Friday, May 05, 2006

How You Living?

How You Living?

“Economy's growth is strong, but workers wouldn't know it. The release of two government reports this morning provides a compelling look at what is right and wrong with the U.S. economy. The nation's gross domestic product (GDP), the broadest measure of the economy's strength, rose at an annual rate of 4.8% in the first quarter of the year, the fastest growth rate since the third quarter of 2003. At the same time, worker compensation rose only 2.4%, the slowest growth rate in seven years and well below inflation. The economy is doing fine, but most of the people working in it aren't faring so well.”

According to the US Department of Labor’s Bureau of Labor Statistics the unemployment rate remained the same for April 2006. If these figures are to be believed then the flap about immigrant taking native-born AmeriKKKan’s jobs is a bunch of cow manure. The latest BLS report states that unemployment in the African-American community was 9.4% the highest of all ethnic groups, “The number of unemployed persons (7.1 million) was essentially unchanged in April, and the unemployment rate held at 4.7 percent. The jobless rates for the major worker groups—adult men (4.2 percent), adult women (4.3 percent), teenagers (14.6 percent), white (4.1 percent), blacks (9.4 percent), and Hispanics (5.4 percent)—showed little or no change over the month. The unemployment rate for Asians was 3.6 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)” In effect our situation has not changed, black people as an ethnic group have the dubious distinction of having the highest rate of unemployment in the nation. You may say, “tell me something I don’t already know.” Well according to our government’s Bureau of Labor Statistics, “About 1.3 million persons (not seasonally adjusted) were marginally attached to the labor force in April, down from 1.5 million a year earlier. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached,
there were 381,000 discouraged workers in April, about the same as a year earlier. Discouraged workers were not currently looking for work specifically because they believed no jobs were available for them. The other 928,000 marginally attached had not searched for work for reasons such as school attendance or family responsibilities.”
If you are not one of those discouraged non workers who have given up because you don’t believe there are any jobs available to you, and you have a job, more than likely your wages have not kept up with inflation. According to the Economic Policy Institute a nonpartisan think tank whose self-described mission is: to provide high quality research and education stressing real world analysis and a concern for the living standards of working people, by making its findings accessible to the general public, the media, and policy makers; “Wage growth has been decelerating since 2000, and it has leveled off in recent months at around 2.5%, well below the historical average for this series (and below the inflation rate since 2004). Compensation has slowed as well since 2004, largely due to flat wage growth in tandem with declining benefit costs. For the last three quarters, compensation has lagged inflation as well. Though wages have clearly been on the rise lately, they are just about back to where they started at the beginning of the recovery (i.e., real hourly wages are almost exactly the same and weekly earnings are up about $1.30 in April 2006 dollars). In other words, despite strong economic and productivity growth over the whole of the recovery, any improvement in the living standards of working families has come from more hours of work, not from rising real hourly wages.” In other words we still are living in the midst of a jobless recovery and real wages have not kept up with the cost of living.
To make matters worse there are conflicting reports about the actual state of the economy. The Bu$h administration is touting the rise in economic indicators as the result of their fiscal policies. However the Economic Policy Institute which keeps track of economic trends and employment statistics says, “A recent White House news release contains this claim regarding income growth: ‘Real disposable income has risen 2.2 % over the past 12 months. Since January 2001, real after-tax income per person has risen 8.3%.’ ( Since income growth is the primary determinant of living standards, the validity of this claim is central to the White House's argument that their policies are lifting the living standards of most families. The problem here is that the measures cited are of limited use in judging the extent to which the recovery is truly reaching most families ... The second problem with the White House's claim is that the increase in inequality in recent years has meant that average income growth is less descriptive of how the typical family is faring. As growth has flowed up the wealth scale, middle and lower income households have not enjoyed even the modest growth shown in the average income figure above. Median family income declined not only in the recession year of 2001, but has consistently fallen in real terms through 2004 (down 2.9 %, or $1,500). Though median income results for 2005 will not be available until late this summer, the trend in median earnings, shown next, suggests things are unlikely to have improved much since 2004.”
While we know the Bu$h administration has a major credibility problem, we cannot be absolutely sure the Economic Policy Institute’s findings are correct and above board. The best indicator of your standard of living, is your own paycheck, your household budget and your savings/investment portfolio. How you living? Have your wages kept pace with the cost of living? Are you doing better today than say four or five years ago relative to the spending power of your wages? Are you working? Do you have “employment security” if such a thing exists? Or are you like many wage earners, facing the uncertain prospects of a layoff, down sizing or outsourcing? Does your compensation package match that of your CEO in relative terms? Are you satisfied your retirement or pension plan is secure? If you answered no to more than two of these questions then you are living with the bulk of working and middle class AmeriKKKans, on shaky ground.



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