Monday, October 05, 2009

Government must step up to the plate, both with honesty and with real jobs.

Where are real, full time, permanent living wage jobs going to come from for 40 million people? We keep asking and nobody in government or private industry is answering.

The real unemployment and underemployment situation in this country is far worse than the Federal Government is admitting to anyone, as every economic writer admits. But few ordinary people understand exactly how large the lies really are. The September figures are truly appalling.

The Market Ticker
Friday, October 2. 2009
Posted by Karl Denninger in Macro Economics at 08:50
September Unemployment: ACTUAL LOSS 995k

[Mass Media] Headlines: 263,000 "jobs lost" and unemployment rate up to 9.8%.

That's not good - there goes the "second derivative" argument.

Weekly earnings are also down by $1.54, which is bad news too.

But the Household Data is VASTLY worse than reported. Here are the month-over-month changes, and they're in the realm of frightening. (all numbers in thousands)

Civilian Labor Force: 154,879 to 153,617 this month.

Employed: 140,074 down to 139,079 this month.

That's a loss of 995,000 jobs, not 263,000, and the labor force contracted by 1,262,000 people!

The participation rate was absolutely decimated, down 0.6% this last month alone. The people "not in the labor force" rose by a staggering 1,516,000 in the last month.

The government doesn't count people as "unemployed" who have given up and exited the labor force, but as I have repeatedly noted whether the government counts them or not the corner store owner sure as hell does!

The fact of the matter is that nearly 1 million fewer people were working in September as compared to August; there has been absolutely no improvement in that trend whatsoever.

The carnage amoung retailers is getting hard to hide, however. Empty storefronts outnumber businesses still hanging on - and if you do go shopping, there is no staff around to help you, anywhere. And, more to the point, these businesses have no real hopes of hanging on much longer themselves, because people who are unemployed and who aren't making living wages at the jobs they do have simply don't have money to spend.

We get that, I think - or at least most readers of this blog do. But the part that many people don't get is that unemployment isn't just an economic problem. The people who can't make ends meet aren't going to just lay down and die when their benefits run out. They are going to be looking for somebody to blame, and that "somebody" is probably going to be Jews, amoung others.

Robert Reich
Former Secretary of Labor, Professor at Berkeley
Posted: October 2, 2009 10:45 AM
The Truth About Jobs That No One Wants to Tell You

Unemployment will almost certainly hit double-digits next year -- and may remain there for some time. And for every person who shows up as unemployed in the Bureau of Labor Statistics' household survey, you can bet there's another either too discouraged to look for work, or working part-time who'd rather have a full-time job or else taking home less pay than before (I'm in the last category, now that the University of California has instituted pay cuts). And there's yet another person who's more fearful that he or she will be next to lose a job.

In other words, ten percent unemployment really means twenty percent underemployment or anxious employment...

Considering there are approximately 200 million adults in this country, that means there are approximately 40 million people who are either unemployed or are not sufficiently employed to be making living wages.

...Unemployment of this magnitude and duration also translates into ugly politics, because fear and anxiety are fertile grounds for demagogues weilding the politics of resentment against immigrants, blacks, the poor, government leaders, business leaders, Jews, and other easy targets. It's already started. Next year is a mid-term election. Be prepared for worse...

And since many Jewish communities have antagonized their neighbors already, they can expect to receive the brunt of animosity and ill-will of the masses. And it's probably too late for Jewish enclaves and townships to start a campaign of "good PR" to re-establish the good will of those around them. The only real solution will be for these people to have living wage jobs - jobs that are NOT forthcoming. So who will be picking up the tab for this mess? The remaining taxpayers, of course, who will be on the hook for all of the Federal Government's misguided attempts to fix the situation.

...So why is unemployment and underemployment so high, and why is it likely to remain high for some time?

...businesses that don't have customers aren't going do a lot of new investing. And foreign nations also suffering high unemployment aren't going to buy a lot of our goods and services.

And without customers, companies won't hire. They'll cut payrolls instead.

Which brings us to the obvious question: Who's going to buy the stuff we make or the services we provide, and therefore bring jobs back? There's only one buyer left: The government.

But there is only one intelligent solution the Government could adopt, one I have suggested before: bring back the WPA.

Let me say this as clearly and forcefully as I can: The federal government should be spending even more than it already is...This is the only way to put Americans back to work. We did it during the Depression. It was called the WPA.

Yes, I know. Our government is already deep in debt. But let me tell you something: When one out of six Americans is unemployed or underemployed, this is no time to worry about the debt...

...But if government doesn't spend more right now and get Americans back to work, we could be out of work for years. And the debt will be with us even longer. And politics could get much uglier.

Addendum: This morning's job numbers are bad enough -- 263,000 more jobs lost in September, and unemployment now at 9.8 percent -- but look behind them and the news is even grimmer. The only reason the numbers don't look worse is that 571,000 workers dropped out of the labor force...

...State governments, meanwhile, continue to shed employees. Here's one of the most depressing statistics I've seen (if you need any additional ones): Some 15,600 teachers didn't return to work in September. They were laid off. So our classrooms are bigger, we have fewer teachers, and our students are presumably learning less -- at the very time when they need to be learning more than ever.

The teacher's unions would howl, of course, but some of those WPA workers could be classroom teachers, too, whether they like it or not. The needs of the kids need to come before the outdated and manipulative "requirements" that are imposed on teaching positions that keep thousands of intelligent, dedicated and competent people out of the teaching profession.

And of course, a big part of the new WPA should involve dedicated passenger rail.

But the point of this post is that there CANNOT be an economic recovery as long as millions of people are not making sufficient wages to afford to live in 21st century America, with or without sustainable mass transit. Right now, even if everybody had mass transit they would still be in trouble, because the median US income has been sliding toward third world nation standards for the last 35 years due to the pernicious "globalization" scam.

Government played a big role in allowing your living wage jobs to be farmed out overseas, and government should play a big role in replacing them with new living wage jobs. That's a no-brainer. There is no private industry anywhere that is going to be able to hire even a fraction of all the unemployed and underemployed people. Pretending we can continue with the consumerist "growth" paradigm is suicide. It's time to put our resources into creating a sustainable, self-sufficient, living wage economy instead.


SJ said...

America has so many laws artificially increasing the cost of labor & the cost of running a business and thinking people scratch their heads wondering why there's unemployment.

Ahavah Gayle said...

I agree US regulation has run way past guarantees of basic rights to observe shabbats and holidays, reasonably safe working conditions, and so on. But sweatshops aren't the answer either - the basic laws most of us have in mind are those that prevent employees from being exploited as they are in 3rd world countries. Those are good and necessary laws.

But we don't need micromanagement and intrusive paperwork requirements and the nuisance fess that often go with them. We don't need the onerous obstacles to starting new businesses where every single agency and bureau tries to get a cut of money before there's even a income flow. And we certainly don't need more idiotic zoning laws (or HOA regulations) that prevent people from working and running businesses out of their homes, garages, or basements. There are so many barriers to setting up a viable business that it's clear these are designed to keep entrepreneurs out of the market and protect the fat-cat transnationals from competition.

Ad infinitum.

SJ said...

I didn't say to go back to unsafe or generally bad working conditions.