Auto Industry Workers by Segment

A total of 3 million workers were employed in the automotive and related fields as of September 2008.

Auto Industry Workers by Segment, as of September 2008

US Unemployment Rate: 1994 - 2008

The unemployment rate crept up to 6.5% in October from 6.1% in September. This is the highest it has been since 1994. So far in 2008, 1.179 million jobs have been lost.

US Unemployment Rate: 1994 - 2008

In retail sales, usually the last bastion of employment for those thrown out of other jobs, the cumulative number of jobs lost since November 2007 ( a year ago) is 325,000.

Cumulative Jobs Lost in Retail Since November 2007

US Unemployment Levels and Rate: 1998 - 2008

The US unemployment rate among those 16 and older rose in August 2008 to 9.376 million unemployed, a nearly 30% year-over-year increase and the highest number in over 10 years.

US Unemployment Level: 1998 - August 2008 (Millions)

Source: Bureau of Labor Statistics

In August 2008 the US unemployment rate stood at 6.1%, only .2% short of the level reached during the 1991 recession.

US Unemployment Rate: 1998 - August 2008

Source: Bureau of Labor Statistics

A Brief History of the Minimum Wage

The best time to have been on the minimum wage was the mid-'60s, when the minimum wage had the greatest buying power - $10.11 in 2008 inflation adjusted dollars. Since the mid-60s, the inflation adjusted value of the minimum wage has been dropping steadily, with an uptick in 2008 from its adjusted increase to $6.55. Another increase to $7.25 is scheduled for 2009, but that still keeps its buying power far below historical amounts. Minimum Wage
1938	$0.25
2008	$6.55
2009	$7.25
Highest value of the minimum wage in 2008 inflation adjusted dollars was in 1968	$10.11
Number of US workers paid hourly	75.9 million
Percentage of workforce paid hourly	58.50%
Percent making minimum wage	2.30%
Number of workers making minimum wage	1,748,000

Minimum Wage Adjusted for Inflation 1938 - 2008

The Inflation Story

The producer price index (PPI) is up 8.8% year over year, partly due to higher energy and higher commodity prices. But consumer prices are up only 4% on all items and 2.2%, excluding energy and food. This means that producers have been eating about 5% in gross margins to keep prices low. Discount retailers have been holding the line on prices as well, reluctant to give ground to any competitor. But if the PPI continues at this level or higher, eventually manufacturers and retailers will have to cave, accelerating the growth of inflation even more.

Producer Price Index is up 8.8% this year (8-19-08)

Core Inflation and Consumer Price Index through August 2008

At the same time, union membership has been falling steadily for the past two decades and outsourcing of white-collar information worker jobs gives workers less room to negotiate higher wages and salaries.

Partially offsetting the rise in prices, the dollar has been rising against foreign currencies, mostly due to their weakness, rather than the strength of the US economy. This makes imports cheaper and helps hold the line on inflation.

The Dollar Exchange Rate vs the Yen and Euro

All told, at the end of four years a 4% inflation rate, where the overall consumer price index is today, results in a $100,000 salary being worth only $80,000.

The Fed will have to turn its attention to this issue sooner rather than later if it wants to avoid a repeat of the stagflations of the late '70s and early '80s.

Unemployment rates, 2000-2008

Unemployment rates from January 2000 - July 2008, including those who have given up looking and those who are employed part-time but seeking full-time employment:

Source: Wall Street Journal

Unemployment rates in July 2008 are now almost equal to those of the recession of 2001.

Private Sector Union Membership in the U.S.

The percentage of U.S. private sector workers belonging to unions has shrunk from just over 16% in 1983 to 7.5% in 2007.

Source: Unionstat.com