Jobs, Wages, and Growth

   By Bob Shapiro

I posted an article wondering why wages haven’t been going up faster, considering that the Jobs picture looks so good. Though many of you may agree with the article, I’d like to offer an alternative point of view.

Have jobs been increasing dramatically? No, the official numbers are being misreported in news stories. What IS happening is that the US jobs market continues to lose full time workers while gaining a larger number of part time positions.

If someone loses a full time, 40 hour a week job, and replaces it with two part time, 20 hour a week jobs, it’s a wash. The worker goes to two jobs for the same 40 hours of pay. But, in the ‘official’ reporting, the US has gained one job.

Looking at the Labor Force Participation Rate, we see that roughly 3% of the labor force dropped out – roughly 5 million Americans gave up hope – during the Obama years. And, since 2014, that hasn’t changed – the rate still is 63% participation, down from 66% ten years ago. The ‘official’ numbers look better than they are because those 5 million Americans just aren’t being counted any more.

Have wages gone up? Not much, but it’s worse than the CPI suggests. Since the days of President Reagan, the Bureau of Labor Statistics has been screwing with the numbers – and the lying took a big jump under President Obama. The BLS has continued to change the way the CPI is calculated – not surprisingly, the changes always make the current administration look better than before. To be clear, the number gatherers do a fine job, but the number crunchers massage that data in ways that ought to be a crime.

If the CPI price increase, reported currently as around 2%, were calculated as they were back in 1980 when Reagan was elected, they would show closer to a 10% rate today, according to www.ShadowStats.com. But, the media does a good job of convincing Americans that consumer prices are stable. Otherwise workers would have been militant in striking for higher wages, as their real wages were falling by 7+% a year.

So why is the jobs and wages picture so bad? In a word, Government. Regulations, like ObamaCare, Tax Policy, and FED Interest Rate Policy are killing the US Economy. ObamaCare imposes great penalties on employers who have full time workers. Some full time jobs are lost to part time replacements, while other jobs are lost as business profits shrink.

But, aren’t big companies’ earnings soaring? No. Current tax and FED policies encourage many public companies to buy back their own shares, even though the increased debt threatens the viability of those businesses. Dividing the company’s earnings by fewer shares gives an artificially inflated EPS, pushing up share prices. Higher stock prices benefit the company officers through their bonuses and stock options, which ought to land these criminals behind bars.

And then, there is the latest round of Minimum Wage hikes. Workers getting the Minimum Wage tend to be young, unskilled, minority people. They need a starter job where they can learn the skills to get a better job – skills like showing up every day (on time) and how to be polite to customers. It should be no surprise that burger flippers at Wendys and elsewhere have been replaced with machines – it’s simple economics. The Minimum Wage, touted by liberals as helping minorities, is as racist a law as I can imagine, since it hurts minorities disproportionately.

The only place that the article got something right was in noticing that the picture of retail is changing. Though traditional retail outlets still sell the lion’s share of goods, internet merchants like Amazon are grabbing a growing share. Will this continue? We’ll have to wait to see whether any of these online sellers are able to turn a profit large enough to justify their investment.

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