CommentsEASTSIDER-You’ve heard the headlines time and again: “The Economy Is Doing Great, Unemployment is at Its Lowest Ever, and Wages are Rising.”
Last year I wrote about this in CityWatch with the caveat, “Why Do Most of Us Feel We’ve Been Screwed?”
Today, nothing but the hype has changed. To get a little into the weeds, the big number for the economy is called GDP (or Gross Domestic Product) and is the math folks measure the change from quarter to quarter. What they don’t tell you is that the GDP is simply a statistical abstract, with more holes in it than cheese. The Feds define the number as,
The value of the goods and services produced in the United States is the gross domestic product. The percentage that GDP grew (or shrank) from one period to another is an important way for Americans to gauge how their economy is doing. The United States' GDP is also watched around the world as an economic barometer.
GDP is the signature piece of BEA's National Income and Product Accounts, which measure the value and makeup of the nation's output, the types of income generated, and how that income is used.
BEA also estimates GDP for states, metropolitan areas, and most U.S. territories. Work is underway to produce GDP statistics for each county. We publish GDP by industry, as well.
For those who care, here’s a simplified poster explaining all.
Great for Wall Street and tv and social media, but ultimately just an abstract number that gets continuously revised. In other words, little to do with Angelenos like you and me.
In terms of winners and losers in the real world, the blog Common Dreams gives us a very different picture.
“And yet most of the gains from our growing economy are still going to those who least need a boost. Stock market rallies, for example, further concentrate wealth among the very richest Americans. The top 1% of Americans own more than half of stocks and mutual funds. The bottom 90% own just 7%.”
Unemployment is All-Time Low?
The situation is similar for “unemployment,” because the books are so cooked with misleading information that it makes my head spin. As I wrote before, here is the actual government definition of employment from the Bureau of Labor Statistics:
“Employed persons (Current Population Survey)
Persons 16 years and over in the civilian noninstitutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees; worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family; and (b) all those who were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. Each employed person is counted only once, even if he or she holds more than one job. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable, and other organizations.”
Does one hour of paid work makes you employed? Or “were not working” but were absent from jobs because of bad weather or childcare. Right. What used to mean that you worked over 32 hours a week for an employer now means anything that the data gatherers say it means. In other words, meaningless.
So what’s really happening in the working world of Angelenos? Let’s see. Silicon Valley is getting rid of regular employees in favor of contract workers. CNBC nailed it in “Silicon Valley’s dirty secret: Using a shadow workforce of contract employees to drive profits.” A good and very depressing read proving greed trumps ethical behavior in our high tech world.
Then there’s the “gig economy,” of particular interest to Angelenos. After a recent State
Supreme Court Case made it tougher to deny gig workers full employment rights, our very own California Legislature is deciding whether or not to get around the decision. You can read Beth Cone Kramer’s CityWatch article here.
Finally, when you look ahead, a Brookings Institute piece [[[ https://www.brookings.edu/blog/the-avenue/2018/12/13/what-gms-layoffs-reveal-about-the-digitalization-of-the-auto-industry/ ]]] gives us a look ahead as huge structural changes in who will even be able to get jobs.
“While all of those perspectives are relevant, the most revealing aspect of GM’s announcement may well be what the layoffs say about broader technology trends. GM’s layoffs are not just incremental but existential, in that sense: They are about accelerating the staffing changes mandated by the company’s aggressive transition from analog to digital products and from gasoline to electric power. As such, the new layoffs (and associated future hirings) are likely an augury of much more disruption coming — in the auto sector, for sure, but also in firms all across the economy
Wages are Rising
The New York Times had an interesting article recently about why “Wages Are Finally Rising, 10 Years After the Recession.”
It’s well worth the read, and their conclusion is not that heartening:
The recent uptick in wage growth suggests a simpler explanation: Perhaps the job market wasn’t as good as the unemployment rate made it look.
The Takeaway
A very cool nonprofit called, The Center for Public Integrity, recently opined, “Trump’s Tax Cuts: The Rich Get Richer.”
There are some very good stories in this section of the blog, including problems with the tax cuts, how the billionaires paid off the Republicans to get the goodies, and one I like a lot, You Paid Taxes. These corporations didn’t. Sorta says it all.
At the same time, here in Los Angeles, according to the (very good) blog RentCafe, here’s what the “medial income” will get you in Los Angeles. For the analysis, they look at how many square feet that 30% of your income would get. In LA it comes to 333 square feet! You can see the full analysis nationally here.
And while Rome burns, here’s what the financial services industry is doing. As reported by WallStreetOnParade, read about how “Wall Street’s Six Biggest Bailed-Out Banks: Their RAP Sheets & Their Ongoing Crime Spree.”
A good if depressing read, and it includes $8.2 trillion in bailouts, 351 lawsuits, and about $200 billion in fines and settlements.
So here we are, where, as a practical matter, Angelenos can’t get jobs that cover the cost of a one-bedroom apartment with enough cushion to pay for the basics, like healthcare and student loans, much less transportation -- even as corporate America steals us blind. And that’s assuming that you can actually get a job.
If you hear all this horsepuckey about the economy and jobs, don’t feel like there’s something wrong with you. This economy is so rigged that you’re better off buying a PowerBall lottery ticket.
(Tony Butka is an Eastside community activist, who has served on a neighborhood council, has a background in government and is a contributor to CityWatch.) Edited for CityWatch by Linda Abrams.
