Posts Tagged ‘standard of living’

October Job-Creation Numbers Show Slight Uptick

Monday, November 26th, 2012

The October employment report won’t blow anyone out of the water, but showed a modest improvement that caused many to breathe a sigh of relief.  According to the Department of Labor, 171,000 jobs were added in October – the highest number since February.  Retailing (up 36,000); healthcare (up 31,000) and business services (up 51,000) showed the most significant gains.  August and September employment numbers were also revised upwards by 84,000 jobs.  The nation’s unemployment rate stood at 7.9 percent, a slight tick upwards from the 7.8 percent reported in September.

Possibly of greater significance is the fact that the workforce showed signs of growth, with the labor force participation rate rising to 63.8 percent.  More than 500,000 Americans started job hunting in October.  The current number includes 12.3 million people who have no jobs; 8.3 million who work part-time; and 2.4 million who have stopped looking for work.  Compare this with October, 2009 – at the height of the Great Recession — when the unemployment rate was 10 percent.  Prior to the recession, the unemployment rate averaged five percent or less. Even though it has declined from its peak, it is still approximately three percent less than what is considered to be full employment.

Writing in The New Yorker, John Cassidy says that “Over the past year, the total number of people employed has risen from 140.3 million to 143.4 million, according to the household survey.  After allowing for population growth, the number of people unemployed has fallen by a million, and the number working part-time or no longer actively looking for work has dropped by about half a million.  The number of people who have been out of work for more than six months – the hard-core unemployed – has fallen by more than 800,000, and it now stands at five million.”

Despite the upbeat news, Americans still are not seeing any improvement in their standard of living.  In October, the average hourly wage for workers in the non-farm sector fell one penny to $23.58.  Wages have risen a scant 1.6 percent in the last year, less than the inflation rate.

Upward Mobility in the New Reality

Wednesday, June 2nd, 2010

The Great Recession has taken a toll on the famous American optimism and belief in social mobility as defined by the The United States used to deliver a lot more social mobility – read the data.  stories of such luminaries as Alexis de Tocqueville, Horatio Alger and Barack Obama.  According to a poll by YouGov for The Economist, 39 percent responded that the opportunities available to them were not as positive as their parents’ experiences; just 36 percent reporting having greater opportunities than the previous generation.  Approximately 50 percent think that the next generation will have a lower standard of living and fewer opportunities for social mobility.

This trend is not new.  According to The Economist, “In 1963, John Kennedy declared that a rising tide lifts all boats.  Indeed, in 1963 this was true.  Between 1947 and 1973, the typical American family income roughly doubled in real terms.  Between 1973 and 2007, it grew by only 22 percent – and this thanks to the rise in two-worker households.  In 2004, men in their 30s earned 12 percent lease in real terms than their fathers did at a similar age, according to Pew’s Economic Mobility Project.  This has been blamed on everything from immigration to trade to declining rates of unionization.  But the driving factor, most economists agree, has been technological change and the consequent lowering of demand for middle-skilled workers.”

Americans tend to be remarkably accepting of comparatively high disparities in income because they still believe in upward mobility.  The truth is that America does offer opportunity, though perhaps not as much as most people believe.  A better yardstick of income potential is parental salaries, which suggests that social mobility is a less powerful indicator.  Americans born to the middle class have a 50/50 chance of moving up or down in income, according to the Economic Mobility Project.