Tuesday, May 31, 2005
Friday's employment report was deceptively benign.Though we allegedly only lost 35,000 jobs, we lost 27,000 manufacturing jobs. We've lost 100,000 manufacturing this year alone. We've lost 2.8 million manufacturing jobs since the Bush junta came to power. We are not regaining any manufacturing jobs. Those continue to decline. Over the last 2 years we've lost a total of 67,000 manufacturing jobs. Real hourly wages in manufacturing have declined 2.2% since December of 2003, consistent with a decline in labor demand from manufacturing industries. Manufacturing job numbers can be found at: ManufacturingEmployment
The real "growth" in jobs has come from sales and service related industries, along with home construction industries. Essentially we've lost 2.8 million manufacturing jobs and are replacing them with service industry jobs.
Today's nominal hourly wage increase of 0.2% is a deceptive marker of worker's buying power. Briefing.com estimates that this months consumer price index will increase 1.0%. This inflation estimate can be seen at:
Briefing.com This means that inflation-adjusted hourly wages will DECLINE 0.8% for September. This would make a 3-month decline in real hourly wages (in manufacturing) of 1.3%, and a 1.8% decline since January of 2005.
This is NOT an economy that is "strong, and getting stronger." This is an economy that is "weak, and getting weaker." We can't invest our way out of this mess. The economy is absolutely dependent on consumer spending. With housing appreciation slowing, consumer ability to use borrowed money to supplement declining wages is dwindling. Consumer spending is already becoming shakey. When the bankruptcy bill goes into effect, and with the housing bubble starting to deflate, our economy is going decline even further.
The economy needs balance between the "means of production" & "means of consumption."