Posted: June 20, 2015
By: Clay Cerny


Bloomberg reports what seems to be good news. John Williams, president of the Federal Reserve's San Francisco bank, says that the job market is doing so well that the central bank might need to raise interest rates. The article cites lower unemployment rates as the reason for the Williams' statement. Unemployment has declined greatly from its peak during the Great Recession. Even so, many Americans who are counted as employed are only working part-time. Many more are working full-time, but doing so at a low wage. Even workers who make middle class incomes are struggling because they have only received minimal raises over the past 5-8 years.

It’s great to be optimistic, and the Fed should be concerned with inflation. However, most Americans do not feel secure in their jobs and incomes. According to the Consumer Confidence Index of the Conference Board, Americans are not enthusiastic about the current economy. Almost as many people (11.1%) expect their incomes to decline as the small number (17.4). These metrics also show that most American are treading water, not what should be expected in an expanding economy. Politicians and the Fed need to address that concern and not simply focus on the unemployment rate. There will only be a real recovery when Americans feel financially secure.

Posted: February 12, 2013
By: Clay Cerny

In his State of the Union speech, President Obama proposed a $9 minimum wage and that the minimum wage should be pegged to inflation.  It’s great that he made this statement, but, given the GOP domination of the House, this proposal is nothing more than an act of wishful rhetoric.

It also doesn’t address the bigger problem:  stagnant wages and wage cuts.  One of my clients has spent 20 years in the insurance industry.  Over the last seven years, her commission has been cut from 15% to 10%.  If she doesn’t hit a target, it can go as low as 8%.  The company she works for is very profitable (You know, one of those major corporations that pays little to know federal taxes).  The industry is also profitable.  So why the salary cuts?  More money needs to be pushed to the top.

I think the minimum wage does need to be raised.  I also believe that the government needs to do more to spur job growth.  However, as long as workers are getting squeezed in what they are paid and not paid (benefits), the bigger problem will be a shrinking middle class and a larger class – the working poor.  Few politicians talk about that problem, and it will impact all of us very soon.