October was a great month for the unemployment rate. According
to government data, 214,000 jobs were added last month and unemployment moved
down to 5.8%. This is great news for those who are actively seeking employment
and are counted in the rankings. Those in the lowest wage rungs haven’t seen
much improvement in wages.
As unemployment numbers decline it naturally soaks up the
slack in the labor market. Higher skilled workers usually get the cream puff
jobs while lower skilled workers will still be picking up crumbs. Typically
higher skilled workers find employment faster because they are needed in penetrating
growth sectors of society that rely heavily on education and specialized
skills.
Lower wage service jobs and part-timers will be stuck in
lower wages until slack in the market is tighten to create demand-not so easy
in a global world. Some lower wage workers may find new training opportunities
that help them move into higher paying employment but others may simply stay in
lower wage positions unless they actively seek to improve their own skills.
Eventually wages will rise on all levels of society but
inflation may eat up a higher percentage of its purchasing power. For example,
people are paid more today than they were 30 years ago but their individual
purchasing power has declined. It simply takes more money to live a middle
class lifestyle in American today than it did in the past.
What mitigates this relationship is the cost of doing
business and the productivity of the American worker. When infrastructure is
strong, positive growth policies are enacted, cost of information transference is
low, productivity rises, education is reasonably priced then the overall costs
of business will be lower. Improving on productivity and lowering the systematic
costs in society helps create new employment opportunities.
