Help (Very Much) Wanted
Friday's bullish report of 211,000 new jobs in March and a drop in the unemployment rate to 4.7% -- matching its lowest level in five years -- brings further evidence that the great American jobs machine rolls on. Since May of 2003, U.S. businesses have created 5.2 million new jobs. The highly publicized layoffs of 50,000 workers by Ford and General Motors over the next two years is the number of net new jobs the U.S. economy is producing every week in other industries.</br></br>In such high-growth regions as the Southeast and Mountain West, the problem is a shortage of willing and trained workers. Thank goodness for immigrant workers who are filling vital niches in the labor force. Critics continue to complain that President Bush's tax policies have only benefited the super-wealthy, but that would come as news to the five million Americans who were jobless before the 2003 tax cuts, and thus had no income, but now have a weekly paycheck.</br></br>Employers are on enough of a hiring spree that some Wall Street economists of the Keynesian persuasion are fretting over wage-push inflationary pressures. Inflationary pressures do exist due to a Federal Reserve policy of excess dollar liquidity, as evidenced by the $600 price of gold futures. But this is a problem for monetary policy. More people working increases the supply of goods and services, which forces prices down, not up.</br></br>Since at least February of 2004, wages have been rising at a slightly faster pace than core inflation, and the median wage has climbed to more than $600 a week for the first time ever. These pay hikes are a result of another hallmark of this expansion: rapid productivity growth, particularly in manufacturing. So workers are benefiting from a labor market trifecta: robust expansion in jobs, steady gains in productivity and gains in real take-home pay.</br></br>This employment boom once again stands in contrast to the jobs depression in France. Thanks to much more flexible work rules, ease of hiring and firing, lower government benefits for not working, and lower taxes on employers (29.6% of employer costs in the U.S. versus 47.4% in France), more than half of America's 15-to-24-year-olds have jobs, versus only about one-in-four in France.