The Bureau of Labor Statistics (BLS) of the U.S. Department of Labor recently published its monthly report that is considered a bellwether of economic contraction, expansion or lethargy. The most recent report showed improvements in employment that lowered overall unemployment from 5.8% in November of 2014 to 5.6% in December. This level of unemployment compares favorably with December 2013 of 6.5%.
Analysis of BLS statistics for December of 2014 reveals that the labor force participation rate is 62.7%. This means that 93 million people are eligible but not looking for a job in addition to 8.7 million workers unemployed in the labor force and 6.5 million people not in the workforce who want a job. That’s a total of about 108 million people that vicariously exist on welfare, disability benefits, freeloading with relatives and friends or sitting on a sidewalk with a tin cup in Times Square, NYC or Haight-Ashbury, San Francisco.
Many young people have ‘missed the boat’ by not attending high school, trade school or have shunned opportunities to take advantage of acquiring new skills for the plethora of fresh job opportunities. A young man in Texas spurned college in favor of taking a two-year welding course and is now a welder who made $140,000 last year. Although many jobless high school and college graduates are sitting on the sidelines, now is a good time to pursue positions in healthcare, technology, merchandising, sales, auto mechanics and construction skills. One of the most important reasons for getting a job and launching a career is to start saving for investment in cars and homes and retirement even though those benefits may be in the distant future.
Median income in 2000 was $28,145 while in 2014 it rose to just $28,581. Had wages risen at a 2.2% inflation rate, the median income in 2015 would be about $39,000.Wages have been nearly stagnant for several years and forecasts suggest that no increase in wages will be forthcoming in the first quarter of 2015. However the Hay Group, a Chicago Consulting outfit predicts that worldwide average wages will increase by about 5.4% in 2015.
Employment must be ramped up, especially in private industry because our politicians are not very good trustees of our gifts of taxes, fees, fines and tariffs. Our national debt exceeds $18 trillion and is growing. China and Japan each hold $1.2 trillion of our $6.1 trillion of foreign debt. Our current federal budget deficit amounts to $479 billion.
Through November 2014, our trade imbalance with China was $314 billion and the total deficit of international trade amounted to $461 billion. Important trading partners like Germany, Russia, UK, Israel, Brazil, China and Japan have similar levels of unemployment as here in the US. The difference between these nations and the US is that our Gross Domestic Product (GDP) and individual GDP are much greater. Individual GDP (a measure of productivity) in the US is about $49,000 (per person per annum). China is #2 in overall production but individual output is just $8,500. There a correlation between labor rates and productivity among nations; the higher the output per person, the higher the GDP and incomes for workers.
So, as a nation if our individual and national GDP is superior to all others, why do we continue to develop trade deficits and huge debt? The answer(s) are that our government loves to spend money that we don’t have and because our culture has become one of consumption over saving and thrifty lifestyles. Consumer debt includes home mortgages at more than $8 trillion, student loan debt of $1.3 trillion, auto loans almost $950 billion and credit card debt nearly $900 billion for a total of more than $11 trillion. Average credit card debt is more than $15,000, average mortgage is over $155,000 and student loan average is $32,000+ per household.
The moral of the story: Don’t be overwhelmed or intimidated by the jumbo data presented above; unemployed or under-employed teen-agers and adults of all ages should exercise their self reliance; seek training, escape welfare, get a job, stick with it and be a part of the greatest economic colossus in the world.
– Dick Baynton
