The Glass Ceiling Is Cracking

Click on the link above to access an audio clip from NPR on the great strides young women are making in closing the gap and surpassing male peers in salary.

How Much Would Your Social Conscience Allow You To Pay?

In a previous post I offered an article describing the race to the bottom for wages in the garment industry. This article describes an unusual factory in the Dominican Republic that is bucking the trend and paying a living wage to its workers while freely allowing for unions. The factory makes t-shirts and sweatshirts for over 400 colleges and universities in the U.S., but because of higher labor costs has to charge a premium price for their garments. Many universities have grown uncomfortable with the knowledge that their items are produced in what are perceived to be "sweatshop" conditions. Thus, they applaud the efforts occurring in the Dominican. Many consumers might consider paying extra to support these fair labor practices, but how often does one know the origin of the product? Without effective marketing, many consumers may pass over the unfamiliar brand for the more recognizable logos. Thus, some see this as a noble experiment that will eventually fail. Meanwhile, many garment workers are realizing lifestyles they never thought imaginable.

Race To The Bottom

It has often been referred to as "the race to the bottom", the constant pursuit of lower labor costs throughout the world especially in the textile industry. The southeastern U.S. was at one point the epicenter of cheap clothing and towels. Following WWII, many of those jobs migrated to the lower cost labor pool in a recovering Japan. In more recent years, the opportunities have been more profitable in China. Now pressure in Chinese labor markets has created an opening for workers in Bangladesh who are willing to part with their labor for less. History will chase those jobs away eventually, but Chinese textile workers are now beginning to understand the feelings their brothers in the Carolinas felt not too long ago.

A Falling Unemployment Rate Can Be Misleading

The unemployment rate fell in June to 9.5% from 9.7%, reaching its lowest point since last July. But the decline wasn’t due to improvement in the labor market. Instead, jobless Americans dropped out of the labor force in droves.
June’s decline in the civilian labor force of 652,000 was the sharpest one-month decline in 15 years in the Labor Department’s survey of households. Some people could be frustrated with their job searches, choosing to take time off or pursue other options like school. Some could be experiencing the end of their unemployment benefits, which required them to maintain an active job search. Whatever the cause, over the past two months almost one million people simply stopped looking for work. And over those two months, the U.S. population grew by 361,000 — with more than half of that gain coming in June.
The drop of 125,000 jobs in the monthly payroll report, which is compiled from a separate survey of employers, should have led to an increase in June’s jobless rate. The economy generally needs to add at least 100,000 jobs a month — often more — just to keep up with growth in the labor market and keep the unemployment rate steady. In June, people giving up hope and leaving the job market offset that need for more jobs to keep the jobless rate even.
What happens when all those people return? The unemployment rate is a measure of the total number of unemployed people — defined as those out of work but looking for work — as a share of the overall labor force. Once the economy improves, many of those people will restart their job searches and expand the labor force again.
If employers aren’t producing enough jobs to satisfy all that available labor — they probably won’t be — then the overall unemployment rate will rise again. The recent drops in consumer confidence and the recent pace of hiring suggests many Americans won’t be rushing back into the job market soon. That will mean continuing downward pressure on wages — and little underlying inflation.

Structural Unemployment In Manufacturing

Click on the title to go to a great article depicting the mismatch that exists between the demands for labor and the supply of workers in manufacturing. Continued automation and the evolution of manufacturing means that employers are looking for workers with sophisticated skills but the pool is apparently shallow. This is frustrating recovery in that sector.

Disparity Of Wages Worldwide

Click the image to enlarge

Source: FixR

A Race Michigan Does Not Want To Win