I have been working in Financial Services now for 15 years. I do not have a PhD in anything let alone Macroeconomics, and even if I did ever pursue a PhD anything related to math would be the very last thing I’d get it in. That said…the firm I work for can easily see when we are in a down turn or up turn. I agree with your comment that “we” are the economy because it is partially dependent upon us as consumers to buy the goods and services that then create corporate profit.
Thing is…that’s happening. The GDP is way up from 6-8 years ago. Consumer spending is way up. Corporate profits are way up. WAYYYYYY UP.
When jobs in the private sector are not well earning enough or there doesn’t see to be enough of them available. It is not a reflection of the economy today as it is…it is a reflection of the economy from years past. Corporations loose money in down cycles as a result they are slow to hire and slow to increase wages during the following years to increase their own revenue stream and essentially make up what was lost.
Is it right? I’d say no. Is it smart? Again, not in my book it isn’t. I bet an economist would argue differently though.
My issue will and always be around the incredible compensation gap that grew since the 80’s. Back in the 70’s an average house cost $30k, a car $3k, and the average worker made around $15k while the average executive made around $150k. Today the average home costs $300k, the average car $30k, the average worker makes $45k and the average exec is making $10mil.
THAT is where the problem lies. Its so easy to see. And companies whose CEOs make hard choices to cut their own pay to redistribute to their work force (Mulally did this to help save Ford) find not only does their company survive…they thrive. Workers understand and appreciate the sacrifice a leader like that makes.
The economy as a whole is strong, even if the average person doesn’t feel it. That isn’t the economy causing that. What they are feeling the impact of is themselves being pushed out of the middle class and into the poverty class. Most of us are doing jobs where if compensation had kept up with inflation, we would be making $150k a year. Instead we make $50k and it simply isn’t enough.
