Wall Street Worried About Working Class

Monday, 09 Jun 2014 08:38 AM

By Melissa Clyne

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
America’s working class has an unlikely advocate: Wall Street.

Long known for caring more about its own profits and bonuses than the minimum wage worker, even members of Wall Street are raising concerns about the snail’s pace at which wages are rising, according to The Wall Street Journal’s E.S. Browning.

"Without a real acceleration in wages it is hard to get a meaningful pickup in consumer spending," senior Bank of America Merrill Lynch U.S. economist Michelle Meyer told the Journal.

Despite a U.S. economy that created more than 200,000 jobs a month for four consecutive months — a first since the late 1990s — the number of jobs is not even close to squaring with population growth, according to Browning. Seven million additional jobs are needed to account for the rise in working-age people since 2008, according to the Journal.

"Right now the economy doesn’t seem to be supporting" the forecast, Meyer said. "If we had seen 250,000 or more jobs created in May we would be convinced that the economy is picking up in speed. But we didn’t see that."

Despite employment exceeding pre-recession levels, payrolls fell by 8.7 million from January 2008 to February 2010, USA Today reported. Since that time, non-farm jobs have risen by 8.8 million.

Compounding the problem, according to Jack Albin, chief investment officer at BMO Private Bank, which manages $66 billion in Chicago, new jobs usually pay less than pre-recession ones.

"New jobs are coming through at lower wages," Albin told the Journal. "Collectively, people have fewer dollars in their wallets, even though they have jobs again."

There’s a ripple effect that is impacting the housing market. New single-family home construction is running at less than 500,000 a month, half of what demographics dictate it should be, Albin said, and couples are waiting longer to get married and having fewer children.

"It is certainly making us a little more cautious on the economy," he told the Journal.

Consumer spending in April fell for the first time in a year, something economists are attributing to a combination of a brutal winter and slow wage growth. While they anticipate things picking up, some economists are getting nervous, many already reducing their yield forecasts.

Paul Dales, a senior U.S economist at research firm Capital Economics, has cut his forecast for the 10-year yield to 3 percent at year’s end, down from a previous prediction of 3.25 percent.

Related Stories:

© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Big Labor Millionaires Lead 'Income Equality' Convention

Friday, 19 Sep 2014 11:11 AM

Several of America's wealthiest union bosses spoke at the 2014 Ohio AFL-CIO convention in Cincinnati this week. The even . . .

Pew Poll: Liberals Choose Tolerance Over Faith

Friday, 19 Sep 2014 10:27 AM

Liberals are more likely to teach their children values about tolerance compared to conservatives, who prioritize religi . . .

Convicted Florida Felon Kills His 6 Grandchildren

Friday, 19 Sep 2014 09:55 AM

Authorities say a man who spent time in prison a decade ago for the shooting death of his young son killed six of his gr . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved