Editor: The Jobs Report released Friday by the U.S. Department of Labor shows a net gain in employer payrolls of 248,000 jobs. This combined with revised numbers for prior reports indicates a net gain of over 900,000 jobs over the last 3 months. Sure looks good doesn't it? Why then, is this growth not reflected in the unemployment rate, which remained constant at 5.6%? 339,000 new unemployment claims were made last month, suggesting that close to 100,000 more people lost their job than those who gained one.
According to a Reuters report in May, the number of jobs being outsourced is increasing at a rate that far outpaces any growth actually realized here at home. The report estimates that 588,000 business service and software jobs will move offshore during 2004, up from 315,000 in 2003. Furthermore, 830,000 of these jobs are estimated to be lost to outsourcing during 2005 – up 40% over this year.
The Labor Report also indicates the average hourly earnings rose by 5 cents last month, but the federal minimum wage remained at $5.15 per hour, where it has stood since September 1, 1997. To date, this is the second longest period of time that federal minimum wage has not been increased since its inception in 1938. The longest was from January 1981 through April 1990 – during the last sustained period of Republican leadership – when the buzzword was "trickle-down."
Individual and public debt levels continue to rise. Consumer credit card debt continues to increase, state governments are borrowing to make ends meet, and the federal deficit is at an all-time high at over a half trillion dollars this year alone.
OPEC has just announced a production increase of 2.5 million barrels per day through this summer, but analysts suggest that oil and gasoline prices will not see much relief.
So, whether or not the economy is improving depends on who and where you are. If you are a member of an oil cartel, a financial corporate executive, or a software developer in India, things are looking up. Otherwise, I'd temper my exuberance over the state of the economy.
Daniel Wells, Tracy