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Where Incomes Will Grow the Most and Least
Tweet Share on Facebook May 7, 2010 Comment (2)I wrote recently about the 10 states where incomes are projected to grow the most and the least, based on data provided by forecasting firm IHS Global Insight. Below is a set of projections for each state, from highest to lowest. Most economists expect inflation to be about 2 percent per year for the next several years, so anybody who's income is growing by more than that is getting ahead, at least in economic terms:
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States Where Incomes Will Soar, and Stagnate
Tweet Share on Facebook May 7, 2010 Comment (12)The main economic worry these days is jobs—specifically, a lack of them. Still, most Americans who want a job have one, and as the economy gradually improves, workers will focus less on job security and more on boosting their pay, getting ahead, and reclaiming prosperity.
[See what's going right and wrong with the economy.]
Workers obviously have some control over how much they earn, since they can work more, get training that makes them more valuable, or simply persuade the boss that they deserve a raise. But a lot depends on where you live. Some areas have a dynamic economy that's able to create jobs briskly, while other places are over-reliant on shrinking industries or simply lack an economic spark. To identify states with the strongest and weakest economic prospects, we analyzed projections for personal income growth provided by forecasting firm IHS Global Insight. While it's just one economic indicator, growth in personal income is a good proxy for rising living standards. It reflects job growth—since a tight labor market is one thing that drives up wages—along with the quality of jobs and other factors that indicate a healthy economy. "Personal income growth translates into increased prosperity," says Mohammad-Qamar Siddiqui, a regional economist with IHS Global Insight. "It clearly shows the purchasing power for residents."
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Why a Rising Unemployment Rate is Good News
Tweet Share on Facebook May 7, 2010 Comment (69)It sounds dreadful. After drifting down consistently since last fall, the unemployment rate has suddenly shot up again, from 9.7 percent in March to 9.9 percent in April. But don't despair: A rising unemployment rate is actually one of the best signs yet that the economy is bouncing back.
[See 7 new rules for getting ahead.]
The unemployment rate rose for the right reason. Instead of shedding jobs, employers added 290,000 jobs in April, the strongest showing since 2007. The reason the unemployment rate went up is that a lot more people are suddenly looking for work. The government said that the labor force swelled by 805,000 people in April. That's more than three times the number of new jobs, so the proportion of people looking for a job but unable to find one went up. Still, that big increase in the labor force marks an important shift in sentiment among people on the fringes of the economy.
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What Washington Needs To Learn From Greece
Tweet Share on Facebook May 5, 2010 Comment (26)It'll never happen here.
That's what Washington politicians want to believe as they nervously ponder the vicious debt crisis that has bankrupted Greece. Inside the Beltway, it's easy to float above it all and bask in the belief that America is the most prosperous nation in the world, blah blah blah. Yet the Washington seers were also convinced that recessions were a thing of the past, Wall Street could regulate itself, and unemployment would never again hit 10 percent.
[See what's going right and wrong with the economy.]
There are, in fact, big differences between Greece and America, which makes it easy to refute direct comparisons. Greece has a huge underground economy, a dysfunctional tax system, and a nepotistic public sector that makes American-style crony capitalism look virtuous. By western standards, Greece's economy is uncompetitive and its workers are overpaid.
But there's also an alarming similarity between the two indebted nations: Both are run by feckless politicians who seem incapable of addressing problems of their own creation.
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Where Fliers Will Feel The United-Continental Deal
Tweet Share on Facebook May 4, 2010 Comment (2)Corporate mergers are always touted as a win-win—especially in the airline industry, where an excess supply of seats has been gutting profitability for years. The new deal between United and Continental, if approved by regulators, will create one huge airline, called United, that serves 370 cities and, in theory, has a better chance of being profitable than either standalone airline. That would be a novelty in an industry more accustomed to losing money than making it.
[See what's going right and wrong with the economy.]
But the "synergies" that supposedly make mergers worth the trouble also mean cuts in redundant overhead (often referred to as jobs), as well as service reductions in some cities. There's relatively little overlap between the United and Continental route maps, which means there might be less disruption than, say, a United-U.S. Airways merger would have caused. The two carriers say that the majority of the savings—which could total up to $1.2 billion—will come from new revenue, as the new carrier attracts more customers and broadens its international network. But there will still be a few hundred million dollars worth of cuts that will come from consolidating service, streamlining hubs, and cutting wherever there's overlap. I spoke with Seth Kaplan of Airline Weekly to identify these cities likely to be most affected by the merger:
Rick Newman
The global economy is mysterious, even scary. Chief Business Correspondent Rick Newman connects the dots. In addition to his writing for U.S. News, Rick is the co-author of two books: Firefight: Inside the Battle to Save the Pentagon on 9/11, and Bury Us Upside Down: The Misty Pilots and the Secret Battle for the Ho Chi Minh Trail.
Read Rick's latest blog entries here.
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