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August 16, 2005
Please, please get a clue
In Monday's Journal, we're going to be taking another of our periodic looks at the economy but, as a sort of preview, have a gander at this, from Terry Neal in todays Talking Points Memo:
| New polls out this week suggest majorities of the public continue to disapprove of the president's handling of the economy. Some Republicans are complaining that the media is not reporting the good news of economic expansion and job creation. |
I think it's kind of funny that I've been listening lately to some grousing about how disconnected the media is with the concerns of real people.
Clearly, however "disconnected" we may be, we are not as out of touch as the politicians are. The answer to that plaint isn't rocket science:
| "The question is, why do we still have a majority of Americans who say the economy is getting worse, not better when we're getting better official news from the economy and stock market," [Gallup Poll editor in chief Frank] Newport said. "The answer is that the official statistics focus on job creation and the stock market, and they don't necessarily reflect what's important to Americans." |
And what's important to Americans? Health care costs, energy costs, not having enough money to pay their bills, unemployment, retirement savings and education costs. In other words, "People have jobs, but their salaries aren't going as far, especially when they're paying nearly $3 a gallon for gas or have medication co-payments that have jumped from $10 to $40 in recent years, as some do."
This is what happens when people judge what is going on in the economy based on what is going on in the stock market. The more that working Americans have their compensation packages WalMart-ized, the less painlessly they're going to be able to survive on what they make. The bad news for microbusinesses is that people who are struggling to fill their refridgerators and their gas tanks are going to have trouble paying for much of anything else, either.
Like I said, not rocket science.
More in this in Monday's Journal.
Posted by The Journal Blogger at August 16, 2005 12:10 PM
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Comments
Dawn, thanks for pointing out how so many Americans don't think the economy is great even thought the number of jobs is increasing. Many of the jobs created over the past year have been in the relatively low-pay retail sector (+196,000). Here in the San Francisco Bay Area, 11,000 people applied for 400 jobs at Wal-Mart, which is paying Bay Area workers an average of $10.82/hour (keep in mind that the average apartment rent here runs $1300/month). Stephen Levy, who runs the Center for the Continuing Study of the California Economy, was quoted in the San Francisco Chronicle as saying, "'It's not about Wal-Mart -- it's about the rest of the labor market ... If the rest of the labor market was strong, you wouldn't have 11,000 people applying for 400 jobs.'" (see http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/08/17/MNGDPE91AH1.DTL&hw=wal+mart&sn=001&sc=1000).
Not all jobs being created are in the lower paid retail sector: The health care industry has added 259,000 jobs over the past year, and many of these are good paying jobs (although 28,000 of those new jobs are in home health care, which tends to be a lower pay industry, too).
Note: U.S. average hourly earnings for health care workers were $17.85 per hour for health care workers in July 2005, which was 40% higher than the average hourly earnings of $12.89 for administrative and support workers, and 44% higher than the U.S. average hourly earnings of $12.39 for retail workers.
Professional and business services employment rose a whopping 460,000, but more than half of the increase was in Administrative and support services (124,000 of which were temporary help services jobs).
With the two such diverse industries being the job growth engines over the past year, I wonder if the gap between the richest Americans and poorest Americans will increase in 2005.
Posted by: Anne Ramstetter Wenzel at August 18, 2005 03:11 PM