Tuesday, February 14, 2017

The pay rates should be increasing so healthy economic growth cycles RETURN to the USA.

Chairwoman Yellen stated the job market is tightening, but, was dismayed with the disparity in that reality in minority populations in the USA.

Two things should be happening with a tightening labor market, the pay rates of employees should be increasing to maintain a company's work force. The other incentive to stay with a company is to offer better benefits or vacation time, health insurance or pension. There needs to be some incentive for an employer to provide for a stable work force. That is very good news for the Working Poor to move into the Middle Class in the USA.

It should also be good news for the Middle Class, too. The pay rates will increase to keep in step with higher rates for beginning employees. When the pay rates go up at the bottom of the pay scale, those earning above the lowest wage should see increases as well.

But, more than that is the reality full employment is still out of reach of the minorities in the USA regardless of the unemployment rate.

There should be a government program offered as an incentive to employers to hire minorities. There should also be training programs through unemployment and social services agencies to increase the skill base in areas seeking more employees. The point is the minority issue has been identified and there needs to be a 'no tolerance' policy that provides incentives to hire minorities. 

There should also be tax incentives that penalize companies that do not hire minorities. Every company in the USA should have a minority employment standard to meet, otherwise, pay a tax as a penalty. Religious organizations that protect racism and bigotry should be taxed as a penalty as well.

The really good news is the increase in disposable income. As employers have to compete for labor and the wages increase the disposable income to those employees will stimulate economic growth. 

February 14, 2017
By Brendan Murry

Current Economic Situation and Outlook (click here)

Since my appearance before this Committee last June, the economy has continued to make progress toward our dual-mandate objectives of maximum employment and price stability. In the labor market, job gains averaged 190,000 per month over the second half of 2016, and the number of jobs rose an additional 227,000 in January. Those gains bring the total increase in employment since its trough in early 2010 to nearly 16 million. In addition, the unemployment rate, which stood at 4.8 percent in January, is more than 5 percentage points lower than where it stood at its peak in 2010 and is now in line with the median of the Federal Open Market Committee (FOMC) participants’ estimates of its longer-run normal level. A broader measure of labor underutilization, which includes those marginally attached to the labor force and people who are working part time but would like a full-time job, has also continued to improve over the past year. In addition, the pace of wage growth has picked up relative to its pace of a few years ago, a further indication that the job market is tightening. Importantly, improvements in the labor market in recent years have been widespread, with large declines in the unemployment rates for all major demographic groups, including African Americans and Hispanics. Even so, it is discouraging that jobless rates for those minorities remain significantly higher than the rate for the nation overall....