March Unemployment Rate: 4.7%

[STING2]

The March Unemployment rate in the United States dropped to 4.7% as over 200,000 jobs were added. Unemployment levels are now fast approaching the lowest levels of the Clinton administration which was a record for the country. The Unemployment level for all of year 2000 was 4% with one of the summer months dropping to 3.8%. The current unemployment rate will likely fall to 4.4% or 4.3% before the end of 2006. 2007 could potentially see unemployment levels equal to the best single year of the Clinton administration.

 

[melon]

Here's a necessary appendix to these stats:

http://www.nytimes.com/2006/04/05/business/05leonhardt.html

The Economics of Henry Ford May Be Passé

HENRY FORD was 50 years old, and not all that different from a lot of other successful businessmen, when he summoned the Detroit press corps to his company's offices on Jan. 5, 1914. What he did that day made him a household name.

Mr. Ford announced that he was doubling the pay of thousands of his employees, to at least $5 a day. With his company selling Model T's as fast as it could make them, his workers deserved to share in the profits, he said.

His rivals were horrified. The Wall Street Journal accused him of injecting "Biblical or spiritual principles into a field where they do not belong." The New York Times correspondent who traveled to Detroit to interview him that week asked him if he was a socialist.

But the public loved it. The country was then suffering a deep recession, and the Ford news seemed to offer hope. Within 24 hours, 10,000 men were lined up outside the Ford employment office in Michigan. The following year, Mr. Ford was mentioned as a future presidential contender.

The mythology around this story holds that Mr. Ford wanted to pay his workers enough so they could afford the products they were making.

In fact, that wasn't his original reasoning. But others made the point, and, in time, it became part of Mr. Ford's rationale as well. The idea became a linchpin in an industrial philosophy known as Fordism.

More production could lead to better wages, which in turn would lead to more spending by the public, yet more production and eventually even higher wages.

"One's own employees ought to be one's own best customers," Mr. Ford said years later. "Paying high wages," he concluded, "is behind the prosperity of this country."

This turned into a pillar of 20th-century economic wisdom. It's time to ask, though, whether Mr. Ford's big idea is as ill suited to this century as his car company seems to be.

By any reasonable standard, the last few years have been bad ones for most people's paychecks. The average hourly wage of rank-and-file workers — a group that makes up 80 percent of the work force — is slightly lower than it was four years ago, once inflation is taken into account. That's right: Most Americans have taken a pay cut since 2002.

But you would never know it by looking at the headline numbers on economic growth. From the standpoint of the broad national economy — the value of the goods and services the country produces — the last few years have been stellar. Despite two wars, soaring oil prices and business scandals, the economy has been growing more than 3 percent a year.

Henry Ford would have no idea what to make of this.

What was so comforting about Fordism was that it suggested that the economy operated on a virtuous, self-reinforcing cycle. Only when the middle class did well could the country do well. And as the country grew ever richer, so would the middle class.

In the last few years, however, the economy has kept growing in large part because high-income families — the top 20 percent, roughly — have done so well and have been such devoted spenders. Globalization and new technology have helped many white-collar workers make more money, even as those same changes have closed factories and depressed wages for others. Stock portfolios and houses on the coasts, meanwhile, are much more valuable than they once were, making their owners more willing to spend.

In fact, well-off families, not cash-short ones, have been the ones increasing their borrowing and cutting their savings the most in recent years, according to the Federal Reserve. In 1992, the top fifth of households, as ranked by income, accounted for 42 percent of consumer spending. By 2000, the share had grown to almost 46 percent, and it is probably not much different today. That may sound like a small change, but it's an enormous amount of money, a shift of $300 billion a year in spending from the poor and middle class to the affluent.

In Michigan, Ford and General Motors have been cutting thousands of jobs, creating the country's sickest local economy and hurting even well-to-do suburbs. Yet the Suburban Collection, a car dealership north of Detroit, sold 90 Bentleys last year, up from 70 in 2004. David Butler, a manager there, said he expected to sell more than 100 Bentleys this year. The car costs at least $180,000. The dealership also opened a Lamborghini showroom in January. It is true that Rolls-Royces aren't selling very well, but the main reason seems to be that Mr. Butler's customers don't feel comfortable being seen in a $300,000 car when the state is suffering so badly. "It's not that they can't afford it," he said. "It's because of the image it would give."

Wages are likely to rise slightly in 2006, but stagnation seems to be the norm over the long term. Except for a span of a few years in the late 1990's, the hourly pay of most workers has done no better than inflation for the last 30 years. Even some Democrats, who have long embraced Fordism, are coming to the conclusion that Mr. Ford's reassuring cycle is not the only thing that can keep the American economy humming. "You don't need an equitable distribution to have a sustainable recovery," said Jared Bernstein, a liberal economist in Washington.

Politically, though, I am not so sure that the current trends are sustainable. Before the 1990's boom lifted wages, stagnating pay had helped cause a series of upheavals: Bill Clinton's election, the Ross Perot and Pat Buchanan phenomena, the Republican takeover of Congress. Today, with the boom fading from memory, protectionism is on the rise, and President Bush's approval ratings are miserable.

So it seems as if now would be a good time to start talking about what to do. There has never been a shortage of ideas: helping more teenagers to finish college, training middle-age workers to switch careers, embarking on public projects like better highways and high-speed trains. Or we could pretend it's still 1914.

Nice to see that we're nothing but pawns for the wealthy.

Melon

 

[najeena]

You want fries with that?

 

[STING2]

Here's a necessary appendix to these stats:

http://www.nytimes.com/2006/04/05/business/05leonhardt.html



Nice to see that we're nothing but pawns for the wealthy.

Melon

A gain in spending power by the top 20% does not in of itself equal a loss for those below the top 20%. The average American enjoy's one of the highest standards of living in the world as shown on the annual UN Human Development Index. In addition, just look at all the things your average household now has compared to one from 30 years ago. 30 years ago, the average household had no computers, no internet, no cell phone, no game system, no small portable electronic gadgets, half as many cars, no VCRs, no cable, just a TV with rabbit ears and maybe 4 or 5 channels and the list can go on. What many young people consider to be a normal part of the day did not exist at all back then. Today your average household has all these things, and no, the government does not provide them for free.

As unemployment drops closer to 4%, available labor will became so scarce that business's will start to raise wages in order to compete to get the remaining available workers. This happened in 1999 and 2000 and even featured programs by some companies to bring young people from Europe to work for the summer.

The average American today enjoys one of the highest standards of living anyone has achieved in the history of the planet. U2's American fans are not all part of the top 20% income bracket in America, in fact I'd say the vast majority are not. Yet, they bought U2 tickets at a higher average price than any other country in the world.

 

[AliEnvy]

A gain in spending power by the top 20% does not in of itself equal a loss for those below the top 20%.

Oh no?

The average American enjoy's one of the highest standards of living in the world as shown on the annual UN Human Development Index. In addition, just look at all the things your average household now has compared to one from 30 years ago. 30 years ago, the average household had no computers, no internet, no cell phone, no game system, no small portable electronic gadgets, half as many cars, no VCRs, no cable, just a TV with rabbit ears and maybe 4 or 5 channels and the list can go on. What many young people consider to be a normal part of the day did not exist at all back then. Today your average household has all these things,

What you haven't recognized in this comparison of present day and 30 years ago was that what was considered a "normal part of the day" for middle class family existence back then was comfortably achieved on ONE average salary. So while in essence we "have" more, we work twice as hard for much less to achieve that same level while the top 20% let their stock portfolios do their work for them. Is that progress?

 

[MrBrau1]

Yay...more service jobs.

 

[Rono]

Yay...more service jobs.

With wages thats make them depend on tips to keep their household running.

 

[aislinn]

Yay...more service jobs.

...with little to no benefits and more people trying to support families on pitifully low wages! YAY!

 

[Irvine511]

... and still, no universal health care!

 

[verte76]

My own sister didn't have health insurance before she got married. That was scary. She came back from India with e. coli and terrible dehydration and thank God for her husband's insurance because they had to hospitalize her.

 

[Se7en]

this thread is hilarious.

 

[bonoman]

I love how you compare life today to 30 yrs ago. Did you not consider that none of those products were available back then? And like AliEnvy said, they are done on two incomes and more and more longer hours!

Really taking unemployment stats and throwing it in the faces of people that have jobs that pay shit really doesnt solve their pitifully low wages and lack of health care!

 

[Zoomerang96]

what a lame thread.

unemployment figures if not put into proper perspective, like sting2 failed to do (surprise surprise) mean absolutely nothing.

so what if unemployment levels are low when such a vast amount of the work force is being paid shit all?

 

[Zoomerang96]

the GOP and bush have suffered their lowest poll numbers ever this week though, which is some comfort to... you know... everyone in the entire world except for those who vote republican.

this according ipsos reid, and if their pro7ections are similiar to that in canada, then the republicans are actually even worse off. ipsos historically in canada have seemed to give conservatives slight bumps in numbers.

 

[Bluer White]

Yes, the glass is always half empty in FYM.

Go ahead and try to hold the Bush Administration accountable for 3 decades of stagnant wages. Democrats had better hope that the Fed keeps raising rates and breaks the stock market. Otherwise Dems won't be able to run on the economy with record home values, steady GDP growth, and yes, declining unemployment numbers. There are plenty of other issues that would give the Democrats more traction.

 

[Zoomerang96]

bluer white, the bush administration is probably going to be accountable for ruining a lot MORE than three decades worth or shit when all is said and done.

 

[Se7en]

the real estate market should be preparing for its bubble to burst. i can't see home values continuing to rise at these rates for much longer. who is going to be left to buy them? surely your average worker cannot afford $250,000+ homes.

 

[Zoomerang96]

the bubble is already starting to burst. you're absolutely right, those prices are impossible to maintain.

 

[nbcrusader]

what a lame thread.

unemployment figures if not put into proper perspective, like sting2 failed to do (surprise surprise) mean absolutely nothing.

so what if unemployment levels are low when such a vast amount of the work force is being paid shit all?

This is all BS. Now, people working =


No one is crying for wage rates, benefits, etc. from 20, 30, 40, 50 years ago.

Generations ago, people would be willing to work their way up. Now, people just want to start several rungs up the ladder.

 

[financeguy]

the bubble is already starting to burst. you're absolutely right, those prices are impossible to maintain.

I guess the wild and wasteful party will have to end eventually.

If the property markets of North America are over-inflated, those of Australia and Ireland are even more so.

 

[melon]

This is all BS. Now, people working =


No one is crying for wage rates, benefits, etc. from 20, 30, 40, 50 years ago.

Generations ago, people would be willing to work their way up. Now, people just want to start several rungs up the ladder.

If you're going to be goutraged, at least pay attention to what's being said in the thread.

People are right to question the quality of jobs in the American marketplace today. Underemployment is becoming the new phenomenon for new college graduates. Underemployment is not going to be recorded in unemployment statistics.

People want to work, but not just any crappy job. Go yourself.

Melon

 

[melon]

I guess the wild and wasteful party will have to end eventually.

If the property markets of North America are over-inflated, those of Australia and Ireland are even more so.

Real estate is as overinflated as the stock market of the late 1990s, mainly because the wealthy took their investments from the stock market to real estate. This is mainly why our stock market has remained stagnant for six years. However, the stock market is ripe for a comeback, and if it starts exploding again, real estate is going to run into problems.

Melon

 

[Irvine511]

Generations ago, people would be willing to work their way up. Now, people just want to start several rungs up the ladder.

and so many people born on third base walk through life thinking they hit a triple ...

 

[STING2]

Oh no?



What you haven't recognized in this comparison of present day and 30 years ago was that what was considered a "normal part of the day" for middle class family existence back then was comfortably achieved on ONE average salary. So while in essence we "have" more, we work twice as hard for much less to achieve that same level while the top 20% let their stock portfolios do their work for them. Is that progress?

30 years ago was 1976, not 1946! The whole two wage vs. one wage comparisons first became the rage in the late 1980s and early 1990s. The single wage household was for the most part gone or on the way out in 1976.

The average work week in 1900 was 60 hours, today its just under 40 hours in the United States and as low as 27 hours in countries like Norway. Worker productivity per hour is the highest it has ever been, and standard of living as measured by the annual UN Human Development Index is the highest it has ever been.

 

[STING2]

I love how you compare life today to 30 yrs ago. Did you not consider that none of those products were available back then? And like AliEnvy said, they are done on two incomes and more and more longer hours!

Really taking unemployment stats and throwing it in the faces of people that have jobs that pay shit really doesnt solve their pitifully low wages and lack of health care!

Ummm, that apart of the point I was making that such things did not exist back then. 1976 was not a one income world, that was 1946. The whole "failure" of American capitilism as evidenced by two income families was the rage back in the late 1980s and early 1990s when liberals claimed America's dominance had ended and "Japan had won the Cold War".

Median Household income in the United States is 49,000 dollars a year! The United States has the 10th highest standard of living in the world according to the United Nations 2005 Human Development Index.

 

[melon]

Median Household income in the United States is 49,000 dollars a year! The United States has the 10th highest standard of living in the world according to the United Nations 2005 Human Development Index.

Which countries are 1-9?

You'd think with all the bombastic nationalism we get everyday that we'd be #1.

Melon

 

[MissMoo]

I was a member of a one income household in the seventies. In fact most of my friends were as well. I would say it wasn't until the eighties that women needed (vs. those who did start working in the seventies because they wanted to) to work.

 

[nbcrusader]

and so many people born on third base walk through life thinking they hit a triple ...

And have the luxury of complaining about life from the high speed internet connections.

 

[STING2]

what a lame thread.

unemployment figures if not put into proper perspective, like sting2 failed to do (surprise surprise) mean absolutely nothing.

so what if unemployment levels are low when such a vast amount of the work force is being paid shit all?

Median household income in the United States is $49,000 dollars a year, one of the highest in the world. The United Nations Human Development Index for 2005 shows that the United States has the 10th highest standard of living in the world. The Unemployment level is an important indicator of the economic health of any country.

There is not another single country on the planet that more people try to get into every year than the United States.

The polls are not very relevant and are likely to go up given the amount of time, nearly 3 years, that Bush has left in office. What will the Bush bashers say when the only thing they hold onto week after week stops going their way?


You state this thread is "lame", but how many times have you elected to post in it?

 

[STING2]

If you're going to be goutraged, at least pay attention to what's being said in the thread.

People are right to question the quality of jobs in the American marketplace today. Underemployment is becoming the new phenomenon for new college graduates. Underemployment is not going to be recorded in unemployment statistics.

People want to work, but not just any crappy job. Go yourself.

Melon

People have been saying this since at least 1990, its nothing new. But the vast majority of college graduates who graduated in 1990 are making substantially more than their peers who did not get college degrees, in 2006.