
by Steve
12/17/2004 08:54:00 PM
The recovery is showing up in stock values, corporate profits and other measures at the upper end of the economic spectrum. But in data more meaningful to most Americans, things don't look so rosy. Employment has trickled up during the past year, but still stands at 400,000 fewer jobs than in 2001. Productivity gains and outsourcing mean some U.S. jobs are gone for good.The Op/Ed piece went on to say:
Left unchecked, this type of disparity builds resentment. Until the captains of industry find ways to share more of the wealth with those in the trenches, they risk a political backlash against the policies that have made them wealthy.The last sentence above is the most interesting.
It is entertaining to me that what is always lost in this analysis is who are these captains of industry and major shareholders who are benefiting from the increase in stock prices? The answer is, largely, such wealthy groups as the California public employee pension fund. Any person who has any money in a 401K or other pension fund should be elated with the run up in value of stocks.
But who else benefits from these corporate fat cats' success? I guess the group that first comes to mind is the unemployed! Generally jobs lag behind the corporate profits. The reason for this is simple, you hire people when you have the money to pay them. Also, you hire people so you can make more money as your business opportunities grow. So the next piece in the puzzle is likely a nice pickup in jobs.
But all this presupposes that the jobs picture has been bad. Since well before the Presidential election, we have heard reports of new jobs that were less than, equal to, or well in excess of economists' expectations. One month is down. The next is up. The next month both numbers for previous months are revised. The first month wasn't quite as bad. The second month wasn't quite as good. But the sum total of all the movement is that we are nearly back to where we stood on Setember 11, 2001 when we lost a million jobs in one month. That is remarkable.
By Dave, at 7:03 AM, December 18, 2004
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A political blog mixing conservative New Jersey with libertarian California.
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Dave
New Jersey
Steve
California