Thursday, December 18, 2014

Stocks Skyrocket, Most Left Behind, Especially Men

The Dow is up 709 points in two days to 17,778, its biggest two-day jump in over 6 years. The S&P 500--at 2,061--is near its record high, after leaping over 2% for two days in a row, something that last happened in 2002. A NASDAQ of 4,748 is close to the 5,000 level last seen in 2000. It all adds up to a total of 24,587, approaching the 2014 combined highs for the three indexes of 24,881.

The New Fox Index captures movement into stock market “outer space” first reached in May 2013, the escape velocity attained by soaring past old-time market theoretical limits of a Dow of 15,000, an S&P 500 of 1,600, and a NASDAQ of 3,500, for a total of 20,100. We are in deep space now, at +4,487 (see inset).

Of course, as the Washington Post’s Jim Tankersley has written,
the stock market is soaring, the unemployment rate is finally retreating after the Great Recession and the economy added 321,000 jobs last month. But all that growth has done nothing to boost pay for the typical American worker. Average wages haven’t risen over the last year, after adjusting for inflation. Real household median income is still lower than it was when the recession ended. Make no mistake: The American middle class is in trouble. . . over the past 25 years, the economy has grown 83%, after adjusting for inflation — and the typical family’s income hasn’t budged.
With the election over, the mainstream media is beginning to look hard at what’s going wrong with today’s American economy. In the New York Times, Binyamin Appelbaum has provided his paper’s detailed examination of the 10 million unemployed American men aged 25 to 54. Appelbaum finds:
  •  it has become harder for men to find higher-paying jobs. Foreign competition and technological advances have eliminated many of the jobs in which high school graduates . . . once could earn $40 an hour, or more. . .85% of prime-age men without jobs do not have bachelor’s degrees. And 34% said they had criminal records, making it hard to find any work. 
  • there are only 4.8 million job openings for men and women of all ages.
  • Almost half of those who did not seek work in the last year said they wanted to work. [Yet m]any men. . . have decided that low-wage work will not improve their lives, in part because [of] the availability of federal disability benefits; the decline of marriage, which means fewer men provide for children; and the rise of the Internet, which has reduced the isolation of unemployment. 
  • For most unemployed men, life without work is not easy. . . 30% had used food stamps, while 33% said they had taken food from a nonprofit or religious group. They are unhappy to be out of work and eager to find new jobs. They are struggling both with the loss of income and a loss of dignity. Their mental and physical health is suffering. Yet 44% . . . said there were jobs in their area they could get but were not willing to take. 
  • Men today may feel less pressure to find jobs because they are less likely than previous generations to be providing for others. Only 28% of men without jobs — compared with 58% of women — said a child under 18 lived with them. . . 37% of the decline in male employment since 1979 could be explained by this retreat from marriage and fatherhood. 
  • men who worked in manufacturing or construction, and now can find only service work, [believe] the obstacle is not just the difference in pay; it is also the humiliation of being on public display.  
 Comment: As liberals argue, the loss of manufacturing jobs has hit hard males who don’t make it through college. But other factors, including those of most concern to conservatives, also account for prime-working-years unemployment: federal benefits that match low-wage job income, males free of family responsibilities, and poor government schools that graduate men unprepared for today’s economy. Also, it’s clear many unemployed would prefer to be working--as Franklin Roosevelt knew in 1935--thereby enjoying the sense of self-worth that goes with holding a job.

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