Yesterday the stock market swooned over the “unexpected surge” in unemployment, to 6.1% (which, by-the-by, is still one of the lowest rates in the world). Naturally the media breathlessly echoed this sentiment.
Well, I'm beginning to think they're all idiots. This “unexpected surge” was completely expected by me. Along with a few of the (truly unexpectedly!) more intelligent politicians who opposed the raise in the minimum wage.
Because, you see, every single raise in the minimum wage has been followed by a surge in unemployment – as employers get rid of the workers whose work is no longer worth what they're legally required to pay them.
Bet those workers aren't all that pleased right now. That raise in minimum wages sure did them a lot of good now, didn't it?
There's only two possibilities here, you know. Either there's a lot of idiots around, or there are a lot of people who believe in magic and the tooth fairy.
Either way, it sure ticks me off.
Idiots!
In my opinion, the version of the surge in unemployment you speak of may or may not be dictated by a minimum wage increase. Typically what you say is true. But we are in untypical times right now. Let me explain; if it's the kind you talk about, then jobs will recover as the employers need to hire back some workers as hopefully their production increases dictate. (over time). However, in the present case, with the economic indicators I'm looking at, this period of job loss just may be an indicator or precursor of much harder times to come. Lots of economic indicators are at all time lows, and some other pretty bad indicators, job losses inclusive, are at all-time highs, like small bank failures, major investment banks teetering on the brink of failure, and the mortgage crisis. Time will tell which version pans out to be true, however, I fear the latter... I think we are in for some bad times---I only hope its not to late for us to dig our way out, but it just may be...
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