Happy Days Are Here Again
by digby
It’s all good. Susie found reason to celebrate!
Great news! Doesn’t this make you feel better?
The 6.8 million Americans out of work for 27 weeks or longer — a record 46 percent of all the unemployed — are providing U.S. companies with an eager, skilled and cheap labor pool. This is allowing businesses to retool their workforces, boosting efficiency and profits following the deepest recession since the 1930s, and contributing to a 61 percent rise in the Standard & Poor’s 500 Index since March 2009. “Companies are getting higher-productivity employees for the same or lower wage rate they were paying a marginal employee,” said James Paulsen, who helps oversee about $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. “Not only are employees higher skilled, you have a better skill match. You have a more productive and more adaptive labor force.” Falling wage pressures will help keep inflation low, contributing to lower Treasury-bond yields, according to Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. He forecasts 10-year Treasuries will yield about 3.1 percent in the third quarter, compared with 4 percent in April.
High skilled workers are taking low wage jobs, just like Sharron Angle said they should. (Not enough of them, of course. All those scofflaws still on UI need to start picking cotton.) And it’s working out just wonderfully for business, which means it’s god’s work.
But let’s not get carries away and think that because workers are getting screwed and inflation and interest rates are low there is no reason why we shouldn’t panic about future deficits and cut the safety net immediately. Why that should be true I don’t know, but a very smart Phd at the Fed told me not to worry my pretty little head about it cuz I’m too stoopid, so I won’t.
Right now, we should all have a great big party to celebrate the fact that we are becoming competitive with other countries(otherwise known as falling wages and living standards.) Huzzah. Happy days are here again.
Gosh I sure do hope those Chinese workers are getting big raises because somebody’s going to have to start buying all that crap from Walmart.
PS: They do sort of belatedly admit that there might be a teensy bit of a problem if you have a large and growing permanent underclass. It’s so unpleasant walking over the beggers.
But hey, no need to rain on the parade with all that downer talk. It’s very good news is that the middle class is dwindling and income inequality is growing.
Is this a great country or what?
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