Now that more data is in, the Bureau of Economic Analysis say that the GDP shrank during the First Quarter by 1% adjusted to an annual rate. If this were to happen again in the second quarter we would officially be in a recession. But, since we had an official growth rate of 2.5% in the GDP in the fourth quarter, I would bet against that happening.
New unemployment claims were back down again for last week and this would bode well for a good job creation number next Friday. This follows a good number for last month and would indicate little chance of an official recession. That doesn't mean that things aren't still crap for the majority of Americans. Things are so bad that several major employers of low wage workers are hinting support for, if not endorsing outright a significant increase in the minimum wage.
Increasing pay for minimum wage slaves would help the economy but doesn't address the falling wages for the traditional 'good paying job' that is simply disappearing. Volkswagen's non-union plant in Tennessee will only pay $27/hour as opposed to GM, Chrysler, Ford, Toyota and Honda that pay $52/hour. German factories (in Germany) pay still higher wages and much better benefits.
But is VW really out of line with these low wages? In US factories it's been the practice for a couple of decades that so-called second tier union jobs pay less than $20/hour with no prospect of ever getting real union wages, and increasingly they are being stripped of all benefits. As older full union scale workers retire, their good paying union jobs that built the American middle class are retiring with them.
With the next economic slump there will be another push to eliminate the pension benefits that these Reagan Democrats have been taking for granted. Their great grandfathers fought for Union scale, but Reagan convinced them that they were really capitalists, and American exceptionalism meant they would face no real competition from Asia for their jobs if tariffs were ended. These newly impoverished retirees that ended union scale for everyone but themselves can expect no sympathy from the second tier wage slaves that replaced them.
The high-tech jobs that were supposed to replace these 'dirty' (but good paying) factory jobs are disappearing even faster. The high-tech jobs that were actually comparable in pay to traditional factory jobs have largely disappeared and even the ones that pay in the mid-teens are being sold to China. People like Mitt Romney loot the cash from a company including its pension plan before crating up the equipment and shipping it to Shanghai getting a premium price for it because it eliminates US competition at the same time. Some might call this treason.
Speaking of traitors, median CEO pay has now crossed the ten million dollar mark, or 257 times average worker pay. This is up from 181 times worker pay in 2009. In other industrial countries CEO pay barely gets into double digit multiples of worker pay. Prior to Ronald Reagan, US CEO pay was less than 30 times worker pay, so we're talking a 1000% increase in pay in 30 years. And the ghost of Reagan says, "Well, I told you Trickle Down Economics would work", "What do you mean voodoo? Well there you go again."
Twitter @BruceEnberg - where you can find out who to call when you're covered in the GOP's ectoplasmic slime.