It is a good sign when payrolls are up, unemployment goes down. 214000 more jobs are added, unemployment is 5.8%, lowest since July 2008. Economists estimste to have 235000 jobs added this month. Hourly wages only increases 2%. however, the low wage jobs, which is restaurant, leisure and hospitability sector, retailers.
Dan Alpert said that the end of long-term unemployment benefits may be one of factor why low wage job creation in 2013 happens in 2014. Higher wage jobs do grow, but grows slowly in recent months. 31% of American says we need to find quality one.
So he concludes that things are not going well.
I would say yes, it does not go well, but you can't expect both higher minimum wage and lower unemployment at the same time. when minimum wage is low, unemployment decreases and another way around.
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ReplyDeleteIf wages are growing at 2% I don't see a problem with adding these jobs. If the Fed keeps the target inflation rate around 2% and wage growth is around 2% then nobody is worse off due to inflation, and there are many more jobs.
ReplyDeleteWhat I understand in this article is the author put focus on growth of wages as major problem, not the unemployment rate. Also, we have to put a consideration to nominal interest rate too, because according to Fisher's effect, real interest rate is affected by the changes of nominal interest rate and inflation. The real interest rate will also have an effect on growth of wages.
DeleteWith lower unemployment, the economy will then grow, which will allow more people to receive wages above the minimum wage. This will allow for changes in the interest rate.
ReplyDeleteThis is similar to what we talked about in class. An economic growth or recession is seen as one compared to the period of time that you're looking at. This looks like an economic growth given the fact that a few years ago the unemployment rate was at 10%. However, more than 10 years ago, the unemployment rate was 5.8%, and it was seen as a recession. Jobs are growing and unemployment is lower, which is important and definitely seen as economic growth. Although wages are slowly increasing, it is better than what it was before.
ReplyDeleteIt's good news that new jobs are being created and decreasing the unemployment rate. I understand that wages aren't growing as fast as many would like, but I think the fact that they are growing at all is a good sign. I agree with your comment that it's not always realistic to expect both higher minimum wages and lower unemployment because companies can't employ as many people when they have to pay them all high wages.
ReplyDeleteAlthough it would be quite an accomplishment for the economy to produce a lower unemployment rate and higher wages, I feel that for where our economy has been in the past 5 to 6 years, it is an improvement nonetheless. Its great that overall the unemployment rate is decreasing, and I do think its a lot to expect that there should be an increase in wages as well.
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