Cold Water

The competing reports on the state of American workers just perplex me: herds of Eeyores and Pollyannas juggling the stats to bolster their prediction of doom or grace (or else those bizarre tropes: "hard landing" and "soft landing"). I identify with the Eeyores, mostly because I'm a foe of the Invisible Hand, which is now so given to palming cards and stacking chips (when it isn't busy destroying the sandcastles of the housing market). My new favorite voice of reason is Barry Ritholtz at the Big Picture, whose analysis of the new aggregate data gives this:

- The mix of job growth remains skewed toward low-paying industries;

- Weakness is most evident in the retail component -- which has stopped growing;

- Almost one-half of the rise occurred in the health and social assistance category -- generally low-paying jobs;

- Other sectors have not picked up the slack
(Joshua Shapiro, MFR);

- The pace of job creation has slowed dramatically.

2004: 175,000/mo
2005: 165,000/mo
2006: 140,000/mo
Past five months: 119,000/mo
(Steven A. Wood, Insight Economics)

- Manufacturing has lost more than three million jobs since 2000; Conditions remain poor;

- Prior recoveries at this point had created two million manufacturing jobs;

- Unemployment fell to 4.7 from 4.8% due to a large number of adults leaving the labor force (NiLF);

- The two-tiered labor market continues: The top quartile has it good; but for everyone else, the future is worrisome;

- For many workers, real incomes lag inflation;
(Peter Morici, Univ. of Maryland)

- Total labor input is growing very sluggishly in Q3, foreshadowing the continued softness in economic growth.
(Steven A. Wood, Insight Economics)

- The average work week is dropping (by 0.1 hours to 33.8 hours), even as productivity slows.

In other words, the perverse incentives of the gamblers in economic power now have the effect of pressing workers' faces closer to the dirt. Hell, even even Gene Sperling seems to concur with Ben Bernanke (!) about wages: perhaps the new megaprofits can be shaved a bit by passing on productivity gains to the workers, whose wages should (theoretically) increase with productivity.

To me, though, the most obvious sign of economic trouble is that socially responsible investors are now reconsidering their priorities, allowing the inclusion of "sin" stocks (booze and gambling) in their portfolios. Economic growth without sin, is it even possible?