Week in Review
The Democrats have little good economic news during the worst economic recovery since that following the Great Depression. To create more economic activity they argue to raise the minimum wage. And to provide a pathway to citizenship for those illegally in the country. But will these help the employment picture? Well, we don’t have them now and employment is doing very well in parts of the country (see Tight Job Market in U.S. Cities Prompts Higher Pay by Steve Matthews posted 4/16/2014 on Bloomberg).
To hire 10 to 15 project coordinators this year, Sabre Commercial Inc. has boosted pay 10 percent and added a 401(k) retirement plan.
“It is an employee’s market,” said John Cyrier, co-founder and president of the 48-employee Austin, Texas-based builder. “We are definitely seeing a labor shortage in Austin and central Texas. I see it only getting worse.”
Companies across the U.S. from Texas to Virginia and Nebraska are struggling to fill positions with metropolitan jobless rates below the 5.2 percent to 5.6 percent level the Federal Reserve regards as full employment nationally. Competition for workers is prompting businesses to raise wages, increase hours for current employees, add benefits and recruit from other regions…
In New Orleans, where unemployment is 4.2 percent, “we are getting killed on overtime,” said Ti Martin, co-owner of Commander’s Palace, SoBou and Café Adelaide, which employ a total of more than 350 people. “We are doubling up and working extra hours,” and managers are filing in as cooks. The restaurants have a dozen or more openings, mainly for experienced chefs and servers, she said…
In Omaha, with a 4.5 percent unemployment rate, the Greater Omaha Chamber is coordinating a program that will increase the number of internships to more than 300 this year from 135 in 2012 at employers including Mutual of Omaha Insurance Co., Union Pacific Corp. (UNP) and ConAgra Foods Inc. (CAG) Exposing young people to the city has been an “excellent recruitment tool,” said Sarah A. Johnson, director of talent and workforce initiatives for the chamber…
The labor shortage is expected to worsen in some regions. In Houston and the surrounding area, construction for the oil, gas and petrochemical industries on the Gulf Coast will require about 36,000 more workers in 2016 than in 2013, according to Industrial Info Resources Inc., a Houston-area based research company.
Even with hot labor markets in some cities, twenty-nine metro areas still have unemployment rates of at least the October 2009 post-recession peak of 10 percent, including Atlantic City, New Jersey, and Fresno, California.
Virginia is doing well in the Washington area thanks to lobbyists and those getting fat on the largess of government. Nebraska is doing well because of some big national companies there. Which attract people there even though their taxes are a little on the high side. But the balance of good economic activity is in low-tax states. Such as Texas. Which has no state income tax. And the energy business is keeping the Gulf States doing well. Thanks to the energy boom in North Dakota. Which has the nation’s lowest unemployment rate.
So it is clear what is driving the economy. Energy. And low taxes. Put these together and you have low unemployment. Which is why Atlantic City and Fresno still have unemployment rates of at least 10%. Because these are in Democrat states. Which have high tax rates (California and New Jersey are the two of the highest taxed states in the nation). And prefer green energy over oil and gas.
A higher minimum wage won’t reduce unemployment. For California and New Jersey have some of the highest minimum wages in the nation. So a higher minimum wage is not helping their economies. But energy and low taxes will. As proven by the healthy economies in areas with them. And bad economies in areas without them.