Top of the News: The lesson out of this week’s earnings is that few companies are immune to the financial phase of the Great Disruption.
The longer the great recession continues, the wider the damage. For the Seattle region, that means continued pressure to cut and greater uncertainty in the labor market. We’re still likely to recovery sooner than most regions — and it may be led by smaller, nimble companies instead of the giants — but national recovery is not in sight. When it comes, it will be weak.
The Back Story: The national minimum wage goes up today from $6.55 to $7.25 an hour. Washington state’s minimum is already $8.55 an hour. You hear on the electronic media that “economists say” it will cost jobs as strapped small businesses are forced to lay off workers.
Actually, the research is mixed on whether that’s true. What is accurate is that the minimum wage hasn’t kept pace with inflation. An increase does translate into increased consumer spending, even though the minimum wage has much less purchasing power than 40 years ago. And it takes nearly $14 an hour to provide a living wage for a family. Also, the minimum wage affects 4.5 million workers, less than 4 percent of the workforce.
The current economy is terrible for most workers, with the length of the average work week at its lowest since 1964. Wages have stagnated over the past eight years, partly because of skyrocketing healthcare costs and 1 million people a year are forced into bankruptcy because of a health emergency.
Today’s Econ Haiku:
Tho’ business is flat
Omaha’s Oracle says
Smart money’s in stocks
Check in at noon for the weekly silliness: Vote for your favorite Econ Haiku or write your own.