dec.
27. Last week's drop
marked the third week in a row that claims went down and left claims at their
lowest level since Jan.
20, 2001 - Bush's inauguration day.
The latest snapshot of the labor market suggested that businesses may be
feeling less inclined to hand out
pink slips to workers as the economy shows signs of gaining traction.
The report was better than economists were expecting. They were forecasting a
smaller decline that
would have pushed claims down to a level of around 350,000.
Claims have been below 400,000 for 13 consecutive weeks, something economists
view as a sign that
the fragile labor market may be turning a crucial corner.
The more stable four-week moving average of claims, which smooths out week to
week fluctuations,
decreased last week by 6,500 to 355,750, the lowest level since Feb. 10, 2001.
Poor Hairy, lost another issue.
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