3, 2, 1 … lift off
Economy nears escape velocity
HAPPY DAYS are turning into a binge as all systems are firing on all cylinders. Wherever Alert Reader turns, the news about the economy is the best it’s been in almost two decades.
This country’s unemployment rate was down to 4.1 percent at last giddy report. Only those (very) old-timers who have seen this boom-and-bust cycle before may be experiencing feelings of deja vu and thinking of 1929 instead of 2017. For they know that what goes up must inevitably come down, sometimes with a helluva crash. Ever-anxious readers of the business pages might note that the fall in the unemployment rate may be a result of many workers simply taking themselves out of the job market.
Last month’s best-of-all-worlds business news indicates that the storms of September have passed and all is smooth sailing again. To quote Jed Kolko, economist-in-chief at Indeed, a website specializing in job searches: “Hiring got a boost from the post-hurricane rebound, but the underlying trend remained steady.”
Brett Ryan, an economist with Deutsche Bank in New York, hastens to agree. “The bigger picture here is that the labor market’s fine.” But not necessarily for the lowest-paid workers at restaurants and bars who have returned to work. They’re benefiting from a trickle-down economy, but what they need and deserve is an economy that’s flooding with good jobs and good pay. For even as the unemployment rate has dropped to its lowest rate in a couple of decades, these workers aren’t getting their share of the gravy.
The economy has added jobs for more than 85 straight months—a new record. But at the lower end of the pay scale, labor, whether organized or not, is still waiting for its share of the country’s economic growth.
The balance of wages and power is shifting away from consumers to higher-paid professionals like accountants and engineers. Manufacturers have added 24,000 higher-paid jobs even as retailers lost 8,300. The trend is worldwide. On this ninth year of recovery from the Great Recession, all the major economies are expanding at the same time. According to the Institute for Supply Management, this country’s service sector has grown at its fastest rate in more than a dozen years, having already grown for 94 straight months.
Anthony Nieves, chairman of a committee that’s supposed to keep up with how confident American businessmen can be in these happy trends continuing, has already sounded a warning: “The question that remains,” he says, “is how sustainable is this.” But at least the superiority of free markets to command-and-control systems that do neither has been firmly established in the historical record. Some laws, like the one governing supply and demand, can’t be repealed.
The economic future, it has become clear, won’t be written in Russian or Chinese but in that curious dialect known as American—unless this country lets all these rosy projections go to its head and rests on its laurels. A dynamic economy can never afford to relax and simply assume that its competitors will stop. It’s a tough world out there, and pretending that it isn’t will only make it tougher to prosper.