More Jobs, More Poverty

Two items snatched from today's news:

The number of people who filed unemployment claims last week dropped to the lowest level since May 2008, according to the Bureau of Labor Statistics.

At the same time, the U.S. Census said 48 percent of all Americans either live below the poverty line or fall into the low income category. That is 148 million people living in the wealthiest nation on earth.

Seems like we have a ways to go before we can accurately use the words economy and recovery in the same context. 

Good News/Bad News on Jobs

U.S. unemployment declined to 8.6 percent last month, the lowest level in more than two years, according to the Labor Department. That's worth a glass of champagne for those of us (everyone) exhausted by negative economic news.

However, some economists warn we shouldn't get carried away with ourselves.

For instance, Mark Zandi, chief economist for Moody's Analytics, told Bloomberg that a major factor in the decline was a drop in workforce participation to 64 percent. Calculating in that factor, unemployment is really at about 11 percent, he said. In addition, underemployment is about 15.6 percent.

But, while the improvement seems soft, the trend is up and the experts say that reduces the chance of another plunge into recession.

That alone might be worth a second glass of champagne.

What Job Growth?

Before everyone gets too giddy over the positive (and welcome) job growth figures, let's put them in perspective.

If jobs continue to increase at the current pace, sometime in 2014 employment will return to 2008 levels.

That would be good only if the population had stopped growing in 2008 and the number of people in the labor pool remained the same.

Therefore, moderate job growth is a positive, but it's going to take an economic tsunami to create enough jobs for real, rather than nominal, growth.

Why Unemployment Will Remain High

Worker productivity is at an all-time high. Off the charts.

So, as our creaky, cranky economy slogs forward, companies will stretch overtime before hiring more employees. Given their increasing experience with "contingents," companies will consider contractors, consultants and temps before hiring more employees with all the burden.

How do we make a living? We stop thinking about "job" and start thinking about "work" to seize the second option.

Teaching Bad Bankers A Lesson -- Sort Of

"As the White House and Congress consider a host of new regulations for Wall Street, a commission studying the financial crisis harshly criticized the heads of the nation's biggest banks Wednesday for their role in the near collapse of the economy in 2008." (MarketWatch)

"Despite leading their companies into the worst financial crisis since the Great Depression, 92 percent of the senior officers and directors of the 17 top recipients of federal financial bailout funds are still in their posts."  (American Progress via The Week)

Street Economics - 1Q 2008

The brilliance of Street Economics is such that it doesn't have to wait until the end of the month to sum up the the U.S. economy. Learn from the facts:

Internationally, ticket vendors at the Taj Mahal refuse U.S. dollars and Bolivian banks urge customers to save in euros.

Domestically, the price of a drink at La Bodeguita del Medio in Palo Alto, Calif. is up 25 cents and a gallon of gas in the tank of its customers' Bentleys costs $4.11.

Really, is there anything else than can or should be said?

Bad Times Ahead In 2008

Based on my Sreet Economics Index, 2008 is looking as dark as Dick Cheney's soul. The evidence -- all of it true:

• My house cleaner came into an inheritance but still shows up every week.
• The Popov Vodka bottles at A-1 Liquor are dusty.
• Panhandlers are asking for quarters again.
• My eHow article "How to Prepare For Being Fired" got 82 hits in three days.
• I wrote it for $15.

Man On The Street Economics

The gurus say economic growth will slow in 2007 but not so dramatically that a recession will bite. I am more optimistic.

Of couse, my way of measuring economic health is less sophisticated than the methods used by the pros.

First, I navigate to craigslist and check out postings for jobs highly sensitive to economic ups and downs, such as those in PR and advertising. The number of offered positions is growing, so companies are confident.

Then, I walk down the main drag near my home in Palo Alto to see if fast-food restaurants and carwashes sport "now hiring" signs. The banners are flying, so folks with only basic job skills can find jobs paying more than $10 an hour.

About a mile later, I drop into my favorite hangout, La Bodeguita del Medio. Difficulty finding a spot at the bar before 6 p.m. on Friday means people have plenty of discretionary income and are willing to spend it. There was a big crowd last night.

A couple of minutes online, a brisk walk and a comforting cocktail. It usually works.