Alpert on The Daily Ticker: Low-Wage Jobs an All-Consuming Issue in U.S.
Dan Alpert’s EconoMonitor piece on the missing U.S. jobs recovery has proven a harbinger of widespread disappointment. The latest payroll numbers showed an inadequate 162,000 jobs created, supporting his diagnose of a superficial bump from low-wage hiring. Appearing on Yahoo Finance’s The Daily Ticker, Alpert explained the mechanics of the sputtering jobs recovery:
“What you’re seeing right now is the spreading of low wage growth and what you have now in this particular report that was issued today, is very actually declining increase, declining rate of increase in these low wage jobs. So it looks as though more of them were at the high wage level but really what happened is the low wage level jobs just stop growing as much.”
This helps explain the U.S.’s protracted recovery, with consumption giving little to no boost to GDP:
“Really, we have become a nation of hamburger flippers, of Walmart sale associates, of barmaids, of check-out people and all those those other people who are working at a very very low wages. And this is a situation that is eventually going to percolate into labor costs throughout all sectors. The bottom line is, you have a lot of people coming off unemployment you have for many many months. Those people were earning if you actually calculate it across the board, you’re talking about people who basically being paid the equivalent of 11.50$ an hour on unemployment. Throw in some food stamps, maybe you’re talking about 12 bucks. A $15 dollar wage to work versus $12 that you were getting – it’s no impact on the economy, the consumption is ruffly the same. That’s why GDP numbers and retail sales are so lackluster.”
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3 Responses to “Alpert on The Daily Ticker: Low-Wage Jobs an All-Consuming Issue in U.S.”
A few years back we saw a movement against Walmart to increase wages and present a health care plan for all workers. Moreover, this week I read that fast food workers are demanding higher wages and more hours. I don't blame or find fault with the workers but all these demands come as a higher cost to the consumer. Prices go up and demand goes down.
I wonder if the political affilliation of business owners and managers and the desire of some to derail or promote Obamacare and discredit or affirm Democrat politics is impacting or postponing the decision to hire. Has there been any research on the hiring policies of businesses owned by known Republicans vs. known Democrats? The political affiliation of some are well known. For example, I doubt that Papa John or the Koch bros. are hiring anyone full time, while Jeff Besos may be doing the opposite.
The average UC was $299 a week, call it $300, and that's $15,600 a year, which is $7.50 an hour for 2080 hours. For a family of four, poverty level is below $23,050. Alpert states UC is equivalent to $11.50 an hour, then add in the food stamps, $150 per person per month, $7,200 for a four person family. Still below poverty level. Well, Alpert's $11.50 an hour is about right, around $22,000 per year. Here's a CBO web page on Unemployment Compensation: http://www.cbo.gov/publication/43734 — In 2007 total cost was $33 billion, then the next five years cost $104 billion per year on average, $520 bn total for five years, now we're down to $94 billion and soon to $71 they think. Number receiving UC peaked at 14.4 million, up from 8 million average of 2004-2007. So an increase of 6.4 million in a working population of 114 to 116 million full-time workers (including 7 million temporary workers), 144 million total workers, and 155 mn in workforce, more likely 163 million if the labor participation rate had remained normal. The downward spiral is evident as aggregate demand creeps downwards. My blog: http://benL8.blogsppot.com