Wednesday, March 10, 2004
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The winners and losers in the current economy
The Heritage Foundation's Alison Fraser and Rea S. Hederman, Jr have a concise summary of who's benefiting and who's not in the current American economy. The key section:
So the sector that is supposedly most vulnerable to job loss from offshore outsourcing has actually created a significant number of jobs over the past year, when outsourcing was supposedly at its worst.
Funny that.posted by Dan on 03.10.04 at 12:36 AM
" So the sector that is supposedly most vulnerable to job loss from offshore outsourcing has actually created a significant number of jobs over the past year, when outsourcing was supposedly at its worst."
This is misleading, given the actual numbers.
I took a look at the BLS breakdown of "business services" as I am skeptical of the claim that offshore outsourcing has not had an effect on some of the job categories that Kash lists:
The table at http://www.bls.gov/news.release/empsit.t14.htm
Perhaps the increases in things like legal services is making up for a decline in the above (offshoreable) job categories.
some interesting information from Harper's Index, which is currently posted on their website (http://www.harpers.org/MostRecentIndex.html)
Estimated percentage of the 2.9 million U.S. jobs lost since March 2001 that have not reappeared abroad : 83 [Forrester Research (Cambridge, Mass.)/Bureau of Labor Statistics (Washington) ]
originally from Harper's Magazine, Vol. 308, No. 1845, February 2004, pg. 13posted by: mike dube on 03.10.04 at 12:36 AM [permalink]
The statement that wage increases outpace inflation is at least misleading if not outright false. For the months of Dec., Jan., and Feb. the total hourly wage increase is 1% according to BLS. Inflation increase for the months of Dec. and Jan. alone was .7%. CPI numbers for Feb. are not yet available so a direct comparision is not possible but given the spike in energy prices I would bet inflation for Dec-Feb outpaces wage increases. Where, precisely, did Heritage get its numbers?posted by: dmh on 03.10.04 at 12:36 AM [permalink]
While it may be tough for the unemployed to find new work, those working are less likely than before to lose their jobs and more likely to see their wages or hours increase.
That's cute. So the statement is true even if it's false that people are seeing their wages increase.
Deeply misleading.posted by: praktike on 03.10.04 at 12:36 AM [permalink]
Am I the only person that understands that the so-called job losses have occured following an economic condition which was neither sustainable nor desirable long term - i.e. a bubble. Are the "losses" not simply an inevitable post-condition? After all, what does the word "bubble" mean? The hand wringing makes me laugh. But then it is an election year. Are we really saying that 3% unemployment is really optimal and sustainable? However, it is certainly odd to find the traditionally saner segments of the finance/economic community also regurgitating the economically illiterate media line. Uhhh, 5.6% unemployment and sizzling (normally inflationary) GDP growth. Am I missing something?posted by: ken on 03.10.04 at 12:36 AM [permalink]
You are correct, I think. All the signs point to an economy slowly and gently seeking a point of equilibrium after the unsustainable state during the 90's.
I see nothing alarming or sad about a work-force in transition.posted by: GWM on 03.10.04 at 12:36 AM [permalink]
Nice sentiment but I believe incorrect.
The simple fact is that equilibrium requires stability, and the economy is anything but stable. In effect all this data does is illustrate, barring revolutionary technology or another bubble, the upper end of job creation. This is after all a highly energetic growing economy rising at a 4.1% GDP rate.
So when the growth rate of the economy falls, as it will regardless of desires or intentions, then the jobs situation will become far worse.
So we haven't reached a new equilibrium at all. Instead we've simply seen a readjustment of the existing crest and trough of the job creation cycle. A cycle that portends to shift ever downward in each successive iteration.
Economists of every stripe all agree that the current growth numbers are highly atypical compared to previous recessions and the long term employment growth average in the United States. It's not just coming down off the peak, we are WAY below average at this point and getting worse in accumulated missing growth every month.
Second of all, the way the Heiritage Foundation article stated that "It is also telling that the number of workers working part-time for “economic reasons,” as the BLS puts it (that is, they are unable to find full-time work), has fallen by nearly 400,000 since November."
If you look at an economy like South Africa, it has a roughly 40% unemployment rate. Because of this high long-term unemployment rate, people are forced into trying to start small businesses - often peddling cigarettes or magazines on the street and the like. This "Freelancing" or "small business growth" would be considered in the terms of the current economic apologists encouraging economic job growth!
As it turns out that the total revenue from these sidewalk vendors constitutes roughly 30% of South African retail sales. However, there is no disguising that most of these "freelancers" or "small-business people" lack basic medical care, live in poverty, and sometimes have no homes.
If this is the same definition of jobs, wage increases, and economic growth that we wish to apply to the United States then by all means let us go ahead. As it turns out the real unemployment number just including marginally attached workers is about 7%, and that if you include the decrease in employment-population ratio (people who have given up even looking for work and try to fill their time with other things) then it's about 10%.
The growth of freelancers, the decline of people working part-time that can't find full-time work, the fall of wages compared to real inflation as opposed to nominal CPI numbers.
Who here thinks owning a house is not considered an inflationary cost however? If CPI is to be believed then wages are outpacing inflation. If you actually want to have a house, then inflation is more like 6%+ in most parts of the country as a long term trend. Who thinks to have a decent job and not make less than your parents you don't need a college education? Anyone here want to claim that education costs are keeping in line with the CPI? How about medical insurance? One third of Americans according to the Census Bureau either have no insurance, are on Medicaid, or pay out of pocket for it. Retirement costs are rising too. Energy costs have been rising for several years despite previously stable/low oil prices. You want to keep the heat on in the winter? Even Greenspan has been worried about Natural Gas and to a lesser extent electricity.
So standard of living / cost of living inflation is risingmuch faster than the CPI and "cheap consumer goods". What the hell is a cheap Dell going to do you if you a) can't keep the lights on b) can't keep the furnace on c) can't afford a mortgage payment d) can't afford medical insurance e) have quality education priced out of your pocket book and f) pay through the nose for gas and food.
Gee, that "low inflation" is really helping.posted by: Oldman on 03.10.04 at 12:36 AM [permalink]
the dell might not be useful if you don't have electricity, but not being able to pay the mortgage, keep the furnace on, have "quality education", or afford medical insurance dont actually affect your ability to buy a dell
lots of people rent cause they can't afford to buy, or don't have enough to cover a down payment... do you know that the majority of ivy league graduates in NYC aren't paying a mortgage for their first 5 years out of school? the horror! and these people are making hundreds of thousands of dollars!!!
and um, subsidies that the left tends to support are what keeps food prices high (go see how tom daschle voted on that farm bill!) and same with environmental controls and fuel taxes!
bs detector is tripping!!! as usual, the left says its for the "common man" while doing all it can to screw them over and keep them dependent on the state. to coin a phrase, its the "conspiracy to keep you poor and stupid" though i imagine that since you're spouting leftist wisdom on the internet, you ain't po (I'll grant you the second part though...)posted by: hey on 03.10.04 at 12:36 AM [permalink]
I was very concerned about this issue, now I'm just concerned. The problem I have with it is that since the economy is recovering and companies are interested in growth (ie IT, accounting, HR, etc), I feel they should invest in American workers. Though there is cheaper labor available, American workers sure have built amazing companies in the past. Excluding all the rhetoric, it's as simple as that.
The light of hope I have concerning the job market came from an article detailing how the the stock market is slipping again.
"The selloff on Wall Street continued Wednesday, as the same old worries - higher stock valuations, slowing profit growth and a weak jobs market - dogged investors."
At least the weak jobs market has some bearing on shareholder value. When money is on the table, people realize that companies have pretty good fiscal years when there are Americans with some extra money in their pockets.posted by: Tom Dyess on 03.10.04 at 12:36 AM [permalink]
These are fun ones.
"the dell might not be useful if you don't have electricity, but not being able to pay the mortgage, keep the furnace on, have "quality education", or afford medical insurance dont actually affect your ability to buy a dell"
That was a spin that really went nowhere. What was the point you were trying to make?
"lots of people rent cause they can't afford to buy, or don't have enough to cover a down payment... "
Yes, and because mortgage payments are higher due to higher housing prices due to a strong housing market, people who rent their houses to pay the mortgage charge more as well.
"do you know that the majority of ivy league graduates in NYC aren't paying a mortgage for their first 5 years out of school? the horror! and these people are making hundreds of thousands of dollars!!!"
No, I did not know that. Wonderful piece of trivia. I recently bought a house and I DON'T make hundreds of thousands of dollars (not in a year anyway) What's the point? Did you know that the majority of people in NYC rent because there is a very limited amount of buyable real estate?
"bs detector is tripping!!!"
Yes... yes it is. Unbeknownst to you, you are the one holding the bs detector and there isn't anyone else around you.
"as usual, the left says its for the "common man" while doing all it can to screw them over and keep them dependent on the state."
"to coin a phrase, its the "conspiracy to keep you poor and stupid" though i imagine that since you're spouting leftist wisdom on the internet, you ain't po (I'll grant you the second part though...)"
I thought they took Mike Savage off the air. Is he still on XM?
I thought oldman made some very interesting points. I would much rather someone counter those points in an intilligible manner rather than mindlessly spewing regurgitated rhetoric.posted by: Tom Dyess on 03.10.04 at 12:36 AM [permalink]
I'm with Ken -- most of the hand-wringing is panic.
Jobs usually follow employment by 12-18 months right? What we've got this time is multiple markets for the jobs to follow. Those markets went different directions, producing sideways movement for the economy as a whole, and the jobs market as a whole also went sideways for a while (according to prophecy). EG, information jobs rose and fell according to the NASDAQ bubble. Some sectors followed the uptick in GDP when it split from the bubble's collapse. Manufacturing has been anomolous, but it has been for years -- it was flat during the bubble years, began to collapse when the GDP/Bubble pair collapsed, and then kept following the bubble trend down instead of following GDP up (bizarre, but so was flat employment during the bubble).
We are just reaching the 15 month point where the X-shaped economy turned upwards, and lo and behold, information and factory jobs have stopped bleeding... Whodda thunk it? If they follow the trend, they will be flat for another month and then start picking up heavy; add those to the sectors that are already producing jobs and we are talking about +200k jobs per month by June/July, no sweat.
As to the current stock market, it is pretty clear from that the last few months have been above trend, producing a mini-bubble bounce. We are due a correction.
My only real fear is a housing meltdown which continues to seem unlikely as long as rates stay where they are.
Actually the people most upset about outsourcing seem to be the ones who want their next Dell consumer PC to go down in price from $299.00 to something like affordable like $275.49.posted by: Steve Jobs on 03.10.04 at 12:36 AM [permalink]
Thanks to your bolding of the prior sentence, I wonder how many pay adequate attention to the sentence "Most unemployed now are new entrants to the labor force and reentrants who have been out of the workforce for some time."
Are these 'remainders' any less important? And how many of them are there? And why are they out of the work force? Shouldn't we know these relevant figures before we adopt a rosy perspective?posted by: Hired Contrarian on 03.10.04 at 12:36 AM [permalink]
"I thought oldman made some very interesting points. I would much rather someone counter those points in an intilligible manner rather than mindlessly spewing regurgitated rhetoric."
I'll give it a shot...
"Economists of every stripe all agree that the current growth numbers are highly atypical compared to previous recessions and the long term employment growth average in the United States. It's not just coming down off the peak, we are WAY below average at this point and getting worse in accumulated missing growth every month."
But it still remains that we are at what is also considered by "Economists of every stripe" to be the lowest sustainable unemployment rate. It's simply not right to compare to the peak during the bubble and think that it's relevant or insightful.
Likewise, it is difficult to compare the ecomomies of South Africa and America. A vast majority of the population in SA was kept in poverty using artifical forces for so long, that it will take a long time for the damage to be repaired. What you are seeing, by your own numbers, is a strong entrepreneurial spirit adapting to difficult circumstances..i.e., the market at work.
"Who here thinks owning a house is not considered an inflationary cost however? If CPI is to be believed then wages are outpacing inflation. If you actually want to have a house, then inflation is more like 6%+ in most parts of the country as a long term trend. "
Depends on which side your on. Once you buy the home, your expense is fixed and non-inflationary, and the appreciation could count towards unrealized income, thereby helping your "income" to far outpace inflation. But even before that, we've seen that rental rates are not tracking with appreciation. Hence, in the strongest housing markets your seeing monthly rental rates siting at about 0.5% of real property value when most investors prefer to see a value close to 1%. To keep that ration, rental rates can only have been increasing at half of the rate of property appreciation.
"Who thinks to have a decent job and not make less than your parents you don't need a college education?"
I do. I think I agree with this statement, but it worded so strangly that I'm not sure, so I'll put it this way. I have less college education than my parents and make more than both of them put together. I own my home, something my mother only recently accomplished and at 28 I had purchase two new cars inside of an 18 month timespan, again ahead of them. I am the sole wage earner for my family, while both of my parents worked. I am considerably better off than my parents today, let alone when they were my age. Most of the people I know are better off then their parents and at an earlier age, with less or similar education.
"Energy costs have been rising for several years despite previously stable/low oil prices. You want to keep the heat on in the winter? Even Greenspan has been worried about Natural Gas and to a lesser extent electricity."
I agree the energy prices are a concern, of course ANWAR would help with that tremendously. But from the standpoint of my household, energy costs represent a very small fraction of our real expenses (somewhere in the 5% neighborhood), that moderate flucutions do not adversly effect our decisions to purchase shiny new Dell computers or not.
"Gee, that "low inflation" is really helping."
I'm a fan!
TomCarrposted by: TomCarr on 03.10.04 at 12:36 AM [permalink]
I have a challenge to all those who think that a flat job market and offshoring jobs isn't a problem. Each of you that says it isn't a problem should try to find a job that pays more than $12/hour and includes benefits. No fair to use your contacts, just what training and experience you have on your resume. If you even get an interview I'll be surprised. You'll find out that nobody will actually read your resume because they got swamped with 400 of them and instead run them through a keyword search. Since you're competing with hundreds of other applicants for one job, you'll also find out that, most likely, someone else has better credentials are sexier keywords than you do.
As for the myth that offshoring is good for the American worker and consumer, Companies are explicitly using the threat of offshoring jobs to intimidate current employees into accepting low wages and poor benefits.
I lost my day job about 18 months ago and after wasting my time looking for another job I realized that I had a better economic prospects growing my small business than trying to work for someone else.
I'm willing to bet a custom embroidered golf shirt than none of the folks who have posted apologies for outsourcing here are unemployed.posted by: ronnie schreiber on 03.10.04 at 12:36 AM [permalink]
"I have less college education than my parents and make more than both of them put together. I own my home, something my mother only recently accomplished and at 28 I had purchase two new cars...".
Congratulation Tom. And what does it prove, exactly?
A neighbor's kid has much more education than his dad, including an MBA from a top school. Makes less money than his dad made as a lowly IT worker when he was his son's age. This proves as much as your anecdote - nothing.
Actually I think oldman is wrong in his convoluted assertion. For some reason oldman is not aware that heavily unionized male-dominated skilled trades (plumbers, electricians, etc) make more money than most college educated white color employees.
Now those trades are doubly attractive, in most cases they cannot be outsourced.posted by: Mick on 03.10.04 at 12:36 AM [permalink]
Drezner cites some propaganda piece from a big business think tank:
"While it may be tough for the unemployed to find new work, those working are less likely than before to lose their jobs and more likely to see their wages or hours increase."
Unless unemployed are unskilled and illiterate (and there is absolutely no indication of that), they compete with currently employed for jobs. So why is it less likely to employed to lose their jobs?
And what 'before' means? Before 2004? Before 2000? Before 1945?
And why Drezner cites such low quality propaganda? There is better propaganda available, Open-Borders have enough money to buy themselves pretty smart whores.posted by: Mick on 03.10.04 at 12:36 AM [permalink]
In other words, those who claim that offshore outsourcing is causing people to lose their jobs are pretty much wrong.
Explain that again to me and the other 650 people laid off just two weeks ago from the company I used to work. Engineering moved to Canada, support to India and China.posted by: Outsourced on 03.10.04 at 12:36 AM [permalink]
Be fair. Tom answered a question that was asked. In much the same way, if I said "yeah, I have offers for jobs like that" to Ronnie, it wouldn't necessarily prove much, but when you ask a rhetorical question, you've introduced the topic.
Can't really complain myself. Good job, pay keeps me comfortable, in an industry that didn't exist fifteen years ago and a job that didn't exist five years ago. There are other advantages to technological progress than productivity gains, though that is not to be underestimated either.posted by: AvatarADV on 03.10.04 at 12:36 AM [permalink]
Want a job?
Go into sales.
If you can hack it it's permanent employment.
There are always sales jobs available, from entry level to executive level.posted by: Rob G on 03.10.04 at 12:36 AM [permalink]
Its a big country in a large world. Everyone posting here is right in some way. (The three blind men describing an elephant.) We are going through a shake-out. Pray the politicians don't turn it into a shake-down. What you pray for is what you get in the long run. We prayed ourselves into today. We will pray ouselves into tommorrow. May your prayers be pleasant.posted by: huggy on 03.10.04 at 12:36 AM [permalink]
The sectors reporting growth are either heavily regulated i.e. protected from overseas competition or have a low cost of entry. What does an unemployed manager, IT person, administrator, or accountant do? "Consult" i.e. start their own business. It doesn't mean they're making any money. But it does mean that they leave the unemployment rolls.
The number of unemployed engineers in this country is the highest of any time in history. Salaries in tech and IT are flat and, despite numerous predictions to the contrary, are likely to remain that way.
All of the job growth in recent quarters has been in government. Is that your formula for a re-vitalized economy?
What needs to happen is not an increase in consumer spending but substantially more investment by businesses. And the investments have to be in this country. There's not much sign that either of these things is happening.posted by: Dave Schuler on 03.10.04 at 12:36 AM [permalink]
I am a 43 year old white male with an engineering degree and 20+ years of experience in a variety of topics, not just engineering. I have been unemployed for six months now.
In that time I worked one temp job for two weeks, then had about a half dozen job interviews. One job was interviewing literally a hundred candidates for one job. Another started to follow up on my references and called me, angry that all they would do is confirm that I had worked there when I said I did. (Both companies had been sued by ex-employees in the mid 90s when references that were more detailed were less than glowing, so now all they do is confirm employment dates and job titles.)
Another looked very, very good - until I went for the final interview and listened to the man who had the final say tell me for 20 minutes why he wanted to shut down the entire plant.
Another went well, but they wanted an engineer who was used to working with Union people.
The others I never heard back from.
I have also interviewed for tech positions, grocery store jobs, taxi driver, warehousing and just about everything else. I uniformly hear that I am over qualified, differently qualified, or too old. Yes, they said it and what can I do. Sue them?
We are faced with having to sell, file bankruptcy, then move in with my 80+ year old parents in another state while we try to start over.
I will point out that I have been looking all over the country, and am willing to relocate, even on my own nickel. Nothing.
I am currently trying to find something I can that will let me make money and not cost much to start.
Mow your lawn lady?posted by: Daniel Safford on 03.10.04 at 12:36 AM [permalink]
Unless unemployed are unskilled and illiterate (and there is absolutely no indication of that), they compete with currently employed for jobs. So why is it less likely to employed to lose their jobs?
Mick, I think your second sentence confirms your first.
I have a challenge to all those who think that a flat job market and offshoring jobs isn't a problem. Each of you that says it isn't a problem should try to find a job that pays more than $12/hour and includes benefits. No fair to use your contacts, just what training and experience you have on your resume. If you even get an interview I'll be surprised.
Okay, Ronnie, how's $16/hr. w/benefits. I knew no one at this place before pulling their ad off Monster.com. Pay's only a little less than my last job and the pressure is much less. Plus it's a shorter commute. That's no small thing in the L.A. area.
I spent 2-1/2 years "on the beach" after getting downsized from an IT support job. I "wasted a lot of time" too before learning a few things.
1) Pay no attention to jobs advertised through agencies. They're either bait-and-switch deals or, as you said, they go to people with better acronyms than you. Ads placed by actual employers, on the other hand, are the real deal.
2) Be flexible. I got my current gig because I don't mind working graveyard shift. They were having trouble keeping staffed at those hours.
Good on ya about doing your own business thing, by the way. I'm looking to do something along those lines myself down the road. Mazel tov.posted by: Dick Eagleson on 03.10.04 at 12:36 AM [permalink]
I love to hear all this stuff since largely no one knows what will happen. The USA has always seemed to find its way after tough times since we are a hard working, resiliant people.
I remember during 2000 people contantly saying to me 'Its different this time. This is the new paradigm.'
Well, it wasn't different that time, the economy collapsed and won't be different this time, the economy will rebound. Jobs will come back like they always do.
I think we need to keep in mind that employment may have grown a little too rapidily during the late 90's and now we are paying for that. No comfort to the unemployed like me but it something that we have to face and deal with.
Times, they are a changing but we will always prosper.posted by: Glenzo on 03.10.04 at 12:36 AM [permalink]
I think one very important thing is being left out regarding hte health of the economy.
I am in Ohio. Ohio lost more jobs than any state. Around 260,000, which would be about 10% of all job losses.
I would love to find out how many jobs were lost in NY.
Oh yes. I didn't mention in my previous post that I live in Hong Kong. Lots of jobs are being outsoursed to here in China....to largely brand spanking new state-of-the-art factories. Very productive and very cheap. And Chinese unproductive companies have been closing putting millions out of work here too. Lots of dislocation here too. I've read that China has had net losses of manufacturing jobs also [3 million ish]. Hard to believe and difficult to prove. Keep in mind, no healthcare or benefits to be found on this continent.
We Americans are going to have to figure out how to live with less health benefits....whatever the heck that means!
This is the real world. Most people on this globe has less than we do by a gigantic margin and its nice to see some of these peopel gaining something by the fruits of their hard work and labor. Get used to this new world and adjust to it. It isn't going to change anytime soon.posted by: glenzo on 03.10.04 at 12:36 AM [permalink]
I must admit that trying to discuss economic problems amidst people more interested in political posturing is somewhat annoying. Could we all agree that Bush = Hitler and Kerry = Jackass? That Democrat = Socialist Bastard and Republican = Corporate Whore?
Then perhaps we can get down to the actual debate. Eh?
My own figuring is that we may be on the threshold of a double-dip recession. I would say "Would" except that a) Greenspan has been signaling that he "expects" employment to grow and has been touting ARM's and that b) Mortage rates have dropped about 20 basis points in just a few days. If the mortgage rates coupled with an easing in the dollar situation by recent BOJapan targeting of short-sellers, then we may actually see Greenspan move to cut 25 basis points if the economy continues to falter.
Lower consumer confidence numbers, fluctuating or delayed job growth, drops in sales of items like cars, etc. .. indeed the drop in initial unemployment claims and the slowing of firing that this represents may embolden him into thinking that the economy has hit bottom and just needs a bit more "juice" to great jobs growth.
So in that case, it would delay the reckoning for a while and perhaps eventually trigger the greatest asset deflation correction "crash" of all time. Hehe. Indeed, the fair tulips of our markets are wilting even now and perhaps Greenspan shall ride into save the day. Only he can't.posted by: Oldman on 03.10.04 at 12:36 AM [permalink]
I feel terrible for those out of work for 6 months or more...but I also feel a bit amazed that professionals unemployed for that amount of time are talking about bankruptcy.
I'm 30 years old, despite suffering $12/hour jobs and $5.50/hour jobs--both offered catastrophic health insurance by the way, 7 years of college, and two years of graduate school I've managed to save up enough money to live comfortably for 1 1/2 years without a salary.
The only thing I think we should complain about is that the government hasn't exactly made it easier for us to get health coverage. I know last year that Labor Secretary Chao was supporting Association Health Plans(clubs/associations could buy health care and only have to meet federal, not state guidelines for coverage) Seemed like a great idea, I could have bought my health coverage through my local small business association and it would have been illegal to turn me down! But I guess that has been struck down--Blue Cross/Blue Shield was against it. Anyone know anything about it?
Now I have a state job for benefits, and have my own business on the side. I'd like to give my state job to someone else...
posted by: Carolynn Crouch on 03.10.04 at 12:36 AM [permalink]
Oldman -- Car sales dipped as a return to normal rates in Calif. 1% drop in national sales is almost entirely due to the ~15% drop in sales in Calif. When Grey raised the registration fees, sales plummeted. When Arnie dropped them, sales spiked. Now we are normalizing.
Not everything is bad news... That is an acorn, not the sky.
Laid off in April. New job in May. Company I had never heard of before they called me. Just under $15/hour. In accounting.posted by: michaelh on 03.10.04 at 12:36 AM [permalink]
Bill Hobbs this morning, regarding remarkable growth of smaller businesses (Read htat employers) in Tennesee:
The LLC story goes on to note that 7,412 LLCs were registered with the Tennessee Secretary of State's Division of Business Services office in 2002, 500 more than that the previous high in 1998, and 40 percent more than in 2001. NBJ also notes that "total for-profit business formation also set a new high" in 2002, with 15,064 new for-profit corporations, LLCs, limiter partnerships and limited liability partnerships being registered with the state, well above the previous high of 14,565 in 1997, and up 22 percent from 2001.posted by: Bithead on 03.10.04 at 12:36 AM [permalink]
Ronnie Schrieber suggests I try to find a job that pays more than $12/hour and includes benefits. Why should I? I'm doing just fine at $12/hour and no benefits, in an industry that didn't exist twenty years ago and a job that didn't exist ten years ago. I didn't even have to try to find it; they called me two weeks after I got laid off at a competitor.
My wife makes a lower wage, and works 64 hours every two weeks, but her job in health care provides better benefits than I can find. On this combined income we lived a life we find luxurious, and last year we banked over $6,000 dollars. This year, thanks to the above-mentioned inflation in house prices and the Clinton-era "tax cut for the rich" we'll be banking 6 figures.
1. My own figuring is that we may be on the threshold of a double-dip recession.
I absolutely agree.
My thinking is that consumer confidence and spending will be supported by the tail end of the home refinancing surge and tax refunds through Sept/Oct. About that time the money will start running out and the jobs situation will actually worsen. When that happens the economy will do a slow death-spiral with a massive plunge at around the end of the year.
2. I'm 30 years old, despite suffering $12/hour jobs and $5.50/hour jobs--both offered catastrophic health insurance by the way, 7 years of college, and two years of graduate school I've managed to save up enough money to live comfortably for 1 1/2 years without a salary.
You don't have any kids. Nor do I for that matter but I'm an unofficial "uncle" for a quite a few "neices". I can assure you that a kid or two bumps up the costs considerably.
3. New business startups.
Sorry man but people do that when there's no jobs available. Fact is that most people are just not able to competently run a business at all. That, coupled with insufficient capital and bad business plans, generally result in 80%-90% of those new startups failing within 3-5 years. Or less.
*shrug* none of that means anything unless people can actually make a living at it. If they can't, they're just wasting their time and money.
Which is usually the case.
True, I don't have kids (I just got married, and I believe in doing first things first). But I also haven't been in the workforce very long. If you can't save money either get another job (hey, I've at times held as many as 3) or change your lifestyle.
As for small business failures - I have to say as a small business owner, I think that your numbers are skewed. Most of the small businesses I know that don't go on end for different reasons -- my husband's small business just "closed" because he was hired by a client. If business failure statistics are gauged by tax statements it is going to look like he lost money this year, because a bill came in after he stopped taking on new contracts.
The point is, the numbers don't reveal the whole story. Here is an interesting tidbit on that topic :
I also know a lot of other small businesses that have ended because the owners move onto different things, join with other small businesses, etc. Usually, with my friends these changes have not been tragic -- just life phases.
Cheers.posted by: Carolynn on 03.10.04 at 12:36 AM [permalink]
[ The Heritage Foundation's Alison Fraser and Rea S. Hederman, Jr have a concise summary of who's benefiting and who's not in the current American economy... ]
The Heritage [ of great wealth ]Foundation is a propaganda mill for the the new American robber barons.
Hope you get some of those high five-figure speaking fees, Danny.posted by: David Davenport on 03.10.04 at 12:36 AM [permalink]
A recent paper by the Federal Reserve Bank of NY also documents the structural nature of the employment losses in this recovery and how they are related in large part to the overinvestment during the bubble. Details here.posted by: sytrek on 03.10.04 at 12:36 AM [permalink]
Spin, Spin, Spin.posted by: HI on 03.10.04 at 12:36 AM [permalink]
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