Thursday, April 14, 2011

The Changing Face of American Employment

As today's weak jobless claims number is dismissed as some sort of "end of the quarter" anomaly, I thought it might make sense to revisit one of the theme's that I've been focused on for the past 5 years. All jobs are not created equal and in the US our economists and stock market gurus like to treat them as equals. We've all seen the former Mortgage banker working at the Sport's Authority or the former autoworker stocking shelves at Walmart, but to really visualize the impact this is having on the US consider this chart:



The top bar are "HIGH WAGE INDUSTRIES" and it shows that the bulk of job losses have occurred in this category. The bottom bar is "LOW WAGE INDUSTRIES" and it shows that the bulk of the job growth has occurred in these industries.

Swapping high salaries for low salaries is a recipe for success for the small percent of the population with equity in these firms or stock holdings, but for the average American this will ultimately lead to a lower quality of life. **************************************************************

Japan remains a very fluid situation but I'll say that I think the economic forecasters are dramatically underestimating the impact that the quake and the Fukushima event are having on the global supply chain. The move to just in time inventory is a great cost saver when everything is going according to plan, but the crimps in the global supply chain are just starting to emerge. ************************************************************

This story really didn't get as much traction as I thought it would. Please try not to drink any beverages when you go forward to read this article or you may fry your laptop.

"A budget compromise that was touted as cutting $38.5 billion from the 2011 federal budget would actually only cut $352 million in expected spending during this fiscal year, according to a Congressional Budget Office analysis--news that is stirring conservative anger in the hours before a key vote."

I hate being right on this issue, but I think me exact words to my mother last week were "both sides will fight back and forth until they reach a last minute compromise and then nothing will change".

BTW: While the two parties were bickering back and forth over $350 million in cuts, the nation's total debt increased by $54 billion over an 8 day period. ***********************************************************

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