[PEN-L:8277] BLS Daily Report

[Richardson_D <Richardson_D@xxxxxxx>]

> BLS DAILY REPORT, WEDNESDAY, JUNE 23, 1999:
>
> Today's BLS News Release:  "Average Annual Pay by State and Industry,
> 1997" indicates that the average annual pay of all workers covered by
> state and federal unemployment insurance (UI) programs was $30,336 in
> 1997, a 4.8 percent gain over the 1996 national average. The annual pay of
> private industry workers, comprising 84.4 percent of the nation's
> employment, rose 5.1 percent in 1997, while pay for government workers
> rose 3.2 percent.  In 1996, the increase in pay for private sector
> employees was 4.2 percent and for government workers, 3.1 percent.
>
> "Let's celebrate a quiet revolution:  The return of 'full employment',"
> writes Robert J. Samuelson in The Washington Post (page A21).  In the
> 1960s and 70s, politicians and economists clamored for it, defining full
> employment as an unemployment rate of 4 percent.  They were repeatedly
> disappointed, because whenever joblessness dipped so low, inflation
> accelerated.  Now look:  Low unemployment and inflation coexist, Samuelson
> continues.  The jobless rate has been below 5 percent since mid-1997, but
> inflation remains tame.  In 1998, the CPI rose a mere 1.6 percent.
> Probably no one economist in a hundred would have predicted this 5 years
> ago.  The reason is that most economists subscribe to a theory called the
> "natural rate" of unemployment.  It holds that, below a certain
> unemployment rate, the job market becomes so tight that wages and
> inflation inevitably surge.... In the early 1990s, most economists put the
> natural rate of unemployment at about 6 percent.  Optimists went down to
> 5.6 percent or a bit lower.  It now seems that even the optimists were too
> pessimistic -- with wondrous results.  The old natural rate seemed to
> preclude a job boom from ever reaching the poorest and least skilled
> workers.  This is less true now, which is one cause of the early success
> of welfare reform.  What's occurred in the U.S. is that refashioned pay
> practices to cushion the conflict between rising wages and higher prices.
> Economists Lawrence Katz of Harvard and Alan Krueger of Princeton argue
> that the natural rate has fallen by about a percentage point since the mid
> 1980s for three reasons: (1.) Older workers.  Since the late 1970s, the
> share of the labor force under 25 has shrunk from about 25 to 16 percent.
> Older workers change jobs less often.  This reduces their bargaining
> power.  It also cuts unemployment.  (2.) Temporary-help agencies:  In
> 1998, they filled about 2 percent of all jobs, up from 0.5 percent in the
> early 1980s.  As a result, many unemployed workers get jobs quicker.  And
> companies can attract new workers without resorting to across-the-board
> wage increases to all workers.  (3.)  The prison population.  Since 1980,
> it's quadrupled from 316,000 to 1.3 million in 1998.  About 90 percent are
> men.  Before prison, they had abnormally high jobless rates.  Samuelson
> continues: "The Fed has concentrated on containing inflation.  Hardly
> anyone talked about full employment, but the silence improved the odds of
> its realization.  The determination to hold prices in check forced
> companies and workers to change their behavior in ways that made it easier
> to expand employment without causing inflationary bottlenecks.  Even with
> business cycles, this elevates everyone's lifetime job prospects."
>
> The financial benefits of the Internet and high technology extend beyond
> the quick riches they have brought high-profile entrepreneurs and
> investors in recent year to the Nation's economy as a whole, a new
> Government study shows.  The information technology industry generated at
> least a third of the Nation's economic growth between 1995 and 1998, the
> Commerce Department says in a report released today. Those goods and
> services also got cheaper, and allowed businesses to become more
> productive, cutting inflation by .07 percent in 1996 and 1997.  "The
> improvement in technology, in productivity, is what has made the economy
> so incredibly attractive in the last couple of years, William J.
> McDonough, president of the Fed of New York, said in a speech in New
> Jersey.  Today's Commerce Department report says workers in information
> technology have been at least twice as productive as other workers from
> 1990 to 1997 and nearly 78 percent more than other workers (Bloomberg
> News, in The New York Times, page C8).
>
> Buoyed by a robust economy and a surging stock market, more Americans,
> particularly duel-income couples, are paying others to cook, clean, mow,
> weed, drive, and mind the children, among many other chores.  Last year,
> the number of servant-type jobs -- nannies, maids, gardeners, pool
> cleaners, butlers, cooks -- grew 8 percent to almost 1.8 million, more
> than 5 times the rate of overall job growth, according to BLS and that
> probably undercounts the use of domestic help, since it doesn't count
> illegal immigrants.  The current boom in domestic help is fueled not just
> by the growing wealth of the middle and upper middle class but also by the
> abundance of illegal immigrants -- particularly in California and Texas,
> willing to accept extremely low wages (The Wall Street Journal, page B1).
>

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