Essay 1022

From The New York Post…

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YOU ARE WORKING HARDER & YOU ARE GETTING PAID LESS

By John Crudele

AMERICANS shouldn’t celebrate Labor Day just once a year. They should do it twice or maybe even three times — that’s how many jobs it now takes to maintain the standard of living they had in the early 1970s.

Yesterday was the 123rd anniversary of Labor Day as a national holiday. And now that people are going back to their post-summer, workaday routines, I thought it would be a good time for a reality check.

Politicians will try to make jobs an issue in the congressional election in two months. I’m not going there: The current financial state of the American household has more to do with the costs of homes, education and health care over decades, as well as the pricey amenities of life we’ve all come to love, than it does with political parties.

And we are paying for all that stuff with declining incomes.

Here’s a figure that I find stunning.

When I was in college in 1972 (and paying about $3,000 a year total for an expensive private school), the average American had an average weekly paycheck of $334.60.

Today, the figure is just $277.96 after it’s adjusted for inflation. And that is down about 90 cents a week from August of 2005.

Don’t believe me? Look it up on the U.S. Department of Labor’s Web site — www.bls.gov.

The tables go back to 1964, when average earnings were consistently over $300 a week.

If you look around, you’ll see that Americans are obviously surviving and even thriving. But they are doing it by taking on additional jobs, or by having more than one adult in each household working.

And that gets me to the current state of the job market, which can be best described as confusing.

Last Friday, the Labor Department announced that a modest 128,000 new jobs had been created in August. That figure was slightly higher than the 125,000 new jobs that Wall Street had been expecting, but the number was made a bit better when the government restated the previous two months upward by 18,000 new jobs.

(After I wrote a couple weeks ago that the employment number might be stronger than expected, some on Wall Street boosted their expectations to 130,000 new jobs.)

The fantasy Make Us Rich hedge fund that Bill King and I have conjured up made a measly profit of about $125,000 on Friday when we covered our short position after bond futures initially sank on the slightly better than expected employment figure.

But the jobs number was benign enough to allow stocks their typical rally on the first day of the month. And the Make Us Rich fund is using that as an opportunity to increase our bet that stocks will ultimately have a bad September.

So we are shorting another 500 contracts on the S&P index — adding to our anti-market bet. (see www.nypost.com for details.) Over the past month the Make Us Rich fund is up a mythical $5 million — about the price of a house I’d like to buy in Beverly Hills.