Tag Archives: Unemployment

Obama’s “No Growth, No Jobs, No Recovery” Economy Gives Up The Ghost

By Mike Whitney
May 2, 2015
CounterPunch, April 30, 2015

 

Stock Market DropThe world’s biggest economy ground to a standstill in the first quarter of 2015 wracked by massive job losses in the oil sector, falling personal consumption, weak exports and droopy fixed investment. Real gross domestic product (GDP), the value of the production of goods and services in the US, increased at an abysmal annual rate of just 0.2 percent in Q1 ’15 according to the Bureau of Economic Analysis demonstrating conclusively that 6 years of zero rates and Large-Scale Asset Purchases (LSAP)– which have enriched stock speculators, inflated the largest asset-price bubble in history, and exacerbated inequality to levels not seen since the Gilded Age– have done nothing to improve the real economy, boost demand or reduce unemployment. As the BEA data illustrates, the US economy is basically DOA, a victim of criminal congressional negligence and Central Bank chicanery.

From the BEA release:

“The deceleration in real GDP growth in the first quarter reflected a deceleration in PCE, downturns in exports, in nonresidential fixed investment, and in state and local government spending, and a deceleration in residential fixed investment that were partly offset by a deceleration in imports and upturns in private inventory investment and in federal government spending.”

Translation: The economy is in the shi**er. Consumers aren’t spending because the crap-ass jobs they landed after the crisis pay half as much as the jobs they lost when Wall Street blew up the financial system. Personal savings are up and spending is down because households face an uncertain future where pensions are being trimmed and Social Security is under attack. Also, spending is impacted by the historic low (employment) participation rate which indicates that joblessness is much higher than the government’s phony numbers suggest. When workers are unemployed they don’t spend, activity drops, and the economy tanks. It’s that simple. Today’s data just confirms what most people already know, that the economy stinks and that they’re being ripped off by a voracious oligarchy that’s stacked the deck in their favor.

The US economy is stuck in the mud because our bought-and-paid-for congress has relinquished all authority and handed over the management of the economy to the industry-controlled Federal Reserve. Whereas our current budget deficits are in the range of 2 percent per annum, the government should be spending a lot more to compensate for the slowdown in private sector spending and investment. In the past, the congress and president would initiate sensible Keynesian fiscal stimulus programs to keep the economy sputtering along while households repaired their balance sheets or businesses struggled with weak demand. Those tried-and-true remedies have been jettisoned for the new monetarist orthodoxy that requires that all the nation’s wealth be filtered through the Wall Street casino so that the pampered thieves who destroyed the country with their mortgage-securities-Ponzi-scam be further rewarded for their insatiable greed.

Manufacturing, retail sales, MBA purchase applications, business investment etc, are all in the toilet. There’s a very good chance the economy is already in recession which will undoubtedly send stocks even higher since every proclamation of bad news generates a buying frenzy by clever speculators who anticipate that the Fed will continue to extend the zero rates and easy money to infinity.

It’s worth noting that the economy had been hanging on by the skin of its teeth mainly do to strong activity in the oil patch where credit expansion, intensive corporate investment, and high-paying jobs (which supported 4 additional jobs in the local economy!) contributed more than $200 billion per year to GDP. Now domestic oil production is in deep distress. Layoffs recently surpassed the 100,000 milestone (See: Oil Layoffs Hit 100,000 and Counting, Wall Street Journal) and borrowing has dried up. Economist Warren Mosler explains the impact the cutbacks in domestic oil have had on GDP in this video from RT that I have transcribed:

“The price drop in oil has turned out to be the unambiguous negative that we had talked about before….where income saved by the consumer, is lost by another consumer. For every dollar not spend by one consumer, another doesn’t get it. ..so you’re just left with the collapse in capital expenditures. (business investment) It turns out, there was about $150 borrowed in the sector last year, driving what modest growth we had last year. Since that disappeared, all the numbers have been going straight down. Unless something steps up to the plate to replace the lost borrowing-to-spend from chasing $100 oil, I see no hope whatsoever.” (Warren Mosler Interview, RT)

Economic recovery requires credit expansion, business investment and jobs. All three of these were severely impacted by the Obama’s goofy plan to push down oil prices in order to destroy the Russian economy. Here’s a brief summary:

“John Kerry, the US Secretary of State, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.” (Stakes are high as US plays the oil card against Iran and Russia, Larry Eliot, Guardian)

As indicated by today’s ghastly GDP data, Obama not only shot himself in the foot, he might have blown off his whole leg. Aside from the colossal growth in private inventories–which will be a drag on future growth–todays report was nothing short of a disaster.

Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.

IMF warns of slow growth, high unemployment

By Barry Grey
April 11, 2015
World Socialist Web Site

 

4e907-global-unemploymentThe International Monetary Fund warned Wednesday that the world economy would remain locked in a pattern of slow growth, high unemployment and high debt for a prolonged period. The forecast, contained in the organization’s updated World Economic Outlook (WEO), marks a shift from previous economic projections in acknowledging that there is little prospect of a return to the growth levels that prevailed prior to the 2008 Wall Street crash.

Parts of the semi-annual WEO were released ahead of the report’s formal issuance this coming Tuesday. The publication of the economic update is timed to coincide with next weekend’s spring meetings of the IMF and World Bank in Washington.

The document’s grim analysis amounts to a tacit acknowledgement that the crisis ushered in nearly seven years ago by the financial meltdown is of a historical and fundamental character, and that the underlying problems in the global capitalist system have not been resolved.

The report focuses on a sharp and persistent decline in productive business investment, particularly in the advanced economies of North America, Europe and Asia, and concludes that “potential growth in advanced economies is likely to remain below pre-crisis rates, while it is expected to decrease further in emerging market economies in the medium term.”

The report adds, “These findings imply that living standards may expand more slowly in the future. In addition, fiscal sustainability will be more difficult to maintain as the tax base will grow more slowly.”

While pointing to a number of factors behind the global slowdown, including an aging population in the advanced economies and declining productivity rates, the IMF overlooks the colossal role of financial parasitism in diverting resources from the productive forces—including, above all, the international working class.

This omission is all the more glaring in light of this week’s developments. European stock markets hit record highs, Asian markets soared, and three mega-merger deals were announced, including two totaling $100 billion in a single day.

These examples of wealth-creation for the corporate-financial elite, entirely divorced from and at the expense of productive investment, illustrate the manner in which the world’s capitalist governments and central banks are financing a bonanza for the rich and super-rich, while the real economy remains mired in slump and the living standards of the vast majority of the planet’s people are driven down.

Speaking Thursday before the Atlantic Council, a Washington DC international affairs think tank, IMF Managing Director Christine Lagarde said, “Six months ago, I warned about the risk of a ‘new mediocre’—low growth for a long time. Today, we must prevent that new mediocre from becoming the ‘new reality.’”

She pointed to “what I have called the ‘low-low, high-high’ scenario: the risk of low growth-low inflation, and high debt-high unemployment persisting for a number of advanced economies.”

Lagarde warned that subnormal growth increased the risks of a new financial breakdown. “This means that liquidity can evaporate quickly if everyone rushes for the exit at the same time—which could, for example, make for a bumpy ride when the Federal Reserve begins to raise short-term rates.”

She also noted that 2015 would likely mark the fourth consecutive year of below-average trade growth.

Her prescriptions for accelerating growth by increasing demand and productive investment were tailored to the interests of big business and hostile to those of the working class. She stressed the need for “structural reforms” in labor markets—a euphemism for stripping workers of whatever job protections remain in place—and removing energy subsidies in oil-importing emerging economies.

The IMF report and Lagarde’s statements echo the warning issued last week in a Financial Times column by Lawrence Summers, Harvard economics professor and former US treasury secretary. Alluding to the concurrence of ultra-low interest rates, soaring stock markets and underlying deflation in the real economy, Summers wrote:

“We may be headed into a world where capital is abundant and deflationary pressures are substantial. Demand could be in short supply for some time. In no big industrialized country do markets expect real interest rates to be much above zero in 2020 or inflation targets to be achieved.”

In the World Economic Outlook, the IMF predicts that, in the advanced economies, growth in “potential output,” i.e., output consistent with stable inflation, will average 1.6 percent a year between 2015 and 2020, much lower than the average growth rates before the 2008 crash, when potential output expanded at 2.25 percent.

The IMF forecasts an even sharper decline in growth in emerging markets such as China, India, Brazil and Russia, with potential output overall set to fall from 6.5 percent a year between 2008 and 2014, to 5.2 percent over the next five years.

Alluding to the depth and scope of the current crisis, the document states: “Unlike previous financial crises, the global financial crisis is associated not only with a reduction in the level of potential output, but also with a reduction in its growth rate… Shortly after the crisis hit in September 2008, economic activity collapsed, and more than six years after the crisis, growth is still weaker than was expected before the crisis.”

In a chapter entitled “Private Investment: What’s the Holdup?,” the document explains that business investment in the advanced economies declined, on average, by 20 percent during the six years after the onset of the financial crisis, twice the average decline of 10 percent during the six years following historical recessions.

It really is no mystery why productive investment has fallen so sharply in the current crisis. Reflecting the immense decay of capitalism as a whole, and, in particular, American capitalism, the corporations have hoarded the trillions they accumulated by slashing jobs and cutting wages and benefits on the one hand, and speculating with the virtually free cash from the central banks and profiting from the inflation of stock prices on the other.

Instead of investing this money in production, they have used it for parasitic purposes such as stock buybacks and mergers and acquisitions. These activities create no real value, but they add to the fortunes of the financial elite. Corporate buyouts, in fact, shrink the productive forces by consolidating facilities and slashing jobs.

This explosion of parasitism was in full swing this week as European stocks climbed to new records, and Japan’s Nikkei index topped 20,000 for the first time in 15 years on Friday, before falling back to 19,907.

The Stoxx Europe 600 index rose 4.49 points Thursday to close at 409.15, surpassing the previous peak of 405.50 reached at the height of the dot-com boom in March 2000. The benchmark index is up more than 19 percent so far this year.

Germany’s DAX index, which hit a record earlier this year, is up 24 percent so far in 2015. Major indexes in France and Italy have recorded gains of more than 20 percent.

In Asia, Japan’s Nikkei has risen 14 percent and Hong Kong’s Hang Seng has climbed 14 percent.

On Wednesday, meanwhile, Royal Dutch Shell confirmed it had agreed to buy Britain’s BG Group for some $70 billion in the biggest deal in the energy sector in more than a decade. This takeover is expected to usher in further mergers and consolidations in the oil and gas industry, resulting in thousands of job cuts.

The same day, Mylan, one of the biggest generic drug groups, announced a bid to buy Perrigo, a maker of cough medicine and allergy remedies, for $28.9 billion. Already, in the first three months of 2015, the total value of health industry deals surpassed $95 billion, a 70 percent increase from the same period a year ago. The day before, the Dutch package delivery company TNT Express agreed to be bought by FedEx for $4.8 billion.

The value of all takeovers announced thus far in 2015 is more than $1 trillion. At the current pace, the volume of mergers and acquisitions for the full year will exceed $3.7 trillion, making it the second biggest year in history after 2007—the year before the financial crash.

Wall Street bankers are raking in millions from these deals. On Wednesday alone, Goldman Sachs helped organize the Shell-BG and Mylan-Perrigo deals, totaling $100 billion. The bank could pocket over $50 million from the Shell takeover alone.

US layoffs mount amid signs of economic slowdown

By Andre Damon
March 28, 2015
World Socialist Web Site

 

US corporations announced thousands of layoffs this week amid a series of plant closures, mergers and consolidations and signs of declining economic growth.

On Wednesday, US Steel announced 2,080 layoffs at its Granite City Works in Illinois. The Pittsburgh-based steelmaker plans to lay off over 4,500 employees nationwide, including over 1,800 workers in Alabama. Job cuts are also planned in Minnesota and Texas.

The same day, steelmaker Worthington Industries of Columbus, Ohio announced plans to lay off 555 employees nationwide. Of these, 310 are to lose their jobs as a result of the closure of a plant in Florence, South Carolina.

On Thursday, Ohio-based Republic Steel announced 200 layoffs at its Lorain, Ohio plant.

The steel companies said the layoffs were a response to a fall in demand stemming from the drop in oil prices and appreciation of the dollar, which have led to a reduction in international orders.

Also on Wednesday, HJ Heinz announced plans to buy Kraft Foods Group in a $36.6 billion deal that, according to one analyst, could lead to 5,000 job cuts, affecting nearly one quarter of Kraft’s North American work force.

The fate of tens of thousands of RadioShack workers and their families hung in the balance Friday as lenders and hedge funds wrangled at auction over the remains of the bankrupt consumer electronics chain, which presently employs 27,000 people at more than 4,000 locations nationwide.

Salus Capital Partners said Friday that it had outbid its nearest competitor, hedge fund Standard General, offering $271 million in cash as part of a plan that would completely dismantle the company, laying off all employees and selling off inventory and fixtures. Standard General had offered $16 million in a plan that would have kept 1,740 stores open, saving 7,500 jobs, but still laying off nearly 20,000 workers.

Office supply retailer Staples, which announced plans to merge with Office Depot in February, filed documents with the Securities and Exchange Commission showing that it intends to pay CEO Roland Smith $46.78 million for 16 months of work if the deal goes through. The merger would entail the closure of up to 1,000 stores and the potential layoff of tens of thousands of workers.

The plant closures and layoffs came as figures from the Commerce Department confirmed that the US economy slowed significantly in the fourth quarter of last year. The economy grew at an annual rate of 2.2 percent in the final three months of 2014, down from an initial estimate of 2.6 percent released in January.

The fourth quarter marked a significant slowdown compared with the second quarter, in which the economy grew at a 5 percent rate, and the third quarter, which had a growth rate of 4.6 percent. Analysts had expected the economy to grow at a 2.4 percent annual rate in the final quarter of last year.

Business investment on equipment in the fourth quarter was revised downward to show a 0.6 percent increase, down from a previously reported 0.9 percent. Reuters reported that the slowdown in investment likely reflected “the impact of the strong dollar and lower crude oil prices, which have caused a drop in drilling and exploration activity.”

Government spending contracted at a rate of 1.9 percent, led by cuts to federal spending.

Even the anemic pace of economic growth in the last quarter of 2014 was significantly higher than what is expected in the first quarter of this year, which ends next week. Economists from JPMorgan Chase, Macroeconomic Advisers and Goldman Sachs recently cut their estimates for first-quarter economic growth, all of them forecasting a rate of 1.4 percent to 1.5 percent. The Federal Reserve Bank of Atlanta is predicting even worse results, with a first-quarter GDP growth rate of just 0.2 percent.

A number of recently released economic figures underscore this gloomy outlook. The Commerce Department said Wednesday that orders for durable goods fell by 1.4 percent in February compared with a month earlier. The report also showed that non-defense capital goods orders fell for the sixth straight week.

The University of Michigan’s survey of consumer sentiment fell to 93.0 in March, down from 95.4 in February. Richard Curtin, chief economist at the University of Michigan’s Surveys of Consumers, told the Wall Street Journal that, “most of the recent variation was among lower-income households, whose budgets are more sensitive to higher utility costs and disruptions in work hours.”

The significant appreciation of the dollar, which hit 0.95 euros earlier this month, up from 0.75 euros a year ago, has had a negative impact on the US trade balance and US corporate earnings.

Corporate profits fell 1.4 percent in the previous quarter, according to figures released by the Commerce Department on Friday. For the whole of 2014, corporate profits were down by 0.8 percent, the first annual fall in US corporate profits since 2008.

US corporations have responded to the appreciation of the dollar and falling profits with the demand that the Federal Reserve delay its plans to begin raising interest rates this year. Last week, Fed Chairwoman Janet Yellen hinted that the US central bank might begin raising rates later than it had previously indicated, and the Fed issued interest rate projections for 2015 and beyond showing a slower pace of rate hikes than previously predicted once the increases begin.

Yellen reinforced this message in remarks at the Federal Reserve Bank of San Francisco on Friday, declaring that she expected the “level of the federal funds rate to be normalized only gradually” and warning of raising rates “too quickly.”

The continued influx of cash from the Federal Reserve has led the Dow Jones Industrial Average to nearly triple over the course of the past six years, while allowing Wall Street bonuses to hit the highest levels since 2008. Average CEO pay in the US is higher than ever.

The response of the corporate-financial aristocracy to the renewed slowdown in the US economy will no doubt be an intensification of the policies that have characterized official economic policy since the 2008 crash: virtually unlimited amounts of cash for the financial markets coupled with a relentless offensive against the jobs, wages and living standards of working people.

Behind the US jobs report: Low wages and persistent mass unemployment

By Gabriel Black
March 8, 2015
World Socialist Web Site

 

The US economy created 295,000 new jobs in February, according to a Bureau of Labor Statistics (BLS) report released Friday. The percentage of the population officially unemployed shrank by 0.2 percentage points to 5.5 percent.

The report sent tremors throughout Wall Street, with the Dow Jones Industrial Average falling 1.5 percent. Investors fear that any slacking of the jobs crisis could lead the Federal Reserve to scale back on its policy of ultra-low interest rates that has formed the basis of financial speculation in recent years.

Media outlets have celebrated the jobs report as a sign of the US economy’s growing strength. However, some have been confused with the question, voiced by the New York Times, “So Why Aren’t Wages Rising More?”

Behind the headline figures of February’s report lie two underreported facts. First, the fall in the official unemployment rate is largely fictional. Second, new jobs are concentrated in lower-paying sectors, while the overall wages of workers throughout the economy are under sustained attack.

While February was the 60th straight month of job growth in the private sector, it was also the 11th straight month in a row that the labor participation rate—a more accurate measure of unemployment—remained below 63 percent. The figure fell 0.1 percentage points to 62.8 in February, the lowest level since 1978. The contrast between the extremely low labor participation rate and the ostensibly recovering official unemployment rate arises from the fact that millions of unaccounted laborers in the official statistics cannot find suitable work.

Indeed, more than two-thirds of the drop in the jobless rate was due to workers leaving the workforce, not workers finding jobs. In February the number of people reported as being unemployed shrank by 274,000. Of those, 178,000 left the work force and 96,000 gained jobs.

According to the Economic Policy Institute (EPI), there were 5,970,000 unemployed workers missing from the official statistics in this month’s job report. Were they to be added to the unemployment rate, it would stand at 9 percent. These missing workers “are people who would be either working or looking for work if job opportunities were significantly stronger.” The EPI notes that more than half of these missing workers are in their prime age of working, between the ages of 25 and 54.

There are several signs that the jobs market is entering a renewed downturn. The number of Americans who filed new claims for unemployment benefits rose sharply last week, by 7,000, to a seasonally adjusted 320,000.

Meanwhile, Challenger, Gray & Christmas, the consultancy firm that tracks mass layoffs, reported yesterday that US employers announced 103,620 planned layoffs in the first two months of 2015, up nearly 20 percent from the same period last year.

As for wages, they remained stagnant for non-supervisory and production workers, the bulk of the workforce. Wages for all workers rose slightly, by $0.03.

One commentator on National Public Radio noted, “We’re adding most of our jobs at or slightly above minimum wage, and as long as that’s the case, you’re not going to get a whole lot of upward pressure on wages.”

A report released last April by the National Employment Law Project, “The Low-Wage Recovery,” found that unlike previous recessions and post-recession recoveries, the current “recovery” has been dominated by low-wage growth. The authors wrote, “We find that low-wage job creation was not simply a characteristic of the first phase of the recovery, but rather a pattern that has persisted for more than four years now. Deep into the recovery, job growth is still heavily concentrated in lower-wage industries.”

The largest industry to gain workers in February was in “food services and drinking places,” which saw 59,000 new jobs, or about a fifth of all gains. Professional and business services increased by 51,000 jobs, retail by 31,000, construction by 29,000 and health care by 24,000. Part-time workers stood unchanged at 6.6 million people.

The Obama administration’s “recovery,” characterized by high stock prices for the rich, stagnating or declining wages for the majority, and long-term unemployment, is not a policy accident. Starting with the bailout of the auto companies, which cut in half the wages for new hires, the administration has led the charge in “wage restructuring” and “downsizing” in order to make American workers more easily exploitable. Meanwhile, the bailout of the banks and Federal Reserve’s quantitative easing program have ensured record profits and stock prices for the super-rich.

US economy in deflation and slump

By Andre Damon
February 28, 2015
World Socialist Web Site

 

Stock Market DropThe US Commerce Department said Friday that Gross Domestic Product, the broadest measure of economic output, grew by only 2.2 percent in the fourth quarter of last year, down from an earlier estimate of 2.6 percent and a sharp fall from earlier quarters.

This followed the announcement by the Labor Department on Thursday that consumer prices fell by 0.7 percent, the largest fall since December 2008. Over the past 12 months, prices have fallen by 0.1 percent, the first annual deflation figure posted since October 2009.

These figures belie official claims that the US is an economically healthy counterbalance to the overall slump and deflation that now encompasses most of the world. In fact, US economic growth, hampered by an enormous impoverishment of the working class in the years following the financial crisis, remains far below pervious historical averages.

On Tuesday, Standard and Poor’s said that it’s Case-Shiller Index showed that home prices grew by 4.6 percent over the past year, the slowest housing price increase since 2011. “The housing recovery is faltering,” David Blitzer, chairman of the index committee at S&P Dow Jones, told the Los Angeles Times. “Before the recession, anytime housing starts were at their current level… the economy was in a recession.”

Meanwhile the number of people in the US newly filing for jobless benefits jumped by 31,000 to 313,000 last week, in the largest increase since December 2013, reflecting a series of mass layoffs and business closures announced this month.

On February 4, office supply retailer Staples announced plans to buy its rival Office Depot, which would result in the closure of up to a thousand stores and tens of thousands of layoffs. The next day, electronics retailer RadioShack filed for bankruptcy, saying it plans to close up to 3,500 stores.

Mass layoffs have also been announced at online marketplace eBay, credit card company American Express, the oilfield services companies Schlumberger and Baker Hughes, as well as the retailers J.C. Penney and Macy’s.

These disastrous economic developments come even as the Dow Jones Industrial Average hit an all-time record of 18,140 on Wednesday, though it retreated slightly later in the week. Worldwide, the FTSE All-World Index is near its highest level in history.

The rise in global stock indices reflects the satisfaction of global financial markets with the pledge by the Syriza-led Greek government to impose austerity measures dictated by the EU, as well as indications by Federal Reserve Chairwoman Janet Yellen in congressional testimony this week that the US central bank is likely to delay raising the federal funds rate in response to recent negative economic figures.

The US federal funds rate has been at essentially zero since the beginning of 2009. Together with the central bank’s multi-trillion-dollar “quantitative easing” program, this has helped to inflate a massive stock market bubble that has seen the NASDAQ triple in value since 2009.

This enormous growth in asset values has taken place despite the relatively depressed state of the US economy, which grew at an annual rate of 2.4 percent in 2014. During the entire economic “recovery” since 2010, the US economy has grown at an average rate of 2.2 percent. By comparison, the US economy grew at an average rate of 3.2 percent in the 1990s and 4.2 percent in the 1950s.

The ongoing stock market bubble has led to a vast enrichment of the financial elite: the number of billionaires in the US has nearly doubled since 2009. The financial oligarchy, however, has not used its ever-growing wealth for productive investment, as shown by the decline in business spending in in the fourth quarter of last year. Instead, it has either hoarded it or used it to buy real estate, art and luxury goods.

On Thursday, Bloomberg reported that global sales of “ultra-premium” vehicles, costing $100,000 or more, surged by 154 percent, compared with a 36 percent increase in global vehicle sales overall. The report noted, “Rolls-Royce registrations have risen almost five-fold. Almost 10,000 new Bentleys cruised onto the streets last year, a 122 percent increase over 2009, while Lamborghini rode a 50 percent increase to pass the 2,000 vehicle mark.”

Meanwhile, the number of people in poverty in the US remains at record levels. In January, the Southern Education Foundation reported that, for the first time in at least half a century, low-income children make up the majority of students enrolled in American public schools.

To the extent that jobs are being created in the US, they are largely part-time, contingent and low-wage, replacing higher-wage jobs eliminated during the 2008 crash. A report published last year by the National Employment Law Project found that while American companies have added 1.85 million low-wage jobs since 2009, they have eliminated 1.83 million medium-wage and high-wage jobs.

Earlier this month, Jim Clifton, head of the Gallup polling agency, denounced claims that the US unemployment rate has returned to “normal” levels. “There’s no other way to say this,” he wrote. “The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.”

“Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. Right now, the US is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older.”

Clifton added, “I hear all the time that ‘unemployment is greatly reduced, but the people aren’t feeling it.’ When the media, talking heads, the White House and Wall Street start reporting the truth—the percent of Americans in good jobs; jobs that are full time and real—then we will quit wondering why Americans aren’t ‘feeling’ something that doesn’t remotely reflect the reality in their lives.”

The Death Of The American Dream In 22 Numbers

By Michael Snyder
January 31, 2015
Washington’s Blog

 

Abandoned HomeWe are the generation that gets to witness the end of the American Dream.  The numbers that you are about to see tell a story.  They tell a story of a once mighty economy that is dying.  For decades, the rest of the planet has regarded the United States as “the land of opportunity” where almost anyone can be successful if they are willing to work hard.  And when I was growing up, it seemed like almost everyone was living the American Dream.  I lived on a “middle class” street and I went to a school where it seemed like almost everyone was middle class.  When I was in high school, it was very rare to ever hear of a parent that was unemployed, and virtually every family that I knew had a comfortable home and more than one nice vehicle.  But now that has all changed.  The “American Dream” has been transformed into a very twisted game of musical chairs.  With each passing year, more people are falling out of the middle class, and most of the rest of us are scrambling really hard to keep our own places.  Something has gone horribly wrong, and yet Americans are very deeply divided when it comes to finding answers to our problems.  We love to point fingers and argue with one another, and meanwhile things just continue to get even worse.  The following are 22 numbers that are very strong evidence of the death of the American Dream…

#1 The Obama administration tells us that 8.69 million Americans are “officially unemployed” and that 92.90 million Americans are considered to be “not in the labor force”.  That means that more than 101 million U.S. adults do not have a job right now.

#2 One recent survey discovered that 55 percent of Americans believe that the American Dream either never existed or that it no longer exists.

#3 Considering the fact that Obama is in the White House, it is somewhat surprising that 55 percent of all Republicans still believe in the American Dream, but only 33 percent of all Democrats do.

#4 After adjusting for inflation, median household income has fallen by nearly $5,000 since 2007.

#5 After adjusting for inflation, “the median wealth figure for middle-income families” fell from $78,000 in 1983 to $63,800 in 2013.

#6 At this point, 59 percent of Americans believe that “the American dream has become impossible for most people to achieve”.

#7 In 1967, 53 percent of Americans were considered to be “middle income”.  But today, only 43 percent of Americans are.

#8 For each of the past six years, more businesses have closed in the United States than have opened.  Prior to 2008, this had never happened before in all of U.S. history.

#9 According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

#10 According to one recent report, 43 million Americans currently have unpaid medical debt on their credit reports.

#11 Traditionally, owning a home has been one of the key indicators that you belong to the middle class.  Unfortunately, the rate of homeownership in the U.S. has now been falling for seven years in a row.

#12 According to a survey that was conducted last year, 52 percent of all Americans cannot even afford the house that they are living in right now.

#13 While Barack Obama has been in the White House, the number of Americans on food stamps has gone from 32 million to 46 million.

#14 The number of Americans on food stamps has now exceeded the 46 million mark for 38 months in a row.

#15 Right now, more than one out of every five children in the United States is on food stamps.

#16 According to a Washington Post article published just recently, more than 50 percent of the children in U.S. public schools now come from low income homes.  This is the first time that this has happened in at least 50 years.

#17 According to the Census Bureau, 65 percent of all children in the United States are living in a home that receives some form of aid from the federal government.

#18 In 2008, 53 percent of all Americans considered themselves to be “middle class”.  But by 2014, only 44 percent of all Americans still considered themselves to be “middle class”.

#19 In 2008, 25 percent of all Americans in the 18 to 29-year-old age bracket considered themselves to be “lower class”.  But in 2014, an astounding 49 percent of all Americans in that age range considered themselves to be “lower class”.

#20 It is hard to believe, but an astounding 53 percent of all American workers make less than $30,000 a year.

#21 According to one recent survey, 62 percent of all Americans are currently living paycheck to paycheck.

#22 According to CNN, the typical American family can only “replace 21 days of income with readily accessible funds”.

The key to the recovery of the middle class is jobs.

The truth is that without middle class jobs, it is impossible to have a middle class.

Unfortunately, more middle class jobs are being offshored, are being replaced by technology, or are being lost to a slowing economy every single day.  The competition for the jobs that remain is incredibly intense.  Just consider the following example

In 2012, Eric Auld, an unemployed 26-year-old with a master’s degree in English, decided to find out what was on the other side of the black hole. He created a fake job ad as an experiment:

Administrative Assistant needed for busy Midtown office. Hours are Monday through Friday, nine to five. Job duties include: filing, copying, answering phones, sending e-mails, greeting clients, scheduling appointments. Previous experience in an office setting preferred, but will train the right candidate. This is a full-time position with health benefits. Please e-mail résumé if interested. Compensation: $12-$13 per hour.

If you have ever applied for a job like that, I offer my condolences. You have better odds at the casino. Auld received 653 responses in 24 hours. 10% of the applicants had more than 10 years of experience, and 3% of them had master’s degrees. Presumably, one of them would get the job. But what does that mean? It means that all the other experienced applicants and master’s degree holders would remain unemployed. That is about 64 experienced workers and about 19 workers with master’s degrees.

So how can we get this turned around?

How can we start to increase the number of middle class jobs in America once again?

Please feel free to share your solution by posting a comment below…

Jobless toll continues to rise in Australia

By Mike Head
December 13, 2014
World Socialist Web Site

 
Unemployment is increasing relentlessly in Australia, even according to the vastly understated official statistics. During November, the seasonally adjusted jobless rate, released by the Australian Bureau of Statistics (ABS) on Thursday, rose from 6.2 to 6.3 percent, continuing a worsening trend since April 2012.

By this measure, the unemployment rate has risen from 4.9 percent to 6.3 percent over the past 30 months, taking the number of jobless workers who are actively seeking work from 598,200 to 777,700—a jump of 179,500 or 30 percent.

There are now about five times as many unemployed workers as the number of unfilled newspaper and online job advertisements across the country. Young people, in particular, are bearing the brunt of the worsening toll. Youth unemployment rose to 14.5 percent.

Even though the number of jobs increased by 42,600 during November, this was not enough to keep pace with the number of young people joining the hunt for work. And 95 percent of the new jobs were part-time, pointing to deteriorating employment conditions. The aggregate monthly hours worked actually dropped by 4.4 million hours, or 0.3 percent.

This trend was also apparent in the ABS’s quarterly “underemployment” figures. They estimated that the proportion of workers who are employed but looking for more work rose to 8.6 percent for the November quarter. Combined with its unemployment rate, the ABS calculates that 15 percent of working-age Australians are receiving less paid work than they would like, up 0.6 percent on the previous quarter.

At 6.3 percent, the official unemployment rate is now markedly higher than the peak of 5.9 percent during the first phase of the global financial crisis in 2008-09. It also exceeds the 6.25 percent predicted in the Abbott government’s May budget as the top figure for the year.

The biggest jumps occurred in the former mining boom state of Queensland, where the rate is now at an 11-year high of 6.9 percent, and in Victoria, once the country’s most industrialised state, where the figure rose to a 25-year high of 6.8 percent.

The ABS jobless data excludes anyone employed more than an hour a week. Alternative estimates produced by the Roy Morgan polling company indicate that the unemployment rate jumped from 9.1 to 10 percent in November, and the underemployment rate grew from 9.3 to 9.7 percent, so that a total of 19.7 percent of the labour force wants work, or more work.

Even these statistics provide only a limited indication of the sharp reversal taking place within the economy. Australian capitalism was initially able to withstand the impact of the 2008 global financial breakdown, largely on the back of Chinese economic growth, which was sustained by massive stimulus measures.

Now, however, slowdowns in China, Japan and Europe are causing precipitous falls in prices for Australia’s primary export commodities—iron ore, coal and liquefied natural gas. This is on top of the collapse of the mining investment boom and the destruction of entire sections of basic industry.

Neither the ABS nor the Morgan statistics indicate the levels of joblessness that lie ahead as mining and mining-related companies engage in further waves of retrenchments and the three remaining car makers, Ford, GM Holden and Toyota, progressively shut down their operations by 2017.

Some financial market analysts tried to play down the latest ABS figures, pointing to the overall growth in the number of jobs. But HSBC chief economist Paul Bloxham commented that the economy had only added an average of 13,000 jobs a month over the past six months. “That is not enough to keep up with population growth,” he warned.

This week, the National Australia Bank increased its prediction for this year’s peak unemployment rate from 6.25 to 6.75 percent, and lowered its economic growth forecast for the current financial year from 2.9 to 2.5 percent. The bank’s month survey of more than 400 firms showed falls in business conditions and business confidence during November.

Consumer confidence is falling even more, according to the monthly Westpac bank-Melbourne Institute survey. Westpac’s confidence index dropped 5.7 points to 91.1 between November and December, making it the 10th consecutive monthly fall and the worst result since the European sovereign debt crisis in late 2011. Reflecting the rising number of job cuts, 96 percent of respondents were pessimistic about the labour market, and 87 percent regarded economic conditions as unfavourable.

The survey was taken during the first week of December, when official figures showed the Australian economy fell into an income recession, with national income dropping for the second consecutive quarter.

Bill Evans, Westpac’s chief economist, labelled the survey results “very disturbing.” He urged the Reserve Bank of Australia to cut official interest rates, which have already been reduced to a record low of 2.5 percent for the past 15 months. Evans claimed this would encourage business borrowing, but 95 percent of bank lending is currently going into the inflated property market.

The survey results flew in the face of Treasurer Joe Hockey’s claim, made last week, that Australia was “seeing improvements in consumer confidence and business confidence,” and his desperate attempt to boost consumer spending by urging people to “go out there and spend for Christmas, not just for Santa Claus but for Australia.”

The plunging export commodity prices are also cutting billions of dollars off federal tax revenues and those of the states, especially resource-dependent Queensland and Western Australia, and this is placing increasing pressure on Prime Minister Tony Abbott’s government.

Yesterday’s Australian editorial lashed the government for “diluting” its scheme to impose fees to see doctors, and insisted that it must find ways to reduce spending on health, education and welfare, despite the “spectacular and severe” “revolt” against the budget.

Hockey is due to deliver a “mini budget”—the Mid-Year Economic and Fiscal Outlook—on Monday. The government faces escalating demands from the financial and corporate elite to overcome the public hostility to the key budget measures to slash social spending that remain stalled in the Senate.

 

 

‘Hunger in Britain more shocking than in Africa’

By Press TV
December 8, 2014

 

A British pastor has called for more government action against the UK’s hunger crisis.

Stephen Sizer, pastor of the Christ Church of England, has told Press TV’s UK Desk that “the government needs to do more, but I suggest that needs to be done at the local level, where people live by those who have responsibility for them, local government, local council.”

Sizer also pointed to the underlying economic issues such as joblessness, noting that “the challenge is that in a climate of high unemployment and an economy that is not growing, an increasing number of people are finding themselves unable to cope and require assistance; hence the growth in the food banks.”

He also praised the food banks as “an amazing and a very compassionate way in which local communities can care for their poor, as a church we support our local food bank with staff and with weekly supplies.”

His comments come on the heels of an article by the Archbishop of Canterbury, Justin Welby on The Daily Mail, where the top priest criticized the country’s hunger crisis as worse than that of Africa.

Welby spoke of seeing a family in a UK food bank, where “they were ashamed to be there. The dad talked miserably. He said they had each been skipping a day’s meals once a week in order to have more for the child, but then they needed new tyres for the car so they could get to work at night, and just could not make ends meet. So they had to come to a food bank.”

Press TV’s UK Desk contacted the press office of the Archbishop of Canterbury for further insight into the situation, but received the answer that “he is not intending to do any media interviews following the publication of the report.” by British media outlets.

RSH/GHN

 

Youth in Australia worse off than their parents

By Zac Hambides
December 3, 2014
World Socialist Web Site

 

Australian flag continentalCompared to their parents at a similar age, young people in Australia today confront higher unemployment, larger debts, more insecure work and soaring housing costs. This is the picture presented in the “Renewing Australia’s Promise” report released last month by the Foundation for Young Australians (FYA).

The report’s compilation of data from government and academic papers and an FYA survey demonstrates that the generation of young people currently aged 18–29 years will become the first in Australia, at least since World War II, to have a lower standard of living than their parents.

While median weekly earnings for young people have risen by 6.8 percent, after adjusting for inflation, since 1985, the FYA report reveals that the cost of housing has far outstripped any apparent rise in wages. In the mid-1980s, house prices were 3.2 times average income. Today they are 6.5 times, with most working-class youth priced out of owning a home.

With a near six-fold increase in the price index of established houses since 1985, young people who are able to try to buy a home have to set aside 80 percent more of their disposable income for interest payments on home loans than their parents did.

Rental accommodation costs have also soared, forcing more youth to continue living with their parents. According to the Australian Bureau of Statistics (ABS), the rental price index, which is calculated as part of the Consumer Price Index, has increased by 58.1 percent since 2003.

The FYA survey found that just 22 percent, or about one in five, 18–29 year-olds think their standard of living will be better than their parents.

The job prospects for youth today are among the worst on record. According to the FYA, young people are three-and-a-half times more likely to be unemployed than their parents and three times more likely to work in part-time or casual jobs. In 1985, 16 percent were employed in part-time work. Today that figure stands at 44 percent. Combined rates for unemployment and under-employment (those unable to find sufficient work) among youth is now almost 30 percent, compared to under 20 percent in 1985. On average, young people currently remain unemployed for five months.

These figures provide only a partial idea of the real levels of youth unemployment, particularly in working-class suburbs and rural areas.

A Brotherhood of St Lawrence report released in February this year, citing January ABS figures, revealed that the official youth unemployment rate was at Depression-era levels in some areas. The highest rates were recorded at 21 percent in west and northwest Tasmania, followed by Cairns (20.5 percent) in northern Queensland and the northern suburbs of Adelaide (19.7 percent). These figures understate jobless levels because they count a person doing one hour of work a week as employed.

According to recent ABS figures, overall national youth unemployment in October 2014 was 13.8 percent, the highest in 16 years. At the same time the participation rate has remained at a record low of around 66.5 percent since last December. What this indicates is that more young people have given up looking for work under conditions of the decreasing availability of full-time employment.

The youth unemployment crisis is forcing many young people to participate in unpaid “work trials” in a desperate attempt to gain employment “experience” and possibly paid employment in the future. Young workers are also used against older workers, who are being pressured to take lower wages or risk losing their job.

Although youth today are 1.6 times more likely to complete secondary school and 1.4 times more likely to have a degree, more than one-fifth will not use their degree in their job. On average, they will graduate from university with a student debt of almost $24,000, compared with nearly $8,000 in 1991. Labor and Liberal-National governments have increased student fees every year since the Hawke Labor government introduced the Higher Education Loan Scheme (HECS) in 1989. This year, fees ranged from $6,000 to over $10,000 a year and are set to rise even further if the Abbott Coalition government pushes through the deregulation of student fees.

Increasing university fees and the rising cost of rent, study supplies and basic day-to-day necessities, are forcing thousands of students into low-paid, menial work. According to a July 2013 ABS report, more than half of students aged 15-24 years were working in 2012, with 56 percent depending on this work as their primary source of income. The report revealed that the median wage of students was only $331 a week. According to benchmarks drawn up by the Melbourne Institute of Applied Economic and Social Research, the poverty line for a single person including housing costs is $509.53.

While the FYA report and the official ABS figures reveal the bleak situation facing thousands of youth throughout Australia, these conditions will worsen in the coming period. The Abbott government’s May budget, which deepens the social assault began by the previous Labor government, specifically targets unemployed youth.

If the budget measures finally pass the Senate, pay levels for the “Youth Allowance” and “Newstart” unemployment payments will be frozen for three years and the age of qualification for “Newstart” payments increased from 22 to 25 years. Both are well below the poverty line. “Newstart” recipients receive $515.60 a fortnight, while those on “Youth Allowance” receive just $414.40. All those under 30 who cannot find work or who lose their job face being forced to wait for six months before receiving any payments and then must comply with work-for-the-dole schemes in order to qualify for their payments.

These measures are driven by the demands of the corporate elites, who are determined to make workers and youth pay for the escalating global financial crisis. The fact that the young people today face social conditions far worse than their parents is another damning indictment of the capitalist profit system.