U.S. employers added 209,000 jobs in July, a second straight month of robust gains that underscore the economy’s vitality as it enters a ninth year of expansion.
The unemployment rate slipped to 4.3 percent from 4.4 percent, matching a 16-year low first reached in May, the Labor Department said Friday.
But growth in Americans’ paychecks — a persistent weak spot since the recovery began in June 2009 — remains stubbornly slow. Average hourly pay rose by 2.5 percent from a year earlier, the same tepid annual pace as in June. That’s below the 3.5 percent to 4 percent that is typical when the unemployment rate is this low.
The nation’s economy is still on a strong upward trajectory, according to the latest monthly report from the Department of Labor, which showed an increase of 211,000 jobs for the month of April. Unemployment fell to 4.4 percent, its lowest level since May 2007.
April’s strong showing puts economic growth firmly back on track after a miserable March, when only 79,000 jobs were added (revised down from 98,000), and paves the way for the Federal Reserve to hike up the interest rate next month.
California has reached a deal which will raise the state minimum wage to $15 an hour over the next few years. It’s likely to be formally announced by Jerry Brown later today. Such a deal raises such hopes, doesn’t it? All those poorly paid workers in Los Angeles and San Francisco will be able to pay their way in life. And yet there’s always that nagging doubt that such price fixing might turn around and bite us. And we actually do have proof of this: a report about what a $15 minimum wage will do to employment in Los Angeles City. This is not, by the way, a report by some from market fundamentalist like myself. This is from Michael Reich et al at Berkeley, stout supporters of a rise to $15. And yet even their report states that the net effect will be fewer jobs. And that’s after they play rather fast and loose with one of the major effects they are thinking of.
There’s also the problem that not all of California is all that rich so the towns of the Central Valley are going to have a much harder time. This simply isn’t going to work out well.
We do keep being told this most delightful story: that raising the price of something isn’t going to change demand for that same thing that has just risen in price. This does rather contradict most of what we know about economics and the price system: demand curves do slope downwards after all.
True, there is one well known exception, what is called a Giffen Good (the definition of which is a good where the demand curve does not slope downwards). The only proven examples of this are wheat noodles in North China and rice in South China. But the general point is accepted that it probably applies to the subsistence carbohydrate in subsistence economies. People are living so close to the starvation line that when the price of the basic foodstuff goes up they have to cut their expenditures on other foods (possibly, little tasties or sauces to get that basic glop down) and increase their demand for that basic subsistence food in order to stay alive. They’re limited by the fact that they already live so close to the 2,000 or 3,000 calories a day needed to keep going. So, this might also apply to tortillas in the poorer parts of Mexico, or mealie meal in sub-Saharan Africa and so on.
The way we hire and manage employees in America is fundamentally broken. Not only are unemployment rates still high in most cities, but approximately 32 percent of the current unemployed population has been unemployed for seven months or longer. Many people believe these long term unemployed workers no longer fit in today’s workplace, but they are wrong.
To combat this issue the White House just unveiled new legislation for getting America back to work with the recent signing of the Workforce Innovation and Employment Act. Key to this initiative is taking action against the human biases and “skills gap” separating many unemployed workers from the companies that could hire them. As part of the President’s initiative, 300 corporations have pledged to change hiring practices that discriminate against the long term unemployed, enabling qualified individuals to get back to work.
…the linkage, established using data on millions of randomly sampled Americans, was extraordinarily robust.
Doubling home ownership in a state can lead to more than a doubling of the jobless rate.
“I have become convinced that by boosting home ownership we have ruined our labor market,” Oswald said.
On a recent Tuesday, it was not a good day to be a millennial. They learned that, unlike any previous generation, they are entering their work life with an average of $22,000 of student loan debt. They were told by the HR chief of Intel that their liberal arts degrees (far and away the majority for them) are not valuable enough to stop the outsourcing of jobs offshore. One of their own, a 23 year old running a South Bay non-profit, described her struggles with debt and the bewildering number of jobs she’s held in the brief interval since graduation. All of this coming before Reid Hoffman, one of the founders of Linked In, declared that ‘…careers are dead’ and that they should expect to be employed as freelancers their entire working lives.
At a conference hosted by the Atlantic monthly, the National Journal and Allstate Insurance entitled “Millennials in the Next Economy” at UCLA, we learned some interesting facts about this generation who are 92 million strong. They are the most diverse generation ever: 40% are minorities. 28% are college graduates, making them the best educated (in terms of degrees, at least) of any previous generation, with 42% currently in school. 26% are seeking employment. Politicians should note that 72% are registered to vote and 39% believe the country is headed in the wrong direction.
But the one statistic that I found most interesting is, despite the economic collapse and the situation they find themselves in, 60% believe that they are in control of their own destinies, that their decisions will primarily decide the outcome of their lives.
Posted in News and Views, Peter Mehit
Tagged Allstate Insurance, Anderson School of Business, economy, employement, generation y, generations, jobs, Linked In, millennials, National Journal, Reid Hoffman, the Atlantic Monthly, UCLA, unemployment
This spells trouble for one especially vulnerable group — managers in their 40s and early 50s. They tend to be more expensive than their younger counterparts; they may lack some of the high-tech savvy needed to succeed in a more efficient workplace; and they face a downsized job market that will stay that way much longer than usual.