Tag Archives: Unemployment

Thanks to the Fed, You’ll Work More This Year to Keep Last Year’s Standard of Living, by Ryan McMaken

Do you have that running-in-place feeling? Having trouble making that last pay check stretch to the next payday? You’re not alone. From Ryan McMaken at mises.org:

According to the establishment survey of employment, released last week by the Bureau of Labor Statistics, total employment increased, month over month, by 263,000 jobs. The job market stays strong,” reads one CNBC headline, and the new jobs print was hailed as a great achievement of the Biden administration by MSNBC pundit Steve Benen.

Yet the employment data is possibly the only data that looks good right now, and that’s not much comfort, since employment is a lagging indicator of the economy’s direction. In fact, if we look beyond the employment survey, what we find is an economy where real earnings are falling, savings are falling, and more people are taking on second jobs to make ends meet.

The first indicator of this is the fact that while total jobs have shown some relatively strong growth, the total number of employed persons has been nearly flat for months, and only last month (September 2022) did it finally return to precovid levels. In fact, the jobs recovery in employed persons took thirty-two months to return to the previous peak. The fabled “V-shaped recovery” promised by advocates of covid lockdowns never materialized. Had there been a V-shaped recovery, employed persons would have recovered to previous peaks by mid-2021. It ended up taking about eighteen months longer than that.

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The Power of Labor: Record Churn & Quits among Workers as Employers Desperate to Fill Huge Number of Job Openings, by Wolf Richter

Workers should be in the driver’s seat as far as negotiating wages and benefits go. From Wolf Richter at wolfstreet.com:

Millions of people are still watching this spectacle from the sidelines.

Widespread labor shortages have caused companies to offer higher wages, sign-on bonuses, improved benefits, schedules, and hours. This has the effect that people who already have jobs switch jobs to better their situation. The company that lost the employee now has a job opening and needs to compete in the job market with higher pay, etc.  It’s this type of arbitrage by workers in a hot job market that causes wage increases to spread – and employers have raised wages by the most in 20 years – amid record churn.

The number of people who quit jobs voluntarily to work for another company, or to stay home and take care of the kids, or to spend more time with their cryptos, or whatever, spiked by another 164,000 people to a record of 4.43 million in September.

Nearly all of these “quits” (95%) occurred with private sector employers, where quits spiked to 4.22 million, up by 29% from September 2019, which had also been a hot job market. The year 2019 had already seen the highest quits rate in the data going back to 2000. But since March, the power balance between labor and employer, driven by labor shortages, has changed dramatically.

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Where the Hell did the Workforce Go? by Gen Z Conservative

A lot of the workforce put on its pajamas, grabbed a beer or a glass of wine, went back to bed, turned on the tube, and decided to let the rest of us support them. From Gen Z Conservative at genzconservative.com:

A record 4.3 million Americans quit their jobs in August as retail, bar, and restaurant industries saw the largest surge in employees who left their positions since the 1970s, according to the Bureau of Labor Statistics report released Tuesday.

Almost three percent of the workforce left their jobs in August, a jump of 242,000 from July’s figure, according to a Bureau of Labor Statistics (BLS). Experts believe the jump from July’s record-setting number is at least partly due to workers seeking a better deal. Given the 10.4 million jobs open in the U.S., workers see an opportunity to get more convenient hours, better pay, or working conditions.

“This really elevated rate of people quitting their job is a sign that workers have lots of confidence and they have relatively stronger bargaining positions than they’ve had in the past,” Nick Bunker, an economist at Indeed.com said Monday. “There’s a lot of demand, and people are seizing that opportunity and quitting their jobs.”

Chris Markowski, the host of the podcast The Watchdog On Wallstreet, told America’s Conservative Voice (ACV) Wednesday that the record number of “quits” ― a business euphemism for people who leave their jobs ― is attributed to the number of benefits being paid to workers, keeping them out of the workforce.

“Nobody wants to work, it’s everywhere,” Markowski told ACV. “No one has any workers. The government basically started universal basic income when they send child care tax to individuals.”

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These Dangers Loom Over The Fragile US Economy In The Next 12 Months, by Tyler Durden

It’s like watching a slow motion train wreck. From Brandon Smith at alt-market.us

This article was written by Brandon Smith and originally published at Birch Gold Group

The U.S. and most of the world is at the threshold of what I would call a nexus point in history. There are establishment forces at play that seek to impose a permanent authoritarian presence within our nation in the name of Covid “safety.” This includes lockdown mandates and restrictions on economic participation for the unvaccinated (including being unable to keep a job).

At the same time, only 53% of the public has been fully vaccinated against Covid. A significant number of the unvaccinated seem likely to dig in their heels and will refuse to comply.

We are at an impasse. With incessant fear mongering over the latest covid variants and the government obsession with 100% vaccination, the pro- and anti-vaccine groups are squaring off .  It is a conflict between those who see their submission to the vaccination as a badge of personal responsibility and civic-mindedness versus those who see it as merely an excuse for authoritarianism. Unless pro-vax people choose to stand down and walk away from the fight, our economic future will grow increasingly unstable.

This is the foreboding backdrop of our economic tale, and it is important to keep in mind that the technocratic exploitation of the covid non-crisis as a push for supremacy is going to color EVERYTHING that happens in our financial system from now on. You cannot talk about our economic condition without including the effects of the pandemic theater.

I believe that the next year in particular is going to be adrenalized and chaotic beyond what we have already seen in 2020-2021. Like I said, there are two sides of America that are now completely opposed in almost every way. Something is going to snap, and I suspect this will happen in 12 months or less.

The U.S. economy is itself an underlying disaster in the making and in many ways the Covid issue is a convenient distraction away from a much larger threat.

Let’s not forget that since the credit crash of 2007-2008 America and most other nations have been surviving on pure monetary deferment. That is to say, not a single problem unmasked in 2008 has been dealt with or solved by the central bankers in the 13 years since. All of the destructive factors were delayed by money printing rather than being fixed. Writing a new post-dated check to cover your last check only works as long as your creditor is willing to cooperate…

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The Extra $300/Week Unemployment Benefits Encouraged Many to Not Work: Details about the “Labor Shortage” Pile Up, by Wolf Richter

Whatever happened to the endlessly repeated bromide that nobody wanted to draw welfare and unemployment, and everyone so doing would take a job if any were available. The Covid affair has blown that one sky high. From Wolf Richter at wolfstreet.com:

Business owners and hiring managers have known this in their gut for months.

In the 27 states that have ended the extra $300 a week in federal unemployment benefits, paid on top of the regular state unemployment insurance, people are returning to work at a much faster rate than in states where the extra $300 a week are still being paid: this was further confirmed today by the unemployment insurance (UI) data from the Labor Department.

At the end of June, Texas and Florida joined the group of states that ended the extra $300 a week (the Enders). These states are still paying the regular state unemployment benefits; only the federal top-off $300 a week was ended. Since the end of June, the combined “continued claims” (the number of people having claimed unemployment insurance for more than a week) of the 27 Enders dropped by 25%.

Over the same period, the continued claims by the states that kept the extra $300 a week (the Keepers) dropped by only 11%. In other words, continued UI over just those weeks since the end of June dropped over twice as fast in states that had ended the extra benefits:

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Amid Clamoring of “Labor Shortages” as 13 Million People Claim Unemployment Benefits, Job Openings Spike Sky-High. Sector by Sector, by Wolf Richter

There are a lot of job openings for anyone who would rather work than collect money from the taxpayers via the government. From Wolf Richter at wolfstreet.com:

And many people quit their job to take a better job with higher starting wage & signing bonus, offered by desperate employers.

All the evidence – data and anecdotal – has been pointing at the same weird phenomenon: Employers are facing a “labor shortage,” even as 13 million people still claim some form of state or federal unemployment compensation, because millions of people who used to work and who could work, cannot work now or still do not want to work at the pay and benefit packages offered.

So here is another piece of this phenomenon: A record spike in unfilled job openings, along with a large number of people who quit an old job to take on a new job, incentivized by aggressive hiring efforts, such as raised wages, hiring bonuses, incentives, and better benefits.

Total unfilled job openings spiked by 590,000 in June to 10.1 million openings, seasonally adjusted, and to 10.3 million not seasonally adjusted, blowing out all prior records, up by 42% from June 2019, according to the JOLTS report by the Bureau of Labor Statistics today:

Faced with difficulties in filling open positions, employers are engaging in aggressive hiring efforts that include increased starting wages, hiring bonuses, other bonuses, better benefits, etc.  – and there have been reports to this effect all over the place, from small companies to major employers such as Walmart and Goldman Sachs.

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Paying people NOT to work causes Economic Inactivity [Letter from Great Britain – 06-26-21], by Austrian Peter

Keep the government from interfering in the labor market and downward wage rigidity and contrived worker scarcity would be gone in a heartbeat. From Austrian Peter at theburningplatform.com:

BUT until we get on to unemployment I have a SURPRISE observation and before we get to the meat of my Letter, here is the entrée: My grandchildren and 90% of their generation have become captured by an NHS ‘App’ which acts as a jailer’s anchor bracelet corralling them into an electronic cage, sans freedom of movement. OK – I might be a crotchety old man and out-of-touch with TECH and what’s going on in Britain generally – but this is ridiculous!

Apparently they download the ‘NHS App’ which warns them if they have been close to a ‘sick’ Covidian and then they have to isolate themselves in their homes for 10 days until the App says they can come out into the world again!  I am amazed that this is done entirely voluntarily, without question, and without malice aforethought – ‘staggering’ is not strong enough to describe this captured prisoner syndrome – they can’t see that they are enslaved into the UK biosecurity state, never to know freedom that, for me, is a natural human right.

Yes, the world in 2021 has definitely lost its moorings and is now spinning off into social hyperspace leaving me on my island of ignorance, happy indeed not to be part of this contrived drama.  “See the happy moron, he doesn’t give a damn.  I wish I was a moron, my God! Perhaps I am?”

I can now see what the ruling elite are doing – they have captured Millennials, Gen Z and some of Gen X; us free-thinking Boomers will be gone soon and then the Great Reset will come into its own.  Thank God I won’t be here to see a virtual concentration camp ruled by Nazis who really never lost WW2 and hear them weaving their nefarious plans to take over the world – it looks like they are indeed winning.

You have to know there is a prison if you are to understand you are a prisoner.

FIRST – My pseudonym is ‘Austrian Peter’ – NOT because I am Austrian, far from it – but because I subscribe to Austrian economics theory which I cover in Chapter 11 of my book.  For me this ‘philosophy’, or ‘religion’ as my friend Gerry prefers to call it, neatly counters the failed theories of John Maynard Keynes Investopedia Lord Keynes  which our Masters of the Financial Universe have been using ever since WW2.

The British-Austrian economist William Harold Hutt identified Keynes’s theory of unemployment equilibrium as the most novel and original aspect of his work. Henry Hazlitt’s second law is the observation that everything in Keynes’s General Theory is either unoriginal or untrue. From Hazlitt we know that the unemployment equilibrium doctrine is untrue.

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“There Are Absolutely No Job Seekers”: How Trillions In Stimulus Sparked A Historic Job Market Crisis, by Tyler Durden

Has the response to Covid-19 created a class of permanent, unemployable, couch potatoes? From Tyler Durden at zerohedge.com:

Something odd is going on in the US economy.

On one hand, in the aftermath of the covid pandemic there are millions and millions of former workers who have lost their jobs and are unable to return as their job may not even exist today (while their skills atrophy and they become increasingly unemployable with every day they are unemployed). Addressing this, on Thursday Fed Chair Powell spoke at an IMF panel saying that over nine million Americans remains out of work, while a quick look at the latest BLS data shows that there are over 100 million Americans who are out of the labor force (of whom just 6.85MM want a job currently, and a record 94 million don’t want a job).

At the same time, as we pointed out last night, JPMorgan and many others have noted that when one looks at the recent JOLTS data, which showed a near record number of job openings, a clear trend is emerging: there is a big labor shortage in the US, one which could (finally) lead to higher wages in the US.

While JPMorgan did not dwell on what may be causing this unprecedented schism within the economy – after all, for normalcy to return, people must not only be employed but must want to be employed – it did suggest that the “robust” government stimulus may be keeping workers on the sidelines, a more detailed analysis from Bloomberg confirms the nightmare scenario: the trillions in Biden stimulus are now incentivizing potential workers not to seek gainful employment, but to sit back and collect the next stimmy check for doing absolutely nothing in what is becoming the world’s greatest “under the radar” experiment in Universal Basic Income.

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More California cities experiment with “hero pay” leading to predictable results, by Jazz Shaw

A business can’t afford to pay its workers more than they are worth to the business. From Jazz Shaw at hotair.com:

Back in early February, we looked at a story out of Long Beach, California where the City Council passed an ordinance requiring large, chain grocery stores to provide workers with an extra four dollars per hour as “hero pay” during the pandemic. That immediately resulted in two of the biggest Kroger stores in the area closing their doors permanently, putting hundreds of people out of work. At the time, I noted that a number of other large municipalities in the Golden State were either already drafting or considering similar legislation. But having seen what happened in Long Beach, they thankfully had sufficient warning not to make the same mistake.

Or so you would have thought. But as it turns out, you’d have been wrong. Los Angeles plunged ahead and passed the same type of law, only they upped the ante and made it five dollars per hour. Try not to faint from shock when I tell you that three more Kroger stores shut down in short order. If only someone could have somehow foreseen this and avoided all of these closures. (Washington Examiner)

Why Not Make the Minimum Wage $150 Per Hour? by PF Whalen

A real humanitarian would say why not $10,000 an hour, but we’ll start with PF Whalen’s modest proposal. From PF Whalen at bluestateconservative.com:

The periodic debate regarding raising the minimum wage has resurfaced once again, only this time the argument is connected to the larger discussion surrounding a sprawling, $1.9 trillion COVID relief bill; for some inexplicable reason. In the bill unveiled by House Democrats last Friday, if passed, the minimum wage would increase incrementally from the current $7.25 per hour to $9.50 per hour this year, and eventually escalate to $15 per hour by 2025. Prominent Democrats across the board have supported the idea, including President Joe Biden.

If we deep-dive the issue in trying to understand its full impact, we can learn a great deal about the pros and cons of increasing the minimum wage; particularly with the cons. But there are two pieces of information that are difficult to come by. How, specifically, did we arrive at the number of $15? And, based on the Democrats’ reluctance to acknowledge the negative impacts of a minimum wage increase, why don’t we just add a zero to the number and increase the minimum wage to $150 per hour?

Sen. Bernie Sanders (I-VT) was the first influential public figure to float the idea of a $15 minimum wage, having proposed the idea all the way back in 2015. Sanders’ plan pointed out his perceived benefits for those who are being paid the minimum wage. Beneficiaries would see an improved standard of living; the burden on taxpayers from food stamps and Medicaid would be reduced; and an increase in available income would spur economic growth. It sounds like a wonderful plan.

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