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Mike Larson, Money and Markets columnist and editor of the Safe Money Report, is giving a presentation to Safe Money Report members in Germany today. George Lambert, an editor on the Money and Markets team, is filling in.
This morning, the Labor Department announced that the U.S. added 214,000 jobs in October, enough to push the unemployment rate down to 5.8 percent — a six-year low.
The nation has added at least 200,000 jobs in each of the past nine months. Those numbers keep the U.S. on pace for its best labor market year since 1999.
More people working is indeed a sign that the job market should continue to improve. And it suggests rising economic confidence among businesses, leading them to keep their workers and look to hire even more employees.
Still, the improvement in hiring has yet to translate into higher wages. Average wages have grown slightly faster than inflation. On top of that, median annual household income of $54,045 remains 4.6 percent lower than when the recession began in late 2007, according to Sentier Research.
|This week, a majority of voters in four states voted to raise the minimum wage.|
However, this week, voters in four states said it was time to tip the scale by passing minimum wage increases. Their action brings to 17 the number of states that since 2013 have opted to raise minimum wages.
Moreover, opinion polls show significant majorities of Americans support increasing the federal minimum wage, which is currently set at $7.25. A full-time worker earning the federal minimum wage earns just over $15,000 a year, hardly enough for a family to survive. And like most issues in front of elected officials, it has become a political football.
President Obama said in his 2014 State of the Union Address that he intends to raise it to $10.10 — a 40 percent increase. But Republicans argue that across the board hikes would lead to layoffs.
In the states, Republican-elected officials have generally resisted pressure from unions and community groups to raise the minimum wages.
|“Is there a way businesses can afford to pay a living wage while remaining profitable?”|
So is there a way businesses can afford to pay a living wage while remaining profitable and hiring more workers?
I don’t have the answer to that one. But Denmark has apparently figured it out. The land of Vikings and Tuborg beer has no minimum-wage law. But there is an agreement between Denmark’s 3F union, the nation’s largest, and the Danish employers group Horesta, which includes Burger King, McDonald’s, Starbucks and other restaurant and hotel companies.
The agreement includes a base wage for fast-food workers of the equivalent of $20 an hour, about two and a half times what many fast-food workers earn in the U.S.
So where do you stand on the hot topic of minimum wage? Do you think a higher guaranteed wage would result in workers spending more, thus stimulating the economy?
Or do you think businesses would then have to increase prices resulting in a drop in revenue and job loss?
Or maybe you have another opinion or an idea that could satisfy both sides. Let us know what you think right here. Mike Larson is on assignment in Germany, but he closely follows your comments and will surely respond to them upon his return.
|Other Developments of the Day|
It is still a vague consideration and a long way off, but the mayor of Paris has asked French President Francois Hollande to hold off on any action to have the city bid for the 2024 Summer Olympics. The mayor’s remarks follow comments by Hollande saying that he was “in favor of the city of Paris presenting its candidacy, if it decides to do so.”
It also follows comments by the French National Olympic Committee president that there were “strong possibilities” that the CNOSF would want to enter the race. Paris Mayor Anne Hidalgo said she just wants to be sure that there is transparency from the International Olympic Committee on “how the bids are being considered” and wants the bid to be economically and environmentally viable, according to a Reuters report.
Planning to travel this Thanksgiving? Be prepared for even bigger crowds than usual. U.S. airlines expect to serve 24.6 million passengers in the 12 days before and after Thanksgiving. That’s up about 1.5 percent from last year. The Sunday after Thanksgiving, Nov. 30, is expected to be the heaviest travel day, with some 2.6 million people flying on U.S. carriers, according to a forecast from the Airlines for America trade group.
Still, airlines are saying they will have additional seats and flights available this year, which they claim will help alleviate the crowded conditions.
Are you planning to travel this Thanksgiving? Will you avoid certain types of travel? Have any tips? Feel free to share your views with our readers by clicking here.
The Russian ruble shows no signs of stabilizing amid continued Western sanctions and lower oil prices. The currency fell another 3 percent, a halt stopped only after a central bank official said that interest-rate increases haven’t been ruled out.
Russia spent some $30 billion to boost the ruble last month amid a selloff of the currency. According to Bloomberg, Russia’s currency reserves have fallen $73 billion to $439 billion as the sanctions and lower oil prices have put Russia’s $2 trillion economy on the brink of recession.
Sears Holdings Corp. (SHLD, Weiss Rating D) shares soared after the legendary, but struggling retailer said it was exploring selling off and then leasing back 200-300 of its buildings to increase its liquidity. The move would involve Sears creating a real estate investment trust (REIT) that would technically hold the buildings in its portfolio. Sears Holdings, which runs Sears and Kmart stores, also said it expects third-quarter sales to slip 0.1 percent, representing a 0.7 decline at Sears but a 0.5 increase at Kmart.
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