<p>It’s called “SPIN”. It’s very common among politicians for the opposite party. A good example is when a program has been getting 5,6,…10% increases in funding each year. Then because of finances, the program is only given a 3% increase in funding. The opposition automatically tries and tell the public that the program is “Being Cut”. It’s not being cut, the INCREASE just isn’t as much as it was in the past.</p>
<p>Same goes with the economy. People see a month of 65000 less jobs and they claim that unemployment is rising. They don’t understand economics at all. They don’t understand season employment. They don’t understand that you don’t just base employment and economic issues on a month to month basis. As of last month, our unemployment rate is 4.8%. But if people don’t know what and how CPI, average hourly earnings, PPI, CCI, productivity and import price index work, then they have no idea. Our growth has been very high for the last few years. It just doesn’t happen to be rising at the same rate it has been. There’s a major different between a slow down and a recession. </p>
<p>The worst part is that people don’t understand that a recession can, and most times is a very good thing for the economy and country. The problem is if the recession goes to far and becomes a “depression”. Recessions lower prices and brings the day to day costs back in line with what consumers can afford. When the economy is TOO HOT, unemployment is extremely low, many things happen. Wages go up. (Not necessarily good because it also raises the price of goods and services to make up for the increase in labor and services). With more disposable cash, supply go lower than demand. Prices keep going up and it turns into “Inflation”. Both extreme inflation and recession is bad for the average citizen. Either direction can cause a snowball affect. </p>
<p>The problem however is that many people don’t understand economics and they base their opinions solely on their emotions when they pay $3.00 a gallon for gas or $4 a gallon for milk. They don’t understand how EVERYTHING interacts with each other. I.e. We go haywire on the production of ethanol. We force the price of gasoline to go down due to supply and demand. However, the price of wheat, cattle, dairy products, bread, etc… go up because the supply of materials grown for ethanol has changed the production for other uses. There are pros and cons to a recession and inflation. When the economy goes too far to one side or the other, you need the other side to counter it. That’s why the minimum wage shouldn’t be increased. Those who know how economics work, realize that the concept of a minimum wage is bad. You take 5 workers making $5.15 an hour and you raise them to $7.00 an hour. As the employer, your expenses for employees just went up 20%. So, you raise your goods and services by 20% to break even to where you were. What good is that. But it’s not even that simple. Because if you do have minimum wage employees, and you give them a pay raise, then those making more than minimum wage will expect a pay raise. So, even though you think your costs only went up 20% for your 5 people now making $7 an hour, we haven’t considered that many of the material, ingredients, etc… that this service or product performs, has also gone up because their providers raised their prices also to make up for their increases. So, that simple little 20% increase in minimum wage, could lead to the consumer paying more like 30-40% of an increase. Increases are not linear across the board. But the consumer feels it. Then again, minimum wage was NOT MEANT to be a job to make a living on. It was designed for entry level workers learning skills and gaining experience. So, the argument of not being able to make a living on minimum wage doesn’t cut it. You aren’t suppose to.</p>