Tag: unemployment

U.S. Jobless Claims Top 20 Million Since Start of Shutdowns

New jobless claims reported today totaled 5.2 million filings for this past week. That brings the total seeking aid in a month of coronavirus-related shutdowns to 22 million workers and showing a broad shock for the U.S. labor market.

This graph shows the unemployment claims is off the chart. Notice where the unemployment rate was during the Great Recession. The graph goes to 6 million initial claims showing how disastrous the situation is now.

Thursday’s report also showed 12 million Americans received unemployment payments in the week ended April 4, a record. That is up from 7.4 million the prior week, which exceeded the highest level set in the 2007-2009 recession.

The maximum benefit in California is $450 per week.  An additional $600 will be added to that amount thanks to the CARES act passed by congress regardless of the California unemployment benefit.  It’s anticipated that the additional payments will last four months.  If your salary was $40,000 per year your weekly benefit is $385.  To qualify for the $450 benefit your annual income must have beeen at least $50,000 per year for the past year. Incidentally CARES stands for Coronavirus Aid, Relief, and Economic Security.

Who is to blame?

Middle Class and Working Class Have No Voice

“Total nonfarm payroll employment rose by 288,000, … the number of unemployed persons, at 9.8 million, decreased by 733,000.” These statements were copied from yesterday’s Employment Situation Summary issued by the U.S. Bureau of Labor Statistics.

The difference of 445,000 are the former workers who have decided to stop looking for work. The issue is not what their source of income will be. The issue for this discussion is the .4% drop in unemployment. At 6.3% the Federal Reserve can now say the goal of 6.5% has been achieved. We can now further reduce our bond buying (quantitative easing) program. The program goal is to keep interest rates low as an aid to business to encourage borrowing.

Did private enterprise respond as desired? It appears business saw the advantage of outsourcing manufacturing to other nations as the preferred business choice.

Congressional actions did not support the Federal Reserve. Rather than imposing taxes on companies that outsource or providing funds to build infrastructure congress did nothing.

Many reading this believe that congress did the right thing by not taking any action. That is the reason our economy is in its current condition.

The rich are happy! The poor? Well, they have no voice.

Elusive Solution for Unemployment

It’s a dog eat dog world.  For most people the attitude is your unemployment is not my problem.

If you were hoping that congress might pass some laws that would stimulate hiring, you will be disappointed.  Members of Congress are more concerned with their own employment than employment for everyone else.  Today is the last scheduled work day before both houses will recess until September 9.  Other than lowering taxes or starting major infrastructure projects there really is very little they can do to encourage employment.

Businesses look for ways to reduce their labor costs.  That means outsourcing and automation.    Today’s monthly employment report offers little hope for any significant relief in the next year.

The labor report says “In July, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 4.2 million. These individuals accounted for 37.0 percent of the unemployed. The number of long-term unemployed has declined by 921,000 over the past year.”

If you really want to work you will have to take extraordinary measures.  It might mean moving to North Dakota (you can make $15 an hour serving tacos, $25 an hour waiting tables and $80,000 a year driving trucks). An alternative might mean moving out of the country (jobs in Alberta, Canada thanks to oil sands extraction).  Filipinos have emigrated throughout the world to obtain work.  Why not Americans?

A Growing Welfare Class in the United States

I hear the constant drum beat that 47 million Americans pay no taxes.  That those people are on the dole.  All those people don’t really want to work.  The argument goes they are happy sitting in their homes doing nothing.

Is this all really true? If so, how did this happen?

A Google search [percentage of Americans paying income taxes] confirms that about one half of all Americans do not pay income taxes.  The sites How Stuff Works, Fox News, The Washington Post, Reuters, and others all offer their take on why this is fact and some offer arguments about changing the taxing system.  All the postings do affirm that everyone pays Social Security and Medicare taxes.

From How Stuff Works: So who are the 49 percent of Americans who don’t pay income taxes? The vast majority are the lowest income households, the elderly and young working families with children.

The reason this situation exists and is becoming worse was clearly defined in a Market Watch article posted on April 24, 2012.

Manufacturing employment as a fraction of total employment has been declining for the past half century in the United States and the great majority of other developed countries. A 1968 book about developments in the American economy by Victor Fuchs was already entitled “The Service Economy.”

Although the absolute number of jobs in American manufacturing was rather constant at about 17 million from 1969 to 2002, manufacturing’s share of jobs continued to decline from about 28% in 1962 to only 9% in 2011.

From CNN: A very large portion of U.S. apparel imports comes from Bangladesh. Many companies have been shifting orders there, because labor costs in the country are so low. Bangladesh is on track to surpass China within the next seven years as the largest apparel manufacturer in the world.

It is already the third biggest exporter of apparel to the U.S., behind China and Vietnam. The value of clothing imported from Bangladesh into the U.S. has quadrupled over the last decade to $4.5 billion annually, according to the apparel group.

Go into any store in the United States and you will find most products have been made in another country.  Talking to a lady at Trader Joe’s just yesterday and she complained that the fresh produce is primarily from Mexico.

Back in 2007 the total unemployed that included part time workers and those who have given up searching for a job was below 8.5% of the likely working population.  Today that number is 13.9%.  That is the BLS number referred to as U6 on the monthly reports.  It’s an improvement from the maximum number of 17.1% reached in October 2009.

I can’t prove it but I believe no one wants to live poorly when they see the things they can have with an income.  Unfortunately the poor are also the least educated.  That condition of poor education is partially lack of opportunity and partially lack of capability.  Not all of us are capable of working in Silicon Valley or performing surgery at the Mayo Clinic.  Those less technical jobs have been sent to the places where labor costs less.  Every company has the right to lower their costs.  Middle class and blue collar America has paid the price for those off shored jobs.

So the wealthy of America (they pay most of the taxes) have concluded that welfare is a cheap price to pay to keep peace in the United States.  It’s the thing the royalty of France and Russia did not understand.  We all know how that worked out.  There is no royalty in the United States but there is a wealthy class that is the equivalent of royalty.  Once again the U.S. leads the list with 442 billionaires the most of any nation in the world says Forbes magazine.  The New York Daily News reports that there are 9 million members of the millionaires club in the U.S.

My prediction is that the welfare class will continue to exist in the United States and is likely to grow throughout the 21st century. This is not negative. It is reality.

GDP and Unemployment Performing Poorly – Welcome President Romney

The Gross Domestic Product (GDP) in the United States expanded 1.9 percent in the first quarter of 2012 over the previous quarter. That is a revision from a preliminary 2.2% estimate.  Historically, from 1947 until 2012, the United States GDP Growth Rate averaged 3.3 Percent reaching an all time high of 17.2 Percent in March of 1950 and a record low of -10.4 Percent in March of 1958.

During the great recession GDP fell to -8.9%.

At the present time the economy appears to be back sliding.

Can the government really impact the growth of the economy?  Most of us seem to believe the answer is yes.  Barack Obama will be blamed for the situation.

Unless Mr. Obama can convince a majority that things will be worse if Romney is elected he will be a one term president.

Economy is Job One!

May 4, 2012 Addendum.  The April jobs report confirmed my worst fears.  The U.S. economy added just 115,000 jobs and yet the unemployment rate is down another tenth of a percent to 8.1%.  In other words more people have given up the search.  This is another great day for Mitt  Romney.  Everything I wrote on April 28 remains valid.  The difference  is it has just been reinforced.    

Is the recession over? Not if you are unemployed. Over 12 million Americans are in that status. Most of those people have families that have been impacted. The impact is more likely on three to four times that number. Worse is that the number is not the real number because many more people are no longer counted as unemployed. Most economists add about 50% to the official numbers to reach that real number.

The Obama administration failed to address the primary issue facing the nation. That is the condition of our economy.

Where is the plan to change our course of outsourced jobs? It does not exist.

The latest pieces of economic data support the feeling that the economy is struggling to recover from the Great Recession. New claims for unemployment benefits dropped to 351,000 in the week ending February 11 of this year but have been increasing every week since then with one exception. Gross Domestic Product (GDP) for the first quarter of 2012 grew 2.2% versus a growth of 3% in the last quarter of 2011. The president can’t be held responsible for everything in our economy but there is little he has done or proposed to improve the situation.

 The problem is that Mitt Romney has not enunciated any actions he would take that would change our desperate employment situation. The number of unemployed reached over 14 million people and has now dropped to under 13 million. However the number of long term unemployed has not been significantly reduced and still remains over 5 million people. Obama’s policies did save the country’s auto manufacturers but too many products and services are now provided in other countries.

Americans are the employer of the president. We have the right to expect results. Barack Obama’s four year contract is almost up. Unfortunately the alternate candidate for the job has not told us what he would do to change our economic situation.