|Issue of the Day Posts Tagged ‘Economics’|
According to a Bureau of Labor Statistics report in June 2009, compensation costs for civilian workers increased 0.4%, seasonally adjusted, for the 3-month period ending in June 2009. For businesses, wages and salaries, comprising 70% of compensation, increased 0.4%. Benefit costs, 30% of compensation, increased 0.3%, a feat considering inflation for that time was nearing -2.1% in July. With healthcare benefits costs climbing despite negative inflation, many employers are passing some of the increased cost onto their employees. In fact many employers are increasing the premiums, annual deductibles, and prescriptions co-pays.
Civilian worker’s compensation wages and salaries costs increased 1.8% (compared to a 3.2% increase in June 2008), and benefits costs rose 1.8% (compared to 2.9%) in the 12 months ending in June 2009. Private industry workers fared worse as wages and salaries increased 1.6% (3.1% in June 2008) and benefits cost increased 1.3% (from 2.6% June 2008) over the same 12 months. Public administration wages and salaries, however, increased 3.0% in June 2009 (3.4% June 2008) and benefits cost rose 3.6% (3.5% June 2008) over the same 12 months.
The volatility of the oil market has many wondering what is fueling the rollercoaster prices at the pump. After last year’s wild run of $145 a barrel high in mid 2008 to $33 a barrel in December, the recent rise of crude oil prices to $67.97 a barrel has some wondering if demand is responsible or market speculation. All reports suggest that demand for crude oil will slip further by 3-4% in the West and 2% worldwide. Instead, experts point to the financial markets as the weak dollar made investors flee and turn to safer staple stocks such as oil and wheat, thus driving those commodity prices up. One of the red flags was the largest rise in monthly oil prices in 10 years as prices surged $11.38 from May 9th to June 9th. Also, OPEC has reduced production, and political and economic unrest have reduced output from other oil production countries like Iran, Venezuela, Mexico, Nigeria and Iraq.
World crude oil production has steadily risen since the early 1980s. OPEC reduced its production of crude oil by nearly half after 1980 whereas Non-OPEC countries continued increasing output.
In an op-ed running in 31 international newspapers, President Barak Obama reached out to the citizens of the world saying “We are living through a time of global economic challenges that cannot be met by half measures or the isolated efforts of any nation.” This message is ahead of the Group of 20 which will soon meet in London this month. He went on to say that “the success of the American economy is inextricably linked to the global economy. There is no line between action that restores growth within our borders and action that supports it beyond.” He then cited three recommendations for stabilizing and recovering from the global economic downturn: fiscal stimulus, restoration of credit, and efforts to stabilize emerging markets.
The premise of the President’s argument, that our economies are linked, has certainly been demonstrated by the global nature of this economic downturn. We have imported and exported so much over the years that our economies react to each other’s growth and contractions. In fact, by looking at the Gross Domestic Product for the member countries of the OECD — many members of the G20 are members of the OECD, including the US — an immediate parallel can be seen between the various growth rates of each nation and group.