Kerry's `Quality of Jobs' Argument Gains Wall Street Support

Come on, George, tell us again about the great jobs your tax cuts for the rich have provided. From Bloomberg:

Democratic presidential candidate John Kerry's assertion that the U.S. has been creating mainly low- paying, ``second-rate'' jobs during the past year's expansion is starting to resonate on Wall Street.

``The vast majority of net new jobs created have been in the low-wage sectors of the economy, and income growth has been disappointing,'' David A. Rosenberg, chief North American economist at Merrill Lynch & Co., wrote July 9. Lagging incomes may cause ``consumer spending to slow in coming quarters.''

Stephen S. Roach, chief economist at Morgan Stanley & Co. in New York, reached a similar conclusion: ``While there has been some improvement on the hiring front in recent months, the quality of such job-creation has been decidedly sub-par,'' Roach wrote the same day. ``Unless that changes, the risks to a sustainable economic recovery will only intensify.''

Gaining the economists' seal on the idea of sagging job quality may bolster Kerry's challenge to President George W. Bush, who counts Wall Street executives as some of his major campaign fund-raisers. Kerry, a 60-year-old, four-term senator from Massachusetts, has previously based his arguments primarily on data from the Economic Policy Institute, a labor-financed research group in Washington, according to his campaign.

In addition to Roach and Rosenberg, senior economist Benjamin Tal of CIBC World Markets Inc. in Toronto said in an interview that until the past two or three months the bulk of the new jobs created have been in the ``lower-wage'' category. CIBC is one of the 23 primary dealers, or securities firms that trade U.S. government debt securities directly with the Federal Reserve.