The June Jobs Report once again made it clear the economy remains strong. Unfortunately for the Feds, it is a reason to penalize the working class because increasing wages is bad for corporations.
Another good jobs report
The June Jobs Report is out. It is the 30th consecutive month of job growth. Employers added 209,000 jobs. The unemployment rate fell from 3.7% to 3.6%. Importantly, wages rose by .4% from the previous month, with an annualized rate of 4.4%.
The participation rate in the labor force is 83.5%, the highest level since 2002. As high as it is, there is enough slack to lure more workers.
All of that should be great news. At last, anyone who wants a job can have one. But as shown a few years ago by Klavon’s Ice Cream Parlor, more people would enter the workforce at the right price, a living wage. Paying $15/hr instead of the minimum wage of $7.25/hr, he got 1000 applications in one week.
The great news is one that corporate America will not live with. A paragraph in a New York Times article shows why our economy must be considered an inhumane system solely interested in the well-being of the few, the class with a large amount of capital.
A growing cohort of investors believes that sustained growth could plant the seeds of its own destruction, as the Fed reacts by keeping borrowing costs higher for much longer than businesses have anticipated. That could make some debt burdens unsustainable for businesses, especially those that rely on loans or lines of credit from banks or that may need to seek new funding from investors.
Corporate defaults on debt rose last month, to a level more than double the same period last year, according to Moody’s Investors Service. Some economists see that trend — ordinarily worrisome — as a sign of normalization. Bankruptcies became unusually rare after many businesses received a rush of emergency government aid.
“A rise in defaults following a rise in rates just isn’t that surprising,” said Justin Wolfers, a professor of economics and public policy at the University of Michigan.
The nonchalant, matter-of-fact nature of those paragraphs illustrates an inhumane system when one reads between the lines. The Feds are likely to keep raising interest rates to throw the economy into recession to stop wage gains that they assume the corporate parasites would pass on to the American people. They understand that the rate increases will kill businesses dependent on short-term loans. They also know that as these businesses close that more workers will be added to the pool, which will immediately kill wage gains. And as people pay more of their disposable incomes to banks to service their credit card, mortgage, and other loan debts, they purchase less and thus forcing *some* corporations to stop price increases.
The evil is that, instead of threatening price controls on corporations benefitting from windfall profits that they stole from the American people via inflation, they impoverish or destroy the personal economies of the working class. To be clear, our media has mostly lied to us. Inflation was a corporate choice. California Representative Katie Porter used her charts to prove that more than 50% of inflation was caused by corporate greed. And it is reflected in the +$1 Trillion profits in each of the last two years major corporations extorted from the working class.
We need a change. Electing Progressives across the board is the only option to create policies that serve us all.
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