This is a gratuitous prop, but what the hell - silly us, we thought we had a new visitor to our site, but it turns out that she is an old visitor; she does, however, have a new site, so we will plug it, just because we can. Drop on by the site known as Two Write Hands, where you'll meet a lady who works for a distinguished publication of long standing. You will thrill to her exploits and those of her illustrious co-workers, and you will meet the Matriarch - a formidable personage indeed.
We welcome back to blogland our friend V, who was ailing but is now on the way back to health, thanks to a few warning signs that his body thought it prudent to send him. His journal is called TO GROW IS TO BE ANXIOUS, and at the moment he is in the midst of recounting a grand old faery tale, so go send him your well-wishes.
And now -
Allow us to preface this with full disclosure - we are necessarily investors. In the absence of paychecks - items we shall likely never lay eyes or hands on again, due to our disabilities - it is the sole means that we possess of making money, at least until our Social Security and pensions kick in, events that lie eight years in the future. But we have been wage earners, and we well remember what it was like to work for our living. This fact gives us an outlook that is possibly at variance with that of other, more well-heeled investors.
With that in mind, we would like to direct your attention to this article by Ellen Simon (who we hope will not mind that we have taken the liberty of reprinting portions of her work), and to put our spin on some of the items that she has here covered.
Workers who don't work on a farm and aren't supervisors are making, on average, $22.69 more a week than they did last year, according to the Labor Department.
What this means to us - the average worker is earning a gross wage that has increased by $1,180 per year. It seems like a reasonable sum, but not all workers will earn that much, and a goodly amount of that total will be eaten away by taxes and other fees, leaving substantially less for the worker to pocket.
But that raise is making some investors twitchy.
What this means to us - some investors are greedy and uncaring about wage earners.
Year-over-year increases in average wages are the steepest since the summer of 2001. After 17 quarters of double-digit growth in corporate profits while wages stayed flat, average workers may finally get a scrap of the economic expansion now in its fifth year.
What this means to us - For four year and three months before the present quarter, corporations have been earning fistfuls of money, while paying their workers little to nothing. Corporations have not even been spending most of those profits on upkeep and other necessities; they have been investing that cash in search of profits on profits. Finally, in the third quarter of 2006, the little gal or guy is finally getting a break.
The bad news is that wage increases could push prices higher.
What this means to us - in the aggregate, a small amount of extra spending money in each worker’s pocket will substantially increase the amount of money not under the control of corporations, thereby forcing them to raise prices so as to reacquire that cash, once again reducing the amount that individuals will be able to spend.The Federal Reserve's biggest concern about workers while their weekly earnings were flat was whether they would keep spending enough money to power the economy.
What this means to us - the Fed expected that workers whose earnings were flat would still bear the burden of keeping the economy afloat, even though they were treading water instead of moving ahead. Corporations earning substantial profits should not have been expected to do their part to support the economy."tightness in the labor market and the rate of increase in average hourly earnings should continue to cause concern at the Fed about upside risks to inflation."
What this means to us - more money in workers’ pockets will most likely lead to inflation, probably caused by corporations raising prices to compensate for losing some of their profits to their workers’ paychecks. Creator forbid that corporations should have to lose cash to make their employees’ lives a little easier.
rising compensation costs should be a drag on corporate profitability.
What this means to us - investors will be hurt because lower profits will mean a slight decrease in the earning power of their investments. Wage earners be damned - the investors, as putative owners of the corporation, are all-important.
The article goes on to explain in more detail what we have covered here; the copy that we read in our morning paper was substantially abridged, and caused us to search online for the original (if newspapers wonder why they are losing readers to the Web, this is the logical answer - to make room for more advertising and to save costs on newsprint, media conglomerates are depriving readers of the full impact and insights of the partial articles that they choose to print.)
Sorry, we just felt the need to vent.