With the August coming to a close,
economists finally get to analyze the job market. In August the private sector
was able to add 204,000 jobs to the economy. Making it the fifth month in a row
that the private sector has added more jobs. Over the past five months the
private sector has added one million more workers to the workforce. It’s also
not just in one industry either. Jobs have been created across a lot on
industries, large and small. It also should bring down unemployment to 6.1%.
Not a big drop, but it does mean a lot more people have jobs now.
This data shows the economy is starting to
recover and output of the economy should increase with this surge in labor over
the past five months. Federal reserve chair Janet Yellen is a little worried
because there is a lack of wage growth with the job increase. This could cause
people to leave their jobs in the future causing unemployment to rise back up
again. Overall it is good to see job growth and hopefully it continues into
next month.
http://money.cnn.com/2014/09/04/news/economy/adp-jobs-204000-august/index.html?iid=SF_E_River
Though I do agree that it is good to see so many people are getting jobs. More jobs means an increase in the productivity of the economy, as well as more income to households to be able to consume more of the goods and services being provided. This increases revenue for businesses, allowing them to keep producing and growing. And thus the economic circle of life shall continue. But I do share the same concern as Ms. Yellen, if wages do not increase, labor could possible decrease because people may feel they are not being paid what they believe they have earned. I think the reason the wages aren't rising is because there is such an enormous supply of labor available for employers to chose from, that if a worker decides to quit because they feel the wage is too low, employers know there will be someone knocking down the door to take their place. It would be nice to see wages rise gradually, but I do understand why they are lacking growth right now.
ReplyDeleteI agree with Rachael, the surplus of workers can keep the wage rate low. If people quit because of the wage rate they can easily be replaced. There's so many people looking for work. However, it is nice to see the unemployment rate going down and the economy doing better. Hopefully we continue to move in a positive direction.
ReplyDeleteIt's always good to see the unemployment rate decreasing, as it means that we're moving in a positive direction. I do, however, understand Janet Yellen's concern with the lack of wage growth. It could become an issue if employees begin feeling as though they are underpaid and begin leaving their jobs. Hopefully we see wage growth in the coming months and continue to see a decreasing unemployment rate.
ReplyDeleteI agree with Janet Yellen, with a surplus of workers, businesses can make their wages just about as low as they want, because they know if one of their employees quit, they got 10 new guys waiting at their front door who will work for that low wage. I enjoy seeing unemployment improving, but people have to look past that stat, and look at what this really means for our economy so we can be prepared for when things don't work out.
ReplyDeleteSeeing the unemployment rate decrease is always a positive thing due to the fact that people who were struggling to pay their bills because they didn’t have a job are now employed. On the other hand, I also agree with Janet Yellen’s concern. this could be a temporary victory due to the lack of wage rate growth. workers may feel they are being underpaid and leave their job casing an increase in the unemployment rate once again.
ReplyDeleteAs someone who may be entering the job market soon, more jobs being available is a great thing, and while they may be lower paying than they "should" be (in an expanding market with lower unemployment), some money is better than no money. So I would have to agree with those who are saying that there are people lined up to take these jobs.
ReplyDelete