The current state of the job market is troubling. Although the economy is growing at 4%, the economy only created 157,000 last month. To put the in perspective, the economy needs to create 150,000/month to simply keep pace with natural job attrition, people switching jobs etc.... The 150,000 figure indicates the economy could do a whole lot better.
But below the numbers are some troubling wage statistics that indicate the middle class is slipping down the pole, possibly into poverty.
In the latest employment numbers, the Bureau of Labor Statistics (BLS) also released wage data. For 2004, the average hourly wage increased from $15.48 to $15.89, or 2.64%. During the same time, the following commodities increased at a higher rate:
Motor Fuel +31%
transportation increased +7.4%,
medical care increased +4.4%,
Education increased +6.8%,
water, sewer and trash collection increased +5.7%, housing increased +3.1%
One commentator has noticed this trend, and uses observations from both the right and left to prove wages are not keeping pace with inflation
But with headline inflation running at better than 3 percent year-over-year, that 2.7 percent may not purchase much for most families.
And in an age of downsizing, outsourcing, and new technologies that eliminate the need for human workers, wages are under increasing pressure.
A report from the Economic Policy Institute (yes, they are card-carrying opponents of President Bush) this week pointed out that the wage gap between men and women has shrunk a bit. Not because women are making more money on average, but because men's wages have stagnated especially in typically male-dominated industries like manufacturing
Lest we think that this hand wringing over wages is a product of the "whiny" Left, take a look at this survey from Michael Alter of Sure Payroll. His "Small Business Scorecard," based on actual payroll data from more than 14,000 companies, found that while small business jobs increased by 4.4 percent in 2004, the size of the average paycheck at small firms fell by 4.8 percent.
"More jobs at lower wages sums up the 2004 small business economy," Alter concluded, noting more people got jobs last year because small businesses were hiring.
These increases are already having a a negative effect.
After a decade of relatively tame prices, consumers are starting to feel the "ouch" of inflation as the cost of everything from coffee, candy and home appliances is marching higher.
It's not a sharp pain yet, and some call it hardly noticeable. But with companies such as Procter & Gamble Co., Hershey Foods Corp. and Whirlpool Corp. passing along the higher prices they pay for raw materials to their customers, it's beginning to get attention from people who shop in grocery, appliance and department stores.
But the supply chain, which seems to have absorbed most of the higher costs, may be reaching its tipping point. Analysts say a slowly improving economy is giving producers more confidence to pass on higher prices, especially as excess inventories dwindle and commodities, from green coffee to oil, stay at elevated prices.
"I think the faster rate of inflation is here to stay," said Nigel Gault, managing director of the U.S. economic service of Global Insight in Lexington, Mass. "The important thing is whether it is stabilized at the rate it is at, or whether it will accelerate even faster. That is the question."
Procter & Gamble linked its December announcement of a 14 percent increase in prices for Folgers roast and ground coffee to sustained increases in the cost of green coffee. It was the largest price increase for Folgers products in a decade, and one that analysts say could be permanent as manufacturers opt for higher quality and more expensive coffee beans in more varieties.
Also last month, Hershey, the nation's largest candymaker, cited rising costs for raw materials, packaging, fuel, utilities, transportation and employee benefits as reasons why it planned to raise prices on about half of its domestic candy line by approximately 3 percent early this year.
And, as has already been diaried, the minimum wage is nothing more than a ticket to homelessness:
In only four of the nation's 3,066 counties can someone working full-time and earning federal minimum wage afford to pay rent and utilities on a one-bedroom apartment, an advocacy group on low-income housing reported Monday.
A two-bedroom rental is even more of a burden -- the typical worker must earn at least $15.37 an hour to pay rent and utilities, the National Low Income Housing Coalition said in its annual "Out of Reach" report. That's nearly three times the federal minimum wage of $5.15 an hour.
"You get pushed into a situation where some necessities don't get paid for" because more salary must be devoted to housing, said Sheila Crowley, the coalition's executive director. "For people on low-wage fixed incomes, that's a chronic way of life."
We need to start framing this issue. Bush is going to use the "higher economic" numbers -- those that sum up grand trends -- in his favor. And, those numbers are pretty good. So we need to delve into the numbers that make-up the composite numbers to make sure Bush isn't bullshitting the country.