Bush is making the economy too good
Cross-posted at Don Surber.
“But questions remain about how long the West can weather the problems that come with low unemployment.” — Matt Gouras of the Associated Press.
Damn that George Bush. He is making things too good for the American people.
Having the economy do well dries up the available labor pool. That increases wages. Increased wages mean incomes rise. Rising incomes will push income of the 46% of Americans who pay no federal income taxes (but they do pay FICA). Many of those in that taxless 46% will see their incomes rise to where they will have to pay federal income taxes — thus paying for that Tax Cut For The Rich.
That’s the evil plan: Make America prosperous to pay for those Tax Cuts For The Rich.
But have no fear, America. The Democratic Party will raise taxes on the rich to pay for all those social service programs such as unemployment compensation that we will need again, once Hillary Clinton is president.
The AP story:
HELENA, Mont. (AP) - The owner of a fast food joint in Montana’s booming oil patch found himself outsourcing the drive-thru window to a Texas telemarketing firm, not because it’s cheaper but because he can’t find workers.
Record low unemployment across parts of the West has created tough working conditions for business owners, who in places are being forced to boost wages or be creative to fill their jobs.
John Francis, who owns the McDonald’s in Sidney, Mont., said he tried advertising in the local newspaper and even offered up to $10 an hour to compete with higher-paying oil field jobs. Yet the only calls were from other business owners upset they would have to raise wages, too. Of course, Francis’ current employees also wanted a pay hike.
“I don’t know what the answer is,” Francis said. “There’s just nobody around that wants to work.”
Unemployment rates have been as low as 2 percent this year in places like Montana, and nearly as low in neighboring states. Economists cite such factors as an aging work force and booming tourism economies for the tight labor market.
For places like Montana, it has been a steady climb in the nearly two decades since the timber and mining industry recession. The state approached double-digit unemployment levels in the 1980s and began the slow crawl back in the early 1990s.
“This is actually the biggest economic story of our time, and we don’t quite grasp it because it is 15 years in the making,” said economist Larry Swanson, director of the O’Connor Center for the Rocky Mountain West at the University of Montana.
The U.S. Department of Labor reports the mountain West region - covering eight states along the Rocky Mountains - has the lowest overall unemployment rate in the nation. The region hit an all-time low of 3.4 percent in May.
The effects are everywhere. Logging equipment in Idaho sits idle as companies have a tough time finding workers. A shortage of lifeguards has forced Helena to shorten hours at children-only pools. A local paper in Jackson, Wyo., has page after page of help wanted ads.
In Jackson Hole, the Four Seasons Resort still had openings in late July. The problem has created longer hours and tougher working conditions for current employees.
For years, the resort has imported dozens of workers from Eastern Europe who often come as much for the summer recreation opportunity as the money. This year, however, that wasn’t enough and so for the first time the resort also sent recruiters to a high school job fair, said spokeswoman Greer Terry. It only helped a little.
[DOT DOT DOT]
Officials worry the razor thin labor market could bind economic growth, although there has been no indication of that yet.
“One of the reasons we are seeing the lower (unemployment) rates is we are starting to see more investment in our economy. It’s like finding an undervalued stock,” said Tyler Turner, Montana’s economic development chief.
In Helena, the pool of applicants has been shrinking even for jobs on the police force. For professional jobs, such as department managers, the city is considering hiring slightly underqualified people that can be trained on the job.
“This is the tightest market I have ever seen,” said Salty Payne, who has worked in the Helena City human resource office for 15 years.
Payne in part blames the area’s building boom, which is drawing workers to construction trades that are offering higher salaries.
Montana state lawmaker Art Noonan lives in the mining town of Butte - the epicenter of a big mining bust 20 years ago. Now, more people are moving in to build second homes and high paying jobs are coming back as copper prices go up.
“All of these things are sort of clicking at the same time,” Noonan said. “The only economic development we used to get was the creation of more economic development offices.”
In Utah - where unemployment rates have been hovering around 2.5 percent - amusement parks, trucking companies, telemarketing firms and others have been paying bonuses of hundreds of dollars or more to find workers.
“It boils down to the attractiveness of the (interior) West,” said Mark Knold, chief economist at the Utah Department of Workforce Services. “It is a population magnet.”
And workers have benefited. Utah workers saw a 5.4 percent average wage increase in 2006, Knold said.
But questions remain about how long the West can weather the problems that come with low unemployment.
“The hardest thing is to keep the economy growing at a strong rate when you have a low unemployment rate,” he said. “Take a company that wants to expand. Where is the next worker going to come from?”
Yes: Low unemployment, the nation’s shame.
Topics: Uncategorized
Posted by Don Surber at 9:53 am on Sunday, August 26, 2007
5 Responses to “Bush is making the economy too good”
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August 26th, 2007 at 10:03 am
Damn you Chimpy!
August 26th, 2007 at 10:33 am
Trust the MSM to find the cloud in every silver lining.
August 26th, 2007 at 10:35 am
There goes the ‘It’s the economy, stupid’ . If Iraq continues to improve the Dems are going to have to resort to insults. Ooops they already do that. Looks like the GOP could be in power for a while yet. At this rate they could regain both houses.
August 26th, 2007 at 12:16 pm
Thanks for clearing up the “who pays what taxes” argument. Everyone pays FICA, but when tax time comes, the difference is what goodies reduce the federal ducat.
Those NGOs and lobbyists who demand “living wages” don’t realize that those earn that living wage pay more FICA and taxes to the government. If they earned $5.85 per hour in the past, and get it doubled to $11.70, their federal tax burden goes up. E.g. considering a 15% Fed, 7.45% SocSec and Medicare tax, and a 5% state income tax, the $5.85 earner at 40 hours per week pays $64.23 in taxes to the government. At $11.70 per hour, the taxes increase to $128.46 - a 100% tax hike for a so-called “living wage” that may be a better wage, but a tax bonanza for the government.
August 26th, 2007 at 12:58 pm
Theo, have no fear. As Rebecca implied, our left will do everything in their power to bring the economy down (if they can, they will). Even at the risk of putting the very voters they count on to keep them in office, out of work…..AND of course Blame Bush.