Housing seems to have bottomed out, and corporate profits are exceeding analysts' expectations. So why am I — and millions of others like me — still unemployed? The national unemployment rate is pushing 10 percent, and North Carolina's rate is holding steady around 11 percent, even though at least one economist has said the state's rate could top out above 13 percent.
It's the nature of a recession that sales and profits recover before rehiring ever begins. Owners and managers want to make sure that revenues will hold up before they add new expenses. Speaking of which, a new minimum wage law went into effect today, and that extra expense could stagger the feeble economic recovery. The wage goes up to $7.25 today, and struggling businesses will have to absorb that expense. Keep an eye on the "dollar menu" at your favorite fast-food joint. The restaurants were making little or nothing on those items anyway, but a higher minimum wage will likely result in fewer cheap items or a higher price. The additional income for low-wage earners is not likely to have a significant macro-economic impact. The $1,400 or so a full-time minimum wage worker will gain is likely to go toward basic necessities, not economy-boosting major purchases. Still, it will be a welcome change for struggling workers.
Meanwhile, North Carolina legislators seem intent on raising taxes in the midst of a recession. Although Gov. Bev. Perdue squelched Democratic legislators' new-taxes-for-everyone formula, she still favors higher taxes. More taxes will drag down any economic recovery.
My former profession has been waiting for the housing market to bottom out. Newspaper executives want to get real estate ads back on their printed pages and recover some of the revenues they've lost since the housing bubble burst. But that might not happen. This blog post by respected blogger Alan D. Mutter (Newsosaur), predicts that Realtors will forgo print advertising in the future; the loss of real estate ads will be permanent, no matter what the housing market might do, he says. Car ads, another cash cow for newspapers in their heyday, could go the same way. It's easy to hunt for cars on the Internet, both at dedicated ad sites like Cars.com and at dealers' sites. If automotive and real estate ads don't come back, any economic recovery in the newspaper business will be slow and minuscule.
Not that I was job-hunting in the newspaper industry anyway.
Nine big, fat raises. That’s what congressional leaders have given themselves while (Mostly the Republicans) blocked attempts to raise the minimum wage. But the really scary thing, are those who can't find a job saying raising the minimum wage is a bad thing. Should we feel sorry for them? In a way yes. We should.
ReplyDeleteAt the federal minimum wage rate of $5.15, a minimum wage worker had to work 11.2 hours to pay for one tank of gas.
Even greedy Wal-Mart supports a minimum wage increase so its low-wage customers can afford to buy more stuff. Although even with the wage increase, I doubt someone who criticizes it will apply there.
The ‘free market’ (and their cheerleaders) will always obligate corporate managers to race to the bottom on treatment of humans.
Better still. Ask the 'feeble' grandma taking your order at a local fast-food place if she’s doing it for fun.
as a small business owner I will be cutting back on my employees hours. This forced expense increase with no increase in revenues gives me no choice other than to cut hours. If the reduction in hours is not sufficient I will be adding to the NC unemployment rate by actually cutting my staff. When I do have to lay off because of the increase in forced labor expenses, I will let my employees know the reason why was b/c of the forced expenses I incurred because of government meddling and regulation. The bumper sticker is true: obama-nomics=penalize success=reward failure.
ReplyDeleteAnonymous 1 must be figuring on a minimum wage worker filling up a 25-gallon tank (at current gas prices of around $2.30 a gallon). That's probably way more vehicle than a low-wage worker needs. Filling a 10-gallon tank on a compact car might be more realistic, but even that would require 4.5 hours of minimum-wage work. And these calculations don't account for taxes subtracted from gross pay. Even with the smaller car, 4.5 hours is a lot of work for one tank of gas! When I was a teenager, i could buy three or four gallons of gas on an hour's wages. Even at the higher wage effective today, a teen wage earner could buy less than three gallons of gas for an hour's gross pay. Wages have obviously fallen behind prices in the past 40 years.
ReplyDeletesomething smells; "CON$ulting firm"
ReplyDeleteMost Americans, by a large margin, want the minimum wage increased. Of course, there are exceptions. Like the "economists", who think an increase is bad, as they and their people milk the taxpayer dole.
ReplyDeleteThe private sector would be paying $3.00 an hour and no healthcare if they could get away with it.
Btw, many, if not most minimum wage workers didn't earn enough to own a car, a home, a computer or pricey software.
"If automotive and real estate ads don't come back, any economic recovery in the newspaper business will be slow and minuscule."
ReplyDeleteFour years in college, wasted.
I gotta say, I think the minimum wage is a very, very small part of our economic woes. In fact, it might be one of the few things that keeps money flowing, even at a trickle, for the economy's goods and services.
ReplyDeleteThe wage increase of 70 cents per hour translates to an additional $28 per week for one minimum-wage worker who's working 40 hours a week (before taxes, of course). A small business that can't afford to pay the $28 is probably dangerously close to failing anyway, and it certainly can't be blamed on the workers, who likely are working mighty hard (maybe even more than their share) for the compensation they get.
A large business, on the other hand, probably can pay the $28 per worker with very little impact on profitability, thanks to economies of scale.
Just my opinion :)
Most minimum wage workers do not do what is necessary to further their abilities and are use to handouts and thinking somebody owes them. If they wanted to do better most could. But it takes hard work and a sense of individuality that the USA education system fails to teach today. People grow up thinking big bro is going to answer all their needs.
ReplyDeleteJust look at the cra of 1977 mentality that put the usa in the financial mess we are in. Everybody deserves a home. No they do not. People need to learn responsibility first.
Downfall of society:
*paying mamas to have babies
*fast food restaurants
*soap operas
*white sugar/white flour/salt=white death
*the cra of 1977
Anonymous #3 is making gross assumptions about the private sector. As a small business owner, we payed our employees who had no experience outside a high school education $10 an hour plus retirement and health care. (The health was an added bonus after the business had been open for a few years.) Most small business owners recognize that they need to take care of their employees in order to be successful.
ReplyDelete