Initial unemployment claims were down again for last week by 19,000 and the raw numbers unadjusted for seasonal factors dropped 95,000. Now that claims are “only” 366,000/week we should see the hiring trend pick up. This improvement wasn’t simply because of seasonal hiring, remember it’s adjusted for the season and major retailers did not do a lot of temp hiring this year. Retail sales aren’t really up much and it appears the Black Friday hype has also generated a huge number returns especially in big ticket items. Buyers are realizing they really can’t afford to spend the money, and this is going to impact final sales figures.
Some new numbers have come out from the conservative Financial Times pointing to why the US isn’t recovering. During normal times since WWII the worker share of business income has been 63% with 37% going to investors and management. This has been eroding since Reagan of course, but has dropped sharply in the last ten years.
During past recessions the workers’ share of income has always risen as profits were curtailed and would decline after recovery. During the current Depression however the exact opposite happened with worker share falling sharply in 2008. When the companies recovered back to normal operations the workers’ share continued to fall and is now down to 58%.
The difference between the historical norm and today is $740 billion or about $5000/worker per year. This is five percent of GDP and doesn’t take into account any multiplier effect from workers spending this money.
The new numbers on CEO pay at the top companies show a 37% jump for last year, and across a broader survey of 3000 companies the number was up “only” 27% on average. This is where the trillions are going and really I don’t think the numbers from the FT are adequate to describe what the 0.1% are really doing. They have become very skilled at hiding profits overseas that don’t show up in these statistics.
The long term damage to the country isn’t counted either. Crumbling infrastructure and the exporting of our manufacturing base are the things you can easily see. We are losing our skilled labor as they grow old and aren’t replaced, and all across the spectrum the educated people needed to have a first world country we are losing skills. All manner of engineers, medical researchers, architects and anything else you care to name is being outsourced, or the jobs simply disappear as demand shrinks.
More importantly our young people aren’t being trained or educated but are left to languish. American universities are granting half of their advanced degrees to foreign students to keep their own cash flow up. Republicans constantly harp that we should give all these graduates green cards so they would stay here and build America. This is just another hollow talking point, there are no jobs for them here, American professionals with decades of experience are going overseas to find work if they can.
The so-called skills shortfall talked about in media is simply a fabricated excuse to bring in more foreign educated workers who can afford to work for less as they don‘t have student loans. This in turn forces American graduates with student loans to take much less than adequate pay. That is if they can find work, half of recent grads are unemployed or working a jobs that don’t require any college.
New Census numbers show that nearly half of Americans now live below 200% of the official poverty rate. Republicans point to Census data that shows that a high percentage of these people own cars, have TVs and many own homes. No matter that they acquired these things when they made twice as much money as they do now and can never replace them as they have little chance of ever earning that much again. Their cars are essential as mass transit is cut back further to “save money”, and their house is under water. College for the kids is out of reach, and the near poor in this group don’t qualify for food stamps or Medicaid even if Republicans aren‘t successful in further cutting the safety net programs.
For the working poor, that $5000 per worker ($10,000 for a couple, maybe more for multi-generation households), that money being hoarded by corporate American and the greedy bastards that control everything would go a long ways. This is even without the economic boost putting the money into circulation would give. This would drive wages up still more as America became productive again, but that’s not the plan. www.prairie2.com