Tag Archives: Unemployment

As Illegal Immigration Declines, Employers Forced to Raise Wages, by Joe Guzzardi

If you believe that illegal immigration has declined in the US, which can’t be definitively established, then that decline may have something to do with rising wages at the bottom of the income ladder. From Joe Guzzardi at progressivesforimmigration reform.org:

A new Center for Migration Studies (CMS) report showed that between 2010 and 2016, illegal immigration declined 8 percent, down from 11.7 million to 10.8 million, its lowest level in 15 years. The illegal immigrant population is always in flux, and some refer to think tanks’ totals as guesstimates. But after analyzing United States and Mexican government statistics, Pew Research came to the same conclusion as CMS. During the period studied, CMS researched six of the top ten states in which illegal immigrants reside – Illinois, North Carolina, California, New York, Arizona and Georgia – and noted that they had at least 10 percent declines.

A major contributor to the illegal immigrant population drop-off is that, according to CMS senior visiting fellow Robert Warren, migrants are returning home in ever-larger numbers. In 1990, about 200,000 left the United States each year; the most recent data showed that the totals departing are 500,000 to 600,000 annually. Debunking a long-held theory that illegal immigrants never leave the U.S., Warren called that notion “false,” and said that “one out of three immigrants leave” after having “worked for a number of years….”

If employed illegal immigrants leave the U.S., then by extension, the jobs they once held become available, and American workers could fill the vacancies. Evidence that Americans, especially minorities, are in fact re-entering the labor force is abundant, and that the pay scale has increased correspondingly.

The monthly jobs report from the National Federation of Independent Businesses found that employee compensation is at a 30-year high. Twenty-two percent of owners identified locating qualified employees as their biggest problem – a greater headache than taxes or government regulations. Accordingly, a net 24 percent anticipate raising worker compensation, and a net 31 percent reported they’ve increased compensation to attract or retain employees, the highest level since December 2000.

Workers employed in specific industries like clothing manufacturing and food preparation have been among the immediate beneficiaries of reduced job competition. CNN reported that, based on the Bureau of Labor Statistics January data, clothing manufacturing wages increased 14 percent over prior months.

To continue reading: As Illegal Immigration Declines, Employers Forced to Raise Wages

 

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Why 3.5 million Americans in their prime years aren’t working — and no, it’s not video games, by Jeffry Bartash

This is an exploration of the causes of so many Americans in the prime working years not working. The causes are varied and complex. From Jeffry Bartash at marketwatch.com: 

Luke Sharett/Bloomberg
Millions of Americans who would have been working 20 years ago no longer do so because of vast changes in the U.S. and global economies.

The sizzling U.S. labor market has knocked the unemployment rate down to a 17-year low, but millions of Americans in their prime who would have been working back then do not have jobs now.

How come? China, robots, disability benefits, minimum wages and jail-time are the biggest culprits, according to a pair of researchers at the University of Maryland.

The percentage of the U.S. population with jobs sank from a record 64.7% in 2000 to a 28-year low of 58.2% by 2011 before beginning a gradual recovery. The brunt of the decline occurred during the 2007-2009 recession, but the problem had been long in the making.

“These worrisome developments were exacerbated by the Great Recession, but their roots preceded its onset,” wrote economists Katharine Abraham and Melissa Kearney at the University of Maryland in a new report. Abraham is a former commissioner of the Bureau of Labor Statistics.

The problem is still acute among young people and even Americans in their prime working years of 25 to 54, especially men.

Surprisingly it’s not the case for older people nearing retirement age. The share of those ages 55 to 64 actually rose until just very recently.

 Whatever the case, the impact on the economy is profound.

If men and women from the ages 25 to 54 took part in the labor market at the same rates as they did in 1999, another 3.5 million Americans could either be at work today or looking for jobs. That would be more fuel for the U.S. economy and a bigger source of workers for businesses crying out about a shortage of labor.

A Critical Thinking Person Might Ask, by Jim Quinn

Spend too much time reading the Happy Days Are Here Again hosannas and then looking at actual real world numbers, and you’re sure to come away with a case of cognitive dissonance. From Jim Quinn at theburningplatform.com:

I know some people don’t like charts, but I think they tell stories. The two charts below tell a story the mainstream media, Trump, Wall Street, and the Deep State don’t want revealed. The first chart shows the year over year percentage change in personal income taxes collected by the Federal government and the second chart shows the year over year percentage change in corporate income taxes collected by the Federal government.

The government drones can’t seasonally adjust, massage, or fake these numbers like they can inflation and unemployment.

A critical thinking person might ask, how can the unemployment rate have fallen to levels last seen in 2007 if personal income taxes collected has been essentially flat for the last two years? The last time unemployment was supposedly this low, the Feds were collecting taxes at a 12% to 18% annual rate over the prior year. Either the BLS is lying about the unemployment rate or the jobs being added are nothing but low paying shit jobs.

A critical thinking person might ask, if the stock market is at record highs because the economy is doing so well and corporations are rolling in dough, why have corporate taxes collected by the Federal government declined for the last three years? Corporate taxes collected have declined because corporate profits are lower than they were three years ago. Have you heard that fact on CNBC? The market isn’t being driven by corporate profits, but just massive levels of Fed created debt, recklessly low interest rates, and a false narrative being spun by Wall Street, their media mouthpieces and even Trump.

To continue reading: A Critical Thinking Person Might Ask

“Or We’ll Lose the Whole Middle Class”: Gallup CEO, by Wolf Richter

Regular readers of SLL know the economic recovery, such as it has been, is faltering and may be over. From Wolf Richter at wolfstreet.com:

Jim Clifton, Chairman and CEO at Gallup, who presides over endless surveys of American consumers and businesses and knows a thing or two about them, has a message for the media and the political establishment that seem to be clueless: this meme about the recovering economy – “It was even trumpeted on Page 1 of The New York Times and Financial Times last week,” he says – “I don’t think it’s true.”

In an article posted on Gallup’s website, he made his case:

The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61% average between 2000 and 2008 to 51% today.

Ten percent of 250 million adults in the U.S. is 25 million people whose economic lives have crashed.

What the media is missing is that these 25 million people are invisible in the widely reported 4.9% official U.S. unemployment rate.

Let’s say someone has a good middle-class job that pays $65,000 a year. That job goes away in a changing, disrupted world, and his new full-time job pays $14 per hour — or about $28,000 per year. That devastated American remains counted as “full-time employed” because he still has full-time work — although with drastically reduced pay and benefits. He has fallen out of the middle class and is invisible in current reporting.

And these “Invisible Americans,” as he calls them, are facing the “disastrous” emotional toll often associated with a sharp loss of household income. It hits “self-esteem and dignity,” and produces an “environment of desperation.” Even many American with good jobs and incomes are just “one degree” away from the misery of those with falling wages, or the underemployed or unemployed.

Clifton names three metrics that “need to be turned around or we’ll lose the whole middle class”:

1. According to the U.S. Bureau of Labor Statistics, the percentage of the total U.S. adult population that has a full-time job has been hovering around 48% since 2010 — this is the lowest full-time employment level since 1983.

2. The number of publicly listed companies trading on U.S. exchanges has been cut almost in half in the past 20 years — from about 7,300 to 3,700. Because firms can’t grow organically — that is, build more business from new and existing customers — they give up and pay high prices to acquire their competitors, thus drastically shrinking the number of U.S. public companies. This seriously contributes to the massive loss of U.S. middle-class jobs.

3. New business startups are at historical lows. Americans have stopped starting businesses. And the businesses that do start are growing at historically slow rates.

“Free enterprise is in free fall — but it is fixable,” he says. It all depends on small businesses. They need to thrive again. They’re “our best hope” for the economy to pick up some speed. And once they’re thriving again, they can “restore the middle class”:

Gallup finds that small businesses — startups plus “shootups,” those that grow big — are the engine of new economic energy. According to the U.S. Small Business Administration, 65% of all new jobs are created by small businesses, not large ones.

To continue reading: “Or We’ll Lose the Whole Middle Class”: Gallup CEO

Wall Street Monkeyshines—— Look Ma, No Hands! by David Stockman

David Stockman performs his invaluable monthly service: he dopes out unemployment, using a much better indicator, and adds a critique of the economy in general. From Stockman at davidstockmanscontracorner.com:

The boys and girls on Wall Street are now riding their bikes with no hands and eyes wide shut. That’s the only way to explain Friday’s lunatic buying spree in response to another jobs report that proves exactly nothing about an allegedly resurgent economy.

When the S&P 500 first hit 2130 back in May 2015, reported LTM earnings were $99.25 per share, and that was already down 6.4% from the cyclical high of $106 per share in September 2014. Thus, stocks were being valued at a nosebleed 21.5X in the face of falling earnings.

During the four quarters since then, reported LTM earnings have slumped by a further 12.3% to $87 per share. So that brings the “cap rate” to 24.5X earnings that have shrunk by 18% over the last six quarters. Wee!

You have to use the parenthetical because the casino is not capitalizing anything rational. It’s just drifting higher in daredevil fashion until something big and nasty stops it.

That something would be global deflation and US recession. Both are racing down the pike at accelerating speed.

Needless to say, when these lethal economic forces finally hit home, the puppy pile-up on Wall Street is going to be one bloody mess. But that’s the price you pay when you have destroyed honest price discovery entirely, and have transformed the money and capital markets into robo-machine driven venues of rank speculation.

Janet Yellen and the other 100 clowns who run the world’s central banks, of course, have no clue as to the financial doomsday machine they have enabled. Indeed, they apparently think efficient pricing and allocation of capital doesn’t matter.

After all, their entire modus operandi is to peg the price of money, bonds and the yield curve sharply below market-clearing levels—–so that households and business will borrow and spend more than otherwise.

Likewise, they aim to goose stock prices to ever higher levels. That’s so the top 10% and the top 1%, who own the preponderant share of equities, will feel the wealth(effects) and then spend-up and invest-up a storm.

But the economic gods created market-based price discovery for a reason. It was to insure that in the great arena of financial market supply and demand, the forces of fear and greed would contend on a level playing field. Short-sellers and contrarians heading south were to intercept the lemmings of greed heading north before they reached the edge of the cliff.

Now there is nothing but cliff. Central bankers have euthanized the short-sellers and empowered the lemmings of greed with free money to fund every manner of speculation while gifting them with cheap downside hedging insurance.

There is an awful price to be paid for one-way markets, however. The latter never correct; they crash.

And the suddenness, unexpectedness, and violence of these episodic crashes slam the main street economy with gale force. That confidence shock, in turn, cancels out the gains that the resilient forces of capitalism have eked out since the previous crash, thereby causing trend rates of gain in real output and wealth to fade toward the flat-line and even below.

In short, by enabling the casino to fly blind monetary central planning functions as the enemy of capitalist prosperity. The gambling ethos it implants in the financial markets degrades analysis and dumbs-down incoming economic and financial information to the point of uselessness.

To continue reading: Wall Street Monkeyshines—— Look Ma, No Hands!

 

Job Cuts Pile up, by Wolf Richter

From Wolf Richter at wolfstreet.com:

And it’s reaching far beyond energy.

Turning points in the vast US labor market rarely come with a big drumroll that no one can miss. Instead, they wedge themselves into the rosy scenario bit by bit, here and there, posing contradictions where none are expected. And today, we got one of those contradictions: unemployment claims v. job-cut announcements.

The number of people who applied for unemployment insurance during the week of March 20 to 26 rose by 11,000 to 276,000, the Labor Department reported today. While up, these initial claims are still near the low of 253,000 established on March 5, which had been the lowest level since the late 1960s!

So even at 276,000, initial unemployment claims are still very low by historical standards. Red flags go up when claims jump well above 300,000. Serious fretting begins when claims hit 400,000. That’s a sign that laid-off people can’t find new jobs and are filing for unemployment insurance to tide them over. It’s a sign that layoffs by one company can no longer be absorbed by other companies.

Companies have already started laying off people. The announcements and rumors bubble up on a daily basis. And today, the Challenger Job Cut Report confirms it in a chilling way.

In March, job cuts announced by the largest US-based companies soared 31.7% year-over-year to 48,207. The fourth month in a row of year-over-year increases. Up 40% from March 2014.

Job-cut announcements in the first quarter jumped to 184,920, up 32% from 2015, and up 52% from 2014.

These are not minor increases. And they only include the largest US-based companies that announce layoffs to the media. They do not include smaller companies that might be trimming their payrolls quietly.

In Q1, about 50,000 job-cut announcements, or 27% of the total, were “attributed to falling oil prices,” as the report put it. That includes companies such as manufacturers that supply the oil sector. Last year in Q1, “oil-related” job cuts had reached 47,610, or 34% of the total.

This shows that the oil sector is still shedding jobs manically, but other sectors have now jumped into the fray in significant numbers. As the report put it: This “upward trend outside of the energy sector is somewhat worrisome.”

To continue reading: Job Cuts Pile up

Mineworkers’ protests shake Chinese leaders, by Dikang

Political and social upheaval go hand-in-hand with economic contraction. Things are heating up in China. From Dikang at chinaworker.info:

Thousands of coal miners in the far northeast of China have been on strike for six days, demanding that China’s rulers – the so-called Communist Party dictatorship (CCP) – “give us back our money!”

The protests, captured in dramatic video footage that is banned inside China, have shaken the Chinese regime during the very week when its ceremonial National People’s Congress (NPC) has been meeting in Beijing. A key discussion at the NPC has been about how the regime will cut the workforce in state-owned industries, with widely cited reports of 5-6 million redundancies, equivalent to one in six state sector jobs. The striking mineworkers of Heilongjiang province, a region already devastated by closures and layoffs, have given a courageous and resounding answer to these plans.

The mineworkers’ protests began on Wednesday 9 March in the city of Shuangyashan. Longmay Group, the largest state-owned coal producer in northeastern China, operates 10 mines in Shuangyashan and over 40 across the province as a whole. Last September, Longmay announced 100,000 job cuts – 40 percent of its entire workforce. According to some reports 22,500 redundancies have already been implemented. The company also owes a total of 800 million yuan (US$123 million) in unpaid wages dating from 2014. There have been earlier protests to demand payment of wage arrears by Longmay workers around Heilongjiang, including in the city of Hegang one year ago. The strike in Shuangyashan did not materialise from nowhere in other words, but is akin to a match being dropped into a large pool of gasoline.

“What the Shuangyashan incident has exposed is just a tip of the iceberg. It has been pretty endemic (workers not getting paid),” a rights activist from Heilongjiang told the Voice of America website.

In China, workers do not have their own trade unions. The only legal union organisation is the government-controlled ACFTU, which invariably sides with management against the workers. In the case of Longmay, the ACFTU has been invisible and played no role in supporting the workers’ protests.

To continue reading: Mineworkers’ protests shake Chinese leaders