Thursday, August 25, 2005

The Real Story Behind Job Growth Numbers

When talking about job growth, why doesn't the media ever mention what they don't mention?

CHICAGO (Reuters) - U.S. job creation remains healthy even as record energy prices stir worries about a slowdown in hiring in some sectors, reports showed on Thursday. (that's today)
and the BBC:

US jobs growth at five-month high:
The US economy created 207,000 new jobs in July, the biggest gain in five months, according to official figures. At the same time, US unemployment remained steady at 5% for the second month in a row, continuing at a four-year low. (that's from today too)
And the real story?

Middle class families can't afford health insurance, can't afford school, have to hold down two and possibly three jobs just to maintain a normal standard of living.

Add to that: the current job rolls have the highest statistics of two and three job families in the middle class. But what's not mentioned is that the second, third or fourth jobs the middle class has to take on as a household, go into the job growth numbers. The same numbers the White House proudly points to as proving economic growth.

The reality?

The middle class is dying. They can't make a living. That's what the numbers mean.

The income gap in this country is now crushing the middle class. The job growth numbers speak to a desperate class, once thriving in America, the commerical engine of the internet and manufacturing and travel, who now must pull double duty days just to make enough income to manage their liabilities.

But as any student of capitalsim knows, for capitalsim to work, you need capital. You need a buyer.

So when the middle class fails, and falls into their lack of a safety net, people won't be using the George Bush $400 tax credit to go out and buy khakis at Banana Republic. They'll be buying gorceries at Food 4 Less.

And without the middle class, or with the remains of financially crippled one, the rich won't have anyone to reap profits from. And as corporate growth is crucial to keeping stock value high, investors happy, stock holders pacified, and wall street ratings solid, watch what happens when the engine of commerce is turned off.

Woops. Trickle down just got a lot uglier, becuase it's going to trickle back up.

Pretty far thinking, these Republican leaders, hmm?

Check out: the link above.


Blogger Balloon Pirate said...

I've mentioned this before, I think...either as a post here, or a comment somewhere else, but it bears repeating.

I make commercials for a living. Most of my clients used to cater to middle-to-upper-middle class clientele. Quality furniture, home theatre systems, custom-built computers, et c.

Most of them aren't advertising any more. Some are out of business. No matter what they do, they say, that can't get customers in the door. And the ones they get, usually leave because they can't afford the prices.

Right now my best client is a guy who gets high-risk customers into used cars. He's very good at his niche, he's quite honest, and he's making money.

My other clients? Not so much.

Except for the home theater guy. He's gone into custom-made, high tech installations. Thirty to past 100 grand per installation. He can't keep up with that part of the business. But the walk-in trade? Nonexistant.

It's because, as Phil writes, the middle class is shrinking. The ones who can afford the $1,400 sofa could also afford a $14,000 sofa. The number of people who can afford quality, mid-priced furniture is going down.

One of my favorite authors, Terry Pratchett, had one of his characters, a man who was dirt poor but now quite wealthy, make an observation about boots. Rich men, he noticed, could afford to buy sixty-dollar boots. Poor men had to buy ten-dollar boots. Those ten-dollar boots would wear out in a year, forcing him to buy another pair of ten-dollar boots. The rich man's sixty-dollar boots will last him ten years.

So after ten years, the poor man has spent 100 dollars on lousy boots, and the rich man spent 60.

This is where we are with our society today. Why aren't we saving? Because we need a new couch. Why do we need a new couch? Because the one we bought three years ago at Wal-Mart has fallen apart. I can't afford to go to the quality furniture store, so I buy another Wal-Mart couch. That will last me three years.

The flushing sound you hear is America's savings.

And it's not a new observation, but this bears repeating also: the Labor Stats do not consider the 'chronically unemployed"--those who have used up their unemployment benefits, but don't have a job, so the fall through the basement, making the official unemployment numbers look better than they actually are.


9:36 AM, August 26, 2005  
Blogger Philip Morton said...

Yeah, love that, take the chronically unemployed off the unemployed list because they're so unemployed they're off the system and unable to track. But boy, those numbers look good!

10:33 AM, August 26, 2005  
Anonymous Boni said...

Hey BP, I'm in advertising, too. And I've always thought our industry is like a canary in a coal mine. If ad agencies and production companies are doing well, then so is the rest of the country. But if clients are pulling back and agencies are laying off people, look out. And that's exactly what's been happening ever since Bush was elected.

7:01 PM, August 26, 2005  

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