U.S. Economy Adds 288,000 Jobs in April
CHRISTINE ROMANS, CNN ANCHOR: A decisive turn in the job market. I'm Christine Romans. This is YOUR MONEY.</s>UNIDENTIFIED FEMALE: Let it go, let it go.</s>ROMANS: There is a spring thaw and jobs are popping up like tulips. And 288,000 jobs created in April, unemployment 6.3 percent, the lowest level in five-and-a-half years. Broad-based gains with strong growth in professional and business services, retail, food service, construction, broad-based. For some Americans, this economy is back. There are even talent wars in some fields. But many Americans are still left out in the cold. The number of long-term unemployed remains too high -- 3.5 million people. And those jobs are added, they are not the ones that propped up America's middle class for so long. A new report find 44 percent of the jobs created over the past four years, low wage jobs. In fact, low wage industries employ nearly 2 million more workers than at the start of the recession. That's fueling even more income and equality. In 1981, America's top one percent earned eight percent of all pre-tax income. And 30 years later, 20 percent. It's one America with two economies. Which one do you live in? Mohamed El-Erian is the chief economic adviser to the German insurer Allianz, Carly Fiorina is the former CEO of Hewlett Packard. Today she chairs the charitable organization Good360. She also advised John McCain and Mitt Romney during their presidential run. Mohamed, bottom line, has the jobs market turned yet?</s>MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: It is turning. This was a very strong employment report for the reasons you cited, created lots of jobs, long term unemployment, while still too high, is coming down, and teenage unemployment is coming down. Two exceptions -- one is wages are stagnant, and secondly, the labor participation rate is down at levels we haven't seen since 1978. So on the whole a strong report, but there are still some more progress that needs to be made.</s>ROMANS: Yes, that labor force participation has been a real problem because you feed more people involved in the recovery to really make it broad-based. Carly, 288,000 jobs created last month, that is a good number on its face. But a new ABC-"Washington Post" poll shows President Obama's approval rating sit there at 41 percent, a new low. Again, that number, that poll was before this jobs report, but it doesn't seem like the president is getting any credit for jobs coming back. Does he deserve more credit?</s>CARLY FIORINA, CHAIRMAN, GOOD360: Well, I think the truth is all of us hold our breasts every month to see what the jobs report is. And then we heave a sigh of relief when the jobs report is good as it was this morning. And I think the reason we're all holding our breath and President Obama isn't getting much credit from the American people is because people don't feel as though this is a very robust recovery. And as you pointed out, the recovery is leaving a lot of people behind. So you have a middle class that continues to be hollowed out. You have more small businesses failing and fewer starting than in any time in 40 years. You have a labor participation rate we haven't seen since 1978, as was pointed out. In other words, there are still real problems in this economy despite a good report this month.</s>ROMANS: And the White House has also made this year the year of really talking about income inequality. Mohamed, that is the story right now, income equality. If this book almost 700 page, they can't keep it if stock, Amazon. It's called "Capital in the 21st Century." It's a French economist, Thomas Piketty. He argues capitalism, Mohamed is fueling a growing gap between top earners and everyone else. And listen to what he says. He says the answer is a wealth tax.</s>UNIDENTIFIED MALE: In a country where the wealth as compared to income is going to increase, it's a very reasonable evolution.</s>ROMANS: So tax the rich. Mohamed, is that answer?</s>EL-ERIAN: First, it's amazing to see a book like that selling out. It tells you that inequality is on the minds of lots of people. Second, it's good to see a book like that because it is data driven, and it puts into a global context and historical context what has been happening to inequality. There are two things I think people cannot disagree on. There is one big thing that people disagree on. People cannot disagree that inequality has been going up in this country. And two, people cannot disagree that beyond a certain level, inequality is no longer a driver of entrepreneurship but becomes bad for a society as a whole, including the rich. What we disagree on is what is that level? And no one knows for sure. In terms of what Mr. Piketty said, the wealth tax, as attractive as it may sound, is a non-starter. It's just not going to happen.</s>ROMANS: He says the same thing. He says it's what you'd like to see, but he doesn't think you would ever get consensus on that. Carly, speaking of consensus, this week, Senate Republicans blocked raising the minimum wage. President Obama says this is a very simple issue. Listen.</s>BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: Either are you in favor of raising wages for hardworking Americans or you are not. Either you want to grow the economy from the middle out and the bottom up so that prosperity is broad-based, or you think that top down economics is the way to go.</s>ROMANS: Carly, what about the minimum wage? Raise the minimum wage, why not?</s>FIORINA: Here's the truth about the minimum wage. It will help some people who already have a job. It will hurt people who do not have jobs. And so the issue is, do we not need to lift more people out of poverty and create more jobs? And do we not also need to drive ahead on industries that will create way above minimum wage jobs like energy, like approving the Keystone pipeline?</s>ROMANS: Mohamed, raise minimum wage?</s>EL-ERIAN: Yes. First of all, it's very hard to find conclusive studies that suggest that a higher minimum wage creates more unemployment. Second, this economy needs demand, needs aggregate demand. Businesses are looking for demand, and these people, does this segment of the population have the highest marginal propensity to consume? Thirdly, it's the right thing to do. So yes, we should raise it.</s>ROMANS: Two different views, the CEO, the economist, we'll leave it there. We'll be talking about it more this year. Carly Fiorina, Mohamed El-Erian, thank you both for your thoughtful comments. Daughters now earn nearly three times what their mothers did in the late 1960s and early 70s according to Pew. But daughters still earn less than their dad did and less than their brothers. For more stories about your money, give me 60 seconds on the clock. It's "Money Time."</s>ROMANS: When it comes to underpaying workers, Subway is fast food's biggest offender. Since 2000, Subway franchises have racked up 17,000 fair labor act violations. They paid workers $3.8 million in reimbursements. So much for the American dream of homeownership. Not since 1995 when "Braveheart" was in theaters was the homeownership rate so low. Only 64.8 percent of Americans own their home. Target aiming to be hack proof. It's spending $100 million to switch to the more secure chip and pin based credit card. Last year hackers stole credit card information from 40 million customers. This year, Microsoft will start selling X-Box One in China. The world's most populous country recently lifted a 14-year ban on gaming consoles. China's government feared video games could lead to violence and moral decay. Watch auto Netflix, Yahoo, AOL, and X-Box will al debut original online program in the year. AOL has already signed on James Franco, Katie Holmes, and Steve Buschemi. Yahoo! is giving Katie Couric her own show.</s>ROMANS: Coming up, Donald Sterling may go to court to fight for ownership of his NBA team. But can the court of public opinion and his fellow owners legally force him out? The business of behavior next.