Mar
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Blog Post #10 – Job Creation – Tiffany Fan
March 24, 2015 | Leave a Comment
Workers exiting the market reminds me of the prior article we read on people relying on government aids. According to Nelson D. Schwartz’s article “Job Growth is Sluggish, Raising Fear of Malaise,” people are not required to work, but still have money to spend, when they have Obamacare and other benefits. Unemployment rates decreased because of people giving up to find jobs and not necessarily people who want jobs are not getting jobs. However, I don’t blame people for giving up since a portion of the United States’ manufacturing are done offshore. With the number of jobs that this could provide to inexperienced workers, less people will give up on finding jobs and the unemployment level will be lower not due to this fact.
As the baby boomers retire, there won’t be enough people in the younger generation to generate enough Social Security tax to pay for the retired baby boomers. But also, there are a portion of the baby boomers that will be forced to work longer due to prices of goods and services rising and not matching up with the 0.2 percent increase in hourly wages. On the other hand, for those who just don’t want to work, women could be taking care of their children. In addition, there are many social benefits available to those unemployed. Possible solutions to make people more encouraged to work is to pull back on these benefits that the government provides. Then, people won’t be faced with the idea of sitting back and enjoying benefits, while others are working and supporting them with paying taxes.
As for Goldman Sach’s study on minimum wage increases and its effect on employment rates, I believe that it would be difficult to conclude that minimum wage increases correlates to higher employment growth. Although California and Nevada had not increased their minimum wage, they still managed to had the highest employment growth at 2.95 percent and 2.84, respectively. This reminds me of what my Macroeconomics class discussed today in class, where inflation causes for wages to increase and for total costs of producing the product to increase, which causes for profits to decrease. However, during a recession, there are low wages, a low cost of producing products, and higher profits. So I question whether wage increases lead to employment growth or whether employment growth lead to an increase in wages.
Ben Wolcott’s article “2014 Job Creation Faster in States that Raised the Minimum Wage” states “The average change in employment for the 13 states that increased their minimum wage is +0.99% while the remaining states have an average employment change of +0.68% (Wolcott).” In this case, it seems that minimum wage increases benefits the economy by a measly difference of three tenths. I think it would be more helpful to group the states by ages as well to see a bigger difference in terms of minimum wage verse employment growth since it was previously discussed that a great portion of minimum wage earners are of young adults who are a part of middle income households.
The article entitled “The United States Conference of Mayors” reconfirms what we have discussed in previous classes, where the the rich are obtaining more of the wealth. However, the article provides a more historical perspective. The income that is earned by the highest quartile has increased from 43.6 percent in 1975 to 51.0 percent in 2012 and it suggests that it is only going to continue increasing the income gap in the future. I found it interesting that despite mean income increasing at a faster rate than median income, when adjusted to inflation rates, real income is actually a decrease of mean income of 3.0 percent and a decrease of median income of 5.5 percent. Could this be the consequence of sending jobs overseas and leaving behind in the United States only jobs that are low-paying such as service and retail jobs? As mentioned by Schwartz, retail jobs has decreased 8,400 jobs, but increased a whole 85,000 previously.
