The Standard & Poor’s 500 Index closed yesterday at a record high of more than 2,000. Yet many people feel that the economy is weak. There are numerous reasons for this, but the one I want to focus on has to do with employment and wages.

The economy feels weak because, depending on your education, employment and skill set, it very well may be weak to you. Unlike the typical post-credit-crisis recovery, this one features disappointing gross domestic product gains, subpar job creation, stagnant wages and weak retail sales. However, those represent the average. Different employment sectors have done considerably better or worse, depending on demand and scarcity of workers in that field.

The recovery is here, it just isn’t evenly distributed.

Continues here



Category: Bailouts, Consumer Spending, Cycles, Economy, Employment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “Our Bifurcated Recovery”

  1. CD4P says:

    “The recovery is here, it just isn’t evenly distributed.”

    Say no more than $2 billion for the Clippers!!!

  2. VennData says:

    There are 4.7 million US job openings

    • rd says:

      Many of those employers are waiting for the perfect worker to come along. Preferably, the worker has been fully trained by a competitor.

      Oh, and the 25% of the population that have criminal records need not apply. The remaining 75% also need to pass the drug test, including the marijuana screen.

    • kaleberg says:

      The 4.7 million job openings are mainly bogus. Posting a job opening is nearly cost free. Screening resumes is a perl script. Why not keep a bunch of “job openings” floating? It’s not like you’re paying by the line. Besides, it makes HR feel important, even if the firm isn’t hiring.

  3. wisegrowth says:

    Michael Pettis wrote about the bifurcation in monetary policy. This is where money supply grows among producers but not among labor/households. (December 2013) Here is some of what he wrote…

    “As long as the rest of the world can accommodate the consequent excess of production over consumption, the bifurcation in monetary policy will not seem to be a problem, but once the world cannot accommodate it, the bifurcation of monetary expansion will create deflationary pressures.“

    “Deflation or disinflation partially or wholly resolves the bifurcation by forcing real interest rates towards their “correct” level (because real deposit and lending rates rise in a deflationary environment if there is no change in the nominal interest rate).“

    He is describing the Fisher Effect where consistently low nominal interest rates lead to low inflation and low wage growth.

  4. DeltaV says:

    Adam Smith defined capitalism as a system characterized by high wages and low profits. While the corporate profit margins have been increasing over the last 25-30 years, the effective corporate tax rates have been going down. This is not capitalism. This is merely crony-capitalism.

    The current tax regime encourages executives to minimize their investment in the company, whether in the form of hiring or capital expenditures. In defense of conservative and capitalist principles, the US must increase the corporate tax rates. In fact, for non-US corporations the tax rate on US earnings should be doubled. This will incentivize capital expenditures (investment in the company itself) and hiring.

  5. kaleberg says:

    If you go out on your porch and check the temperature and you have 300 thermometers, 1 reading 98F and the rest at 32F, is it a hot day or a cold day? We haven’t had economic growth since Ronald Reagan was elected.