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Saturday, August 06, 2005

There's Good News, and Bad News

So, which do you want first?

The New York Times has a great editorial on the most recent employment report from the U.S. Department of Labor. First, the good news.

According to the latest economic report on job growth, released Friday, the government is reporting that 200,000 new jobs have been created for July and the unemployment rate is now a relatively low 5 percent.

But as The New York Times points out - and this is the bad news - in previous economic recoveries job creation has averaged 250,000 a month, which makes this recovery still anemic for workers. As The Times acknowledges, any time job growth picks up, it's a positive development. And the increase in job creation is welcome for those who have managed to get some of those positions, including groups that are tradtionally the last to benefit from an improved employment picture, such as black and Hispanic youth.

However, there has not been much job growth in the manufacturing sector, once a source of well paying jobs. And wages are barely keeping up with inflation, so though more people are working, they're still not earning good enough salaries to benefit from the economic recovery in the same way that investors and corporations have benefitted from it. While companies are making large profits and investors also are increasing their earnings in this roaring economy, most ordinary employees have yet to see any of those gains trickle down to their paychecks.

And no economy stays hot forever. Just as the economy of the nineties hit a recession, many factors could prove to be a headwind that slows down the latest growth. And unlike in the nineties, when workers experienced real growth, a hot job market, and healthy wage gains, when the economy slows down again - as it must, at some point - workers will have been passed by during the good times.

And that's the real bad news.

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