A bumper year for U.S. jobs," exclaimed the headline in my local daily paper. Wow, good news, right? The boom must be back!
Nope. Read further and you learn that job creation is not even keeping pace with the increasing number of working age Americans. And way down in the story you find this sentence: "The increase in jobs was not translating into increases in wages." That's good news for CEOs, but bad news for the average American.
Yes, say corporate economists, but it's bound to get better soon, just like we've been promising. Trust us. No again. I was in Southern California recently, and a local paper offered its 2005 jobs forecast for Orange County, one of the most prosperous places in America. There will be new jobs, the story said, but don't expect to live high on the hog. The 10 occupations expecting the most job growth were: retail sales, security guards, cashiers, food service, janitorial, wait staff, nurses, telephone customer service, laborers and landscapers. Only one of these pays anything approaching a middle-class wage, and most pay what amounts to poverty in Orange County.
Meanwhile, the one boom that really is underway is a job crusher: Corporate mergers. For example, Kmart is taking over Sears, Sprint is swallowing Nextel and Oracle is absorbing PeopleSoft. Looking at the merger surge expected this year, one analyst gushed, "Corporate America has finally gotten a bit of swagger back in its step."
Dandy. But we need economic growth, not economic consolidation. Corporate profits are way up -- by 70 percent -- and cash flow is at a record rate of $1.3 trillion a year. But instead of increasing wages and opening new factories, swaggering CEOs are diverting America's investment capital into buying out their competitors, shrinking both jobs and consumer choice.
Publication date: 1/20/04