Should we be alarmed that the number of job cuts announced by large U.S. companies was 35 percent higher in April than it was in March? This is definitely a case where the trend is not our friend. According to Challenger, Gray & Christmas, U.S. firms announced 65,141 job cuts during April, which represented a massive 35 percent increase over the previous month. And so far this year overall, job cut announcements are running 24 percent higher than for the exact same period in 2015. Meanwhile, on Thursday we learned that initial claims for unemployment benefits shot up dramatically last week. In fact, the jump of 17,000 was the largest increase that we have seen in over a year. Of course the U.S. economy has been slowing down for quite a while now, and many have been wondering when we would begin to see that slowdown reflected in the employment numbers. Well, that day has now arrived.
At this point, U.S. firms are laying off people at a rate that we have not seen since the last financial crisis. Here is what Zero Hedge had to say about these latest numbers…
While one can debate the veracity of the BLS’ seasonally adjusted data, one thing is certain: when a company announces it will layoff thousands, it will. So for all those who suggest that all is well with the US jobs picture based on initial claims reports, here is the latest report from Challenger according to which the pace of downsizing increased in April jumped by 35% to 65,141 during the month of April, from the 48,207 layoff announcements in March.
Looking further back, in the first four months of 2016, employers have announced a total of 250,061 planned job cuts, up 24% from the 201,796 job cuts tracked during the same period a year ago. This represents the highest January-April total since 2009, when the opening four months of the year saw 695,100 job cuts in the aftermath of the biggest financial crisis in modern history.
So what is causing this?
Why are firms laying off so many people all of a sudden?
My readers are very well aware of the pain that the energy industry is experiencing at the moment, but surprisingly it was not the energy industry that announced the most job cuts in April…
Computer firms announced 16,923 job cuts during the month; the highest total among all industries. That total includes 12,000 from chipmaker Intel, which is shifting away from the traditional desktop and laptop market and toward the mobile market. To date, computer firms have announced 33,925 job cuts, up 262 percent from a year ago, when job cuts in the sector totaled just 9,368 through the first four months of the year.
Yes, the U.S. energy industry has lost well over 100,000 good paying jobs since the beginning of last year, but the downturn is so much broader than that. All over America corporate earnings are down, and when earnings fall it is inevitable that layoffs will follow.
As I have written about previously, earnings for companies listed on the S&P 500 have fallen a total of 18.5 percent from their peak in late 2014, and it was being projected that corporate earnings overall would be down 8.5 percent for the first quarter of 2016 compared to the same period a year ago.
And in the chart that I have posted below, you can see that corporate profits after tax have been falling precipitously since peaking in mid-2015…
As this new economic downturn intensifies, the layoffs will accelerate.
In plain English, that means that a whole lot more people will be losing their jobs.
Unfortunately, a very large percentage of Americans didn’t learn anything from the last crisis and are living on the financial edge. In fact, the Federal Reserve says that 47 percent of all Americans cannot even pay an unexpected $400 emergency room bill without borrowing the money or selling something.
So just like back in 2008, we are going to see huge numbers of people unable to pay their bills when they lose their jobs. Foreclosures are going to skyrocket, and lots and lots of families are going to be put out into the street.
This is why I have been preaching the importance of having an emergency fund for years. It is absolutely imperative to have an emergency fund that can cover your bills for at least six months in the event that there is a job loss or some other sort of major disaster strikes.
If you have not done this already, you are probably already too late.
The cold, hard reality of the matter is that it would take most families quite a while to save up a six month emergency fund if they are starting from zero.
So if you are in this position and you lose your job, you may have to move in with family or friends when your money runs out.
I don’t mean to be cold, but this is the situation that we are facing. The next employment crisis is already here, and it is going to get much, much worse. No matter who becomes “the next president”, job cuts are going to accelerate and good jobs are going to become exceedingly difficult to find.
I am certainly not advocating that anyone give up. If you still have a good job for the moment, tighten your belt and use this time to feverishly prepare the very best that you can.
Sadly, tens of millions of Americans believed that this bubble of false prosperity would keep on rolling, and so they wasted immense amounts of precious time and resources. Now the day of reckoning is here, and vast numbers of our fellow citizens are going to discover the horror of being unprepared.
If nobody is working in one out of every five U.S. families, then how in the world can the unemployment rate be close to 5 percent as the Obama administration keeps insisting? The truth, of course, is that the U.S. economy is in far worse condition than we are being told. Last week, I discussed the fact that the Federal Reserve has found that 47 percent of all Americans would not be able to come up with $400 for an unexpected visit to the emergency room without borrowing it or selling something. But Barack Obama and his minions never bring up that number. Nor do they ever bring up the fact that 20 percent of all families in America are completely unemployed. The following comes directly from the Bureau of Labor Statistics…
In 2015, the share of families with an employed member was 80.3 percent, up by 0.2 percentage point from 2014. The likelihood of having an employed family member rose in 2015 for Black families (from 76.4 percent to 77.7 percent) and for Hispanic families (from 85.9 percent to 86.4 percent). The likelihood for White and Asian families showed little or no change (80.1 percent and 88.6 percent, respectively).
For purposes of this study, families “are classified either as married-couple families or as families maintained by women or men without spouses present” and they include households without children as well as children under the age of 18.
Digging into the numbers, we find that there were a total of 81,410,000 families in America during the 2015 calendar year.
Of that total, 16,060,000 families did not have a single member employed.
So that means that in 19.7 percent of all families in the United States, nobody has a job.
And of course there are lots more families that are “partially employed”. In other words, maybe the wife has a job but the husband does not.
So based on these numbers, it would appear to me that the true rate of unemployment in this country is vastly higher than 5 percent, and John Williams of shadowstats.com agrees with me. According to his calculations, the broadest measure of unemployment in the U.S. would actually be sitting at 22.9 percent if honest numbers were being used.
But let’s not just focus on where we are.
Let’s take a look at where we are going.
According to Challenger, Gray & Christmas, job cut announcements by big companies in the United States were up 32 percent during the first quarter of 2016 compared to the first quarter of 2015, and it appears that the job losses are going to continue to mount as we roll into the second quarter. For instance, late last week Intel announced that it is going to be laying off 12,000 workers…
As it navigates its path into the future, Intel, the 47-year-old corporation best known for making microprocessor chips that power personal computers, has announced significant changes to its business.
On Tuesday, Intel’s CEO Brian Krzanich said in a letter to employees that the company over the next year will cut its 107,300-person global workforce by 12,000 people, or 11 percent.
Those are good middle class jobs, and they are exactly the kind of jobs that we cannot afford to be losing.
Meanwhile, the “retail apocalypse” appears to be accelerating once again.
Bloomberg is reporting that teen clothing chain Aeropostale is preparing to file for bankruptcy. Aeropostale currently operates more than 800 stores across the nation, and it is unclear if any of them will be able to stay open as this process plays out. But of course it isn’t just Aeropostale that has gone bankrupt lately. Here are a few more examples of major retailers that have recently filed for bankruptcy…
April 16, 2016: Vestis Retail Group, the operator of sporting goods retailers Eastern Mountain Sports (camping, hiking, skiing, adventure sports), Bob’s Stores (family clothing and shoes), and Sport Chalet (general sporting goods), filed for Chapter 11 bankruptcy. It will close all 56 stores and stop online sales.
In the filing, it blamed the going-out-of-business sales at “certain Sports Authority locations,” plus the weather, which had been too warm, and trouble with switching to a new software platform. It’s owned by private equity firm Versa Capital Management LLC.
April 7, 2016: Pacific Sunwear of California, clothing retailer with nearly 600 stores and derailed ambitions of skate-and-surf cool, filed for Chapter 11 bankruptcy. PE firm Golden Gate Capital, a lender to the company, agreed to convert over 65% of its loan into equity of the reorganized company and add another $20 million in financing. Wells Fargo agreed to provide $100 million of debtor-in-possession financing.
March 2, 2016: Sports Authority filed for Chapter 11 bankruptcy. It said it would close 140 of its 450 stores, including all stores in Texas.
Just because the stock market has been doing well in recent weeks does not mean that the crisis has passed.
In fact, many experts believe that the crisis of 2016 is just getting started. Albert Edwards of Societe Generale is one of them…
But what I do know is when in the last few weeks I have heard that Janet Yellen sees no bubble in the US, when Ben Bernanke hones and restates his helicopter money speech, and when Mario Draghi says that the ECB’s policy of printing money and negative interest rates was working, I feel utterly depressed (I could also quote similar nonsense from Japan, the UK and China). I have not one scintilla of doubt that these central bankers will destroy the enfeebled world economy with their clumsy interventions and that political chaos will be the ugly result. The only people who will benefit are not investors, but anarchists who will embrace with delight the resulting chaos these policies will bring!
All over the world, the underlying economic fundamentals continue to deteriorate. Here in the U.S., retail sales have been extremely disappointing, total business sales have been steadily falling, corporate revenues and corporate profits continue to plunge, and corporate debt defaults have soared to their highest level since the last financial crisis.
All of these numbers are screaming that a major economic downturn is here, and with each passing week things look even more ominous for the second half of 2016.
*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*
Did you know that when you take the number of working age Americans that are officially unemployed (8.2 million) and add that number to the number of working age Americans that are considered to be “not in the labor force” (94.3 million), that gives us a grand total of 102.5 million working age Americans that do not have a job right now? I have written about this before, but today I want to focus just on Americans that are in their prime working years. When you look at only Americans that are from age 25 to age 54, 23.2 percent of them are unemployed right now. The following analysis and chart come from the Weekly Standard…
Here’s a chart showing those in that age group currently employed (95.6 million) and those who aren’t (28.9 million):
“There are 124.5 million Americans in their prime working years (ages 25–54). Nearly one-quarter of this group—28.9 million people, or 23.2 percent of the total—is not currently employed. They either became so discouraged that they left the labor force entirely, or they are in the labor force but unemployed. This group of non-employed individuals is more than 3.5 million larger than before the recession began in 2007,” writes the Republican side of the Senate Budget Committee.
Clearly, we have never recovered from the impact of the last recession.
But let’s try to put these numbers in context.
Below, I would like to share two charts with you. They show what has happened to the inactivity rates for men and for women in their prime working years in the United States in recent years.
In order to be considered “inactive”, you can’t have a job and you can’t be looking for a job. So this subset of people is smaller than the group that we were talking about above. The 23.2 percent of Americans in their prime working years that are unemployed right now includes those that are looking for a job and those that are not looking for a job.
These next two charts do not include anyone that has a job or that is currently looking for a job. These charts only cover “inactive” people in their prime working years that are not considered to be in the labor force.
As you can see in this first chart, the inactivity rate for men in their prime working years exploded higher during the last recession and then continued to go up even after the recession supposedly ended. At this point, it is hovering near all-time record highs. Does this look like an “economic recovery” to you?…
For women, we see a similar thing. In this next chart, you can see that the inactivity rate for women in their prime working years rose during the last recession and then just kept on rising. At this point, it remains far higher than it was during the last recession…
What are we to make of all this?
For both men and women in their prime working years, the inactivity rate is significantly higher than it was during the last recession.
All of these people neither have a job nor are they looking for one.
So what in the world is going on here?
Are they independently wealthy?
Have these people found rich spouses to marry so they don’t have to work?
No, the truth is that the middle class in America is steadily eroding and poverty is absolutely exploding. Credit card debt has soared to a new record high, and 48 percent of all U.S. adults under the age of 30 believe that “the American Dream is dead”.
The issue isn’t that people don’t want to work.
The issue is that people cannot find enough work.
And even if you have a job, that does not mean that you are on easy street. According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.
Tens of millions of Americans are now among the ranks of “the working poor”. So many families are watching their expenses soar while their paychecks go down or stagnate. If you are in this situation right now, then you probably know how exceedingly stressful it can be.
Just look at what is happening to the cost of health insurance. The following comes from Fox News…
Health insurance premiums have increased faster than wages and inflation in recent years, rising an average of 28 percent from 2009 to 2014 despite the enactment of Obamacare, according to a report from Freedom Partners.
And I am not exactly sure where they got those numbers. Personally, I know that my health insurance rates have gone up far faster than that.
Two years ago, my health insurance company wanted to double the health insurance premiums for my family even though we never get sick. So I switched to another insurance company that offered a policy that was only about 30 percent higher than my last one. But then when it came time to renew, that insurance company wanted to raise my rate by another 50 percent.
Thanks to Obamacare, American families are being absolutely crippled by the cost of health care. And of course we are seeing the rising cost of living so many other places as well. Our paychecks are being squeezed harder and harder, and this is absolutely killing the middle class. In fact, the middle class in America is now a minority for the first time ever.
And now for the real bad news – this is about as good as things are ever going to get in this country. As you can see from what I have shared above, we never really had any sort of meaningful “economic recovery”, and now we have entered the early phases of the next major downturn.
So where do we go from here? Unfortunately, our debt-fueled prosperity has provided us with a massively inflated standard of living that is not even close to sustainable. As this bubble bursts, the economic pain is going to be absolutely unprecedented.
But it won’t be just economic pain that we are facing. In my new book, I detail the things that I believe that are coming to this country, and I explain why the entire planet will soon be facing incredibly challenging times. It is going to be one of the most controversial Christian books of 2016, because it directly challenges many of the things that are being taught in mainstream churches today. My book is an ominous message of warning and an inspiring message of hope, and I truly believe that it is the most important thing that I have ever written.
No matter how you may see the future, the key is that we all learn to love one another. The years ahead are going to be extremely challenging, and those that want to chase everyone else away and survive as lone wolves are going to have a very rough time. We all need each other, and those that have friends, family and communities around them are going to be in a much better position to weather the coming storms.
So let us hope for the best, but let us also prepare for the worst…
The federal government uses very carefully manipulated numbers to cover up the crushing economic depression that is going on in this nation. For the month of September, the federal government told us that 142,000 jobs were added to the economy. If that was actually true, that would barely be enough to keep up with population growth. Sadly, the truth is that the real numbers were actually far worse than that. The unadjusted numbers show that the U.S. economy actually lost 248,000 jobs in September and the government added more than a million Americans to the “not in the labor force” category. When I first saw that number I truly believed that it was inaccurate. But you can find the raw figures right here. According to the Obama administration, there are currently 7.9 million Americans that are “officially unemployed” and another 94.7 million working age Americans that are “not in the labor force”. That gives us a grand total of 102.6 million working age Americans that do not have a job right now.
That is not an economic recovery – that is an economic depression of an almost unbelievable magnitude.
This is something that my friend Mac Slavo pointed out the other day. I encourage you to read his analysis right here. If we measured unemployment the way that we did decades ago, we would all be talking about how similar Obama’s economy is to the Great Depression of the 1930s.
But instead we let the feds get away with feeding us this completely fraudulent “5.1 percent” unemployment number and most of us believe the mainstream media when they tell us that everything is just fine.
Well no, everything is not just fine. At this point, the labor force participation rate is the lowest that it has been since 1977. And the labor force participation rate for men is at the lowest level ever recorded. The only way that the federal government has been able to get the official unemployment rate to go down so much is by pretending that hundreds of thousands of Americans that have been unemployed for a very long time “leave the labor force” each month.
The chart posted below shows how our labor force participation rate has deteriorated since the year 2000. And in particular, the decline since Obama first entered the White House has been very striking. Does this look like a “healthy economy” to you?…
To me, the civilian employment-population ratio is a far more accurate measurement of the employment picture in America than the official unemployment rate is. Just prior to the last recession, approximately 63 percent of all working age Americans had a job. During that recession, that figure slipped below 59 percent and it stayed there for several years. Just recently it slipped back above 59 percent, but as you can see we are now falling once again…
The reason this number is falling is because lots of Americans have been losing jobs lately.
In fact, we are seeing layoffs at major firms at a level that we have not witnessed since 2009…
The jobs report today has been described as “ugly,” though it certainly didn’t, or shouldn’t have, come out of the blue: Layoffs in the energy, Big Tech, retail, and other sectors have recently mucked up our rosy scenario.
“The third quarter ended with a surge in job cuts,” is how Challenger Gray, which tracks these things, started out its report yesterday. In September, large US-based companies had announced 58,877 layoffs. In the third quarter, they announced 205,759 layoffs, the worst quarter since the 240,233 in the third quarter of 2009!
Year-to-date, we’re at nearly half a million job cut announcements (493,431 to be precise), up 36% from the same period last year.
Some of the companies that have recently announced layoffs include Wal-Mart, RadioShack, Delta, Sprint, ConAgra, Caterpillar, Bank of America, Halliburton, Qualcomm, Microsoft and Hewlett-Packard.
If you need to find a job or you plan to switch jobs in the near future, time is of the essence. Jobs are going to become much, much harder to find in the months ahead, and so every single day of job searching is absolutely critical at this point.
Right now, there are more than 100 million Americans that get some sort of assistance from the federal government every month. Government dependence is at a level that we have never seen before in U.S. history, and it is going to get a lot worse.
If we get to a point where the government is either unwilling or unable to take care of all of these people, we are going to have a massive societal problem on our hands. More than a third of the people living in our nation cannot independently take care of themselves, and more Americans are falling out of the middle class every single day. When the welfare state starts breaking down, the chaos that will ensue will be far worse than most people would dare to imagine.
So what do you think?
Are job losses and layoffs starting to happen in your area?
Please feel free to add to the discussion by posting a comment below…
Did you know that the percentage of children in the United States that are living in poverty is actually significantly higher than it was back in 2008? When I write about an “economic collapse”, most people think of a collapse of the financial markets. And without a doubt, one is coming very shortly, but let us not neglect the long-term economic collapse that is already happening all around us. In this article, I am going to share with you a bunch of charts and statistics that show that economic conditions are already substantially worse than they were during the last financial crisis in a whole bunch of different ways. Unfortunately, in our 48 hour news cycle world, a slow and steady decline does not produce many “sexy headlines”. Those of us that are news junkies (myself included) are always looking for things that will shock us. But if you stand back and take a broader view of things, what has been happening to the U.S. economy truly is quite shocking. The following are 12 ways that the U.S. economy is already in worse shape than it was during the depths of the last recession…
#1 Back in 2008, 18 percent of all Americans kids were living in poverty. This week, we learned that number has now risen to 22 percent…
There are nearly three million more children living in poverty today than during the recession, shocking new figures have revealed.
Nearly a quarter of youngsters in the US (22 percent) or around 16.1 million individuals, were classed as living below the poverty line in 2013.
This has soared from just 18 percent in 2008 – during the height of the economic crisis, the Casey Foundation’s 2015 Kids Count Data Book reported.
#2 In early 2008, the homeownership rate in the U.S. was hovering around 68 percent. Today, it has plunged below 64 percent. Incredibly, it has not been this low in more than 20 years. Just look at this chart – the homeownership rate has continued to plummet throughout Obama’s “economic recovery”…
#3 While Barack Obama has been in the White House, government dependence has skyrocketed to levels that we have never seen before. In 2008, the federal government was spending about 37 billion dollars a year on the federal food stamp program. Today, that number is above 74 billion dollars. If the economy truly is “recovering”, why is government dependence so much higher than it was during the last recession?
#4 On the chart below, you can see that the U.S. national debt was sitting at about 9 trillion dollars when we entered the last recession. Since that time, the debt of the federal government has doubled. We are on the exact same path that Greece has gone down, and what you are looking at below is a recipe for national economic suicide…
#5 During Obama’s “recovery”, real median household income has actually gone down quite a bit. Just prior to the last recession, it was above $54,000 per year, but now it has dropped to about $52,000 per year…
#6 Even though our incomes are stagnating, the cost of living just continues to rise steadily. This is especially true of basic things that we all purchase such as food. As I wrote about earlier this year, the price of ground beef in the United States has doubled since the last recession.
#7 In a healthy economy, lots of new businesses are opening and not that many are being forced to shut down. But 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.
#8 Barack Obama is constantly telling us about how unemployment is “going down”, but the truth is that the percentage of working age Americans that are either working or considered to be looking for work has steadily declined since the end of the last recession…
#9 Some have suggested that the decline in the labor force participation rate is due to large numbers of older people retiring. But the reality of the matter is that we have seen a spike in the inactivity rate for Americans in their prime working years. As you can see below, the percentage of males between the ages of 25 and 54 that aren’t working and that aren’t looking for work has surged to record highs since the end of the last recession…
#10 A big reason why we don’t have enough jobs for everyone is the fact that millions upon millions of good paying jobs have been shipped overseas. At the end of Barack Obama’s first year in office, our yearly trade deficit with China was 226 billion dollars. Last year, it was more than 343 billion dollars.
#11 Thanks to all of these factors, the middle class in America is dying. 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”.
When you take a look at our young people, the numbers become even more pronounced. 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”.
#12 This is something that I have covered before, but it bears repeating. The velocity of money is a very important indicator of the health of an economy. When an economy is functioning smoothly, people generally feel quite good about things and money flows freely through the system. I buy something from you, then you take that money and buy something from someone else, etc. But when an economy is in trouble, the velocity of money tends to go down. As you can see on the chart below, a drop in the velocity of money has been associated with every single recession since 1960. So why has the velocity of money continued to plummet since the end of the last recession?…
If you are waiting for an “economic collapse” to happen, you can stop waiting.
One is unfolding right now before our very eyes.
But what most people really mean when they ask about these things is that they are wondering when the next great financial crisis will happen. And as I discussed yesterday, things are lining up in textbook fashion for one to happen in our very near future.
Once the next great financial crisis does strike, all of the numbers that I just discussed above are going to get a whole lot worse.
So as bad as things are now, the truth is that this is just the beginning of the pain.
If you were laid off from your job, would you be willing to train your replacement if your company threatened to take away your severance pay if you didn’t do it? And how would you feel if your replacement came from India, and the only reason your company was replacing you was because the foreign worker was a lot less expensive? Sadly, this is happening all over America – especially in the information technology field. Huge corporations such as Disney and Southern California Edison are coldly firing existing tech workers and filling those jobs with much cheaper foreign replacements. They are doing this by blatantly abusing the H-1B temporary worker visa program. Workers that had been doing a solid job for decades are being replaced without any hesitation just because it will save those firms a little bit of money. There is very, very little loyalty left in corporate America today. Even if you have poured your heart and your soul into your company for years, that ultimately means very little. The moment that your usefulness is over, most firms will replace you in a heartbeat these days.
When I learned that Disney was doing this, I was absolutely outraged. Talk about a company that is going down the toilet. The following comes from the New York Times…
While families rode the Seven Dwarfs Mine Train and searched for Nemo on clamobiles in the theme parks, these workers monitored computers in industrial buildings nearby, making sure millions of Walt Disney World ticket sales, store purchases and hotel reservations went through without a hitch. Some were performing so well that they thought they had been called in for bonuses.
Instead, about 250 Disney employees were told in late October that they would be laid off. Many of their jobs were transferred to immigrants on temporary visas for highly skilled technical workers, who were brought in by an outsourcing firm based in India. Over the next three months, some Disney employees were required to train their replacements to do the jobs they had lost.
“I just couldn’t believe they could fly people in to sit at our desks and take over our jobs exactly,” said one former worker, an American in his 40s who remains unemployed since his last day at Disney on Jan. 30. “It was so humiliating to train somebody else to take over your job. I still can’t grasp it.”
Honestly, I don’t think that I could do it.
I don’t think that I could train my much cheaper foreign replacement.
But if you are the average American that is just barely scraping by from paycheck to paycheck, I guess complete and total humiliation is better than losing your home to foreclosure.
Out on the west coast, Southern California Edison did the exact same thing that Disney did. The following is an excerpt from a Fox News report…
Anonymous workers who were displaced by the visa holders also submitted written testimonials to lawmakers detailing their firings. Several claimed they were forced to train their replacements, and threatened with losing their severance if they did not.
“We had no choice in this,” one anonymous worker who claimed to have been one of those let go from Southern California Edison, said in a letter. The worker described how when the two vendors were picked – Infosys and TCS, both major Indian companies – SCE employees were told to “sit with, video chat or do whatever was needed to teach them our systems.”
If they did not cooperate, according to the testimonial, “we would be fired and not receive a severance package.”
That is wrong on so many levels. But this is what corporate America has become today – a cold, heartless place that has absolutely no empathy for the average worker.
These workers at Southern California Edison were even told that the firm “could replace one of us with three, four, or five Indian personnel” and still save money on the deal…
“They told us they could replace one of us with three, four, or five Indian personnel and still save money,” one laid-off Edison worker told me, recounting a group meeting with supervisors last year. “They said, ‘We can get four Indian guys for cheaper than the price of you.’ You could hear a pin drop in the room.”
The original intent of the H-1B temporary worker visa program was to allow U.S. companies to import foreign workers to do jobs that they were unable to fill with American workers.
But that is not what is happening.
Instead, the H-1B temporary worker visa program is being used to replace thousands upon thousands of well paid American workers.
It is a disgusting practice and it needs to stop. There has been so much outrage over this that it has even gotten the attention of the U.S. Senate. The following is from a letter that a bipartisan group of U.S. Senators sent to the Attorney General…
A number of U.S. employers, including some large, well-known, publicly-traded corporations, have reportedly laid off thousands of American workers and replaced them with H-1B visa holders. To add insult to injury, many of the replaced American employees report that they have been forced to train the foreign workers who are taking their jobs. This troubling practice seems to be particularly concentrated in the information technology (IT) sector, which is not surprising given that sixty five percent of H-1B petitions approved in FY 2014 were for workers in computer-related occupations. Though such reports of H-1B-driven layoffs have been circulating for years, their frequency seems to have increased dramatically in the past year alone.
So has anything been done about this?
Of course not.
Instead, Barack Obama is working on an extremely secretive global economic treaty which will reportedly allow far more foreign workers to come into this country and which will result in millions more good paying jobs being shipped overseas. It is called “The Trans-Pacific Partnership”, and it is basically NAFTA on steroids.
Why is it that Barack Obama has to be on the wrong side of every single issue?
The U.S. middle class is being systematically ripped to shreds, and most Americans are showing very little alarm about this.
How much damage has to be done before people will finally start waking up?
Did you know that 89 percent of all minimum wage workers in the United States are not teens? At this point, the average age of a minimum wage worker in this country is 36, and 56 percent of them are women. Millions upon millions of Americans are working as hard as they can (often that means two or three jobs), and yet despite all of their hard work they still find themselves mired in poverty. One of the big reasons for this is that we have created two classes of workers in the United States. “Full-time workers” are entitled to an array of benefits and protections by law that “part-time workers” do not get. And thanks to perverse incentives contained in Obamacare and other ridiculous laws, we have motivated employers to move as many workers from the “full-time” category to the “part-time” category as possible. It may be hard to believe, but right now only 44 percent of all U.S. adults are employed for 30 or more hours each week. But to get any kind of a job at all is a real challenge in many parts of the country today. As you read this article, there are more than 100 million working age Americans that are not employed in any capacity. And according to John Williams of shadowstats.com, if the federal government was actually using honest numbers the unemployment rate would be sitting at 23 percent. That is not an “employment recovery” – that is a national crisis.
The following infographic comes from the Economic Policy Institute. I certainly do not agree with a lot of the things that the Economic Policy Institute stands for, but I think that these numbers do accurately reflect what “part-time America” looks like today…
So what is the solution to this problem?
Most Democrats believe that raising the minimum wage would fix this. But as Zero Hedge has pointed out, it isn’t quite that simple…
Last week, we noted that Democratic lawmakers in the US are pushing for what they call “$12 by ’20” which, as the name implies, is an effort to raise the minimum wage to $12/hour over the course of the next five years. Republicans argue that if Democrats got their wish and the pay floor were increased by nearly 70%, it would do more harm than good for low-income Americans as the number of jobs that would be lost as a result of employers cutting back in the face of dramatically higher labor costs would offset the benefit that accrues to the workers who are lucky enough to keep their jobs.
Yes, raising the minimum wage would make life better for many minimum wage workers in America. But a large number of them would also lose their jobs completely, and a lot of small businesses would deeply suffer financially.
Ideally, what we would love to see happen is for the U.S. economy to be producing so many good jobs that the only people that are looking for entry-level part-time jobs would be teens, people just starting out in the workforce, etc. Back when I was a teen, I remember walking into a McDonald’s and getting hired on the spot because they were in dire need of workers. Sadly, those days are long, long gone.
Over the past several decades, millions of good paying American jobs have been shipped overseas, and millions more have been lost to advancing technology. And as I wrote about the other day, Barack Obama is deeply betraying American workers by working on a global economic treaty that would destroy millions more good paying jobs.
Thanks to the foolishness of our politicians, there is now intense competition even for minimum wage jobs at this point.
We keep hearing about an “employment recovery”, but it is a giant lie. Posted below is a chart of the civilian employment to population ratio. As you can see, the percentage of the working age population that is actually employed is much, much lower than it used to be…
In recent months, we have seen the employment-population ratio move slightly higher. But can this be called “an employment recovery”? Of course not. We are still way, way below the level that we were at just prior to the last recession, and now the next recession is just about upon us.
Meanwhile, the quality of our jobs continues to decline as more Americans are being pushed into “part-time work” with each passing year.
Since February of 2008, the size of the U.S. population has grown by 16.8 million people. But during that same time frame, the number of full-time jobs in this country has actually decreased.
And at this point, the majority of American workers simply do not make enough money to support a middle class family. The following income numbers come directly from the Social Security Administration…
-39 percent of American workers make less than $20,000 a year.
-52 percent of American workers make less than $30,000 a year.
-63 percent of American workers make less than $40,000 a year.
-72 percent of American workers make less than $50,000 a year.
Are you starting to see why I am so fired up about all of this?
We have developed a business culture in this country which does not care about workers. In business schools all over America, future executives are taught that a corporation only has one goal – to maximize wealth for the shareholders. Taking care of those that are part of your team is treated as an afterthought at best.
As corporations have gotten bigger, they have shown less and less concern for those that work for them. These days, employees are generally regarded as “expensive liabilities” that are to be discarded the moment that their usefulness has come to an end. And news of layoffs is often rewarded by Wall Street by a surge in the stock prices of the companies making those layoffs.
In the old days, more businesses in America were family-owned, and employees were often regarded as almost “part of the family”. Unfortunately, those days have disappeared forever.
Now, employees are treated like scum by many big companies, and if they don’t like how they are being treated they are told that they can leave. For example, just consider what was going on at a security company down in Florida…
Jose Molero worked as a site inspector for the company, which provides security for neighborhoods and companies across the country, for more than a year.
Molero says when he went to the Kensington Golf and Country Club guardhouse, he found wooden paddles on a desk, some with staff names on them and one reading “for staff discipline.”
He says there was also what is called a “Wall of Shame,” where the supervisor points out and posts reports that contain grammatical errors.
When Molero complained about these things to his district manager, he was told that if anyone was offended “maybe they shouldn’t work here”…
Molero contacted his operations manager, who told him to speak with the district manager. He says the district manager sent him an email response that said, “if that hurts their feelings then maybe they shouldn’t work here.”
Do you have a similar horror story to share?
Most of us do.
The U.S. economy is absolutely dominated by cold, heartless corporations that have no interest in listening to the little guy. If they could find a way to do it, many of them would operate with no low-level employees at all. And as technology continues to advance, they will replace as many of us as they can with robots, drones, machines and computers.
I’ll be honest with you – the future for workers in America looks really bleak. The competition for any jobs that can’t be shipped overseas or replaced by technology is going to become even more heated. This means that the middle class is going to get even smaller, the number of Americans dependent on the government is going to continue to explode, and the disparity between the wealthy and the poor is going to become even greater.
So what is the solution to this giant mess? Please feel free to tell us what you think by posting a comment below…
If you believe that ignorance is bliss, you might not want to read this article. I am going to dispel the notion that there has been any sort of “economic recovery”, and I am going to show that we are much worse off than we were just prior to the last economic crisis. If you go back to 2007, people were feeling really good about things. Houses were being flipped like crazy, the stock market was booming and unemployment was relatively low. But then the financial crisis of 2008 struck, and for a while it felt like the world was coming to an end. Of course it didn’t come to an end – it was just the first wave of our problems. The waves that come next are going to be the ones that really wipe us out. Unfortunately, because we have experienced a few years of relative stability, many Americans have become convinced that Barack Obama, Janet Yellen and the rest of the folks in Washington D.C. have fixed whatever problems caused the last crisis. Even though all of the numbers are screaming otherwise, there are millions upon millions of people out there that truly believe that everything is going to be okay somehow. We never seem to learn from the past, and when this next economic downturn strikes it is going to do an astonishing amount of damage because we are already in a significantly weakened state from the last one.
For each of the charts that I am about to share with you, I want you to focus on the last shaded gray bar on each chart which represents the last recession. As you will see, our economic problems are significantly worse than they were just before the financial crisis of 2008. That means that we are far less equipped to handle a major economic crisis than we were the last time.
#1 The National Debt
Just prior to the last recession, the U.S. national debt was a bit above 9 trillion dollars. Since that time, it has nearly doubled. So does that make us better off or worse off? The answer, of course, is obvious. And even though Barack Obama promises that “deficits are under control”, more than a trillion dollars was added to the national debt in fiscal year 2014. What we are doing to future generations by burdening them with so much debt is beyond criminal. And so what does Barack Obama want to do now? He wants to ramp up government spending and increase the debt even faster. This is something that I covered in my previous article entitled “Barack Obama Says That What America Really Needs Is Lots More Debt“.
#2 Total Debt
Over the past 40 years, the total amount of debt in the United States has skyrocketed to astronomical heights. We have become a “buy now, pay later” society with devastating consequences. Back in 1975, our total debt level was sitting at about 2.5 trillion dollars. Just prior to the last recession, it was sitting at about 50 trillion dollars, and today we are rapidly closing in on 60 trillion dollars.
#3 The Velocity Of Money
When an economy is healthy, money tends to change hands and circulate through the system quite rapidly. So it makes sense that the velocity of money fell dramatically during the last recession. But why has it kept going down since then?
#4 The Homeownership Rate
Were you aware that the rate of homeownership in the United States has fallen to a 20 year low? Traditionally, owning a home has been a sign that you belong to the middle class. And the last recession was really rough on the middle class, so it makes sense that the rate of homeownership declined during that time frame. But why has it continued to steadily decline ever since?
#5 The Employment Rate
Barack Obama loves to tell us how the unemployment rate is “going down”. But as I will explain later in this article, this decline is primarily based on accounting tricks. Posted below is a chart of the civilian employment-population ratio. Just prior to the last recession, approximately 63 percent of the working age population of the United States was employed. During the recession, this ratio fell to below 59 percent and it stayed there for several years. Just recently it has peeked back above 59 percent, but we are still very, very far from where we used to be, and now the next economic downturn is rapidly approaching.
#6 The Labor Force Participation Rate
So how can Obama get away with saying that the unemployment rate has gone down dramatically? Well, each month the government takes thousands upon thousands of long-term unemployed workers and decides that they have been unemployed for so long that they no longer qualify as “part of the labor force”. As a result, the “labor force participation rate” has fallen substantially since the end of the last recession…
#7 The Inactivity Rate For Men In Their Prime Working Years
If things are “getting better”, then why are so many men in their prime working years doing nothing at all? Just prior to the last recession, the inactivity rate for men in their prime working years was about 9 percent. Today it is just about 12 percent.
#8 Real Median Household Income
Not only is a smaller percentage of Americans employed today than compared to just prior to the last recession, the quality of our jobs has gone down as well. This is one of the factors which has resulted in a stunning decline of real median household income.
I have shared these next numbers before, but they bear repeating. In America today, most Americans do not make enough to support a middle class lifestyle on a single salary. The following figures come directly from the Social Security Administration…
-39 percent of American workers make less than $20,000 a year.
-52 percent of American workers make less than $30,000 a year.
-63 percent of American workers make less than $40,000 a year.
-72 percent of American workers make less than $50,000 a year.
We all know people that are working part-time jobs because that is all that they can find in this economy. As the quality of our jobs continues to deteriorate, the numbers above are going to become even more dismal.
Even as our incomes have stagnated, the cost of living just continues to rise steadily. For example, the cost of food and beverages has gone up nearly 50 percent just since the year 2000.
#10 Government Dependence
As the middle class shrinks and the number of Americans that cannot independently take care of themselves soars, dependence on the government is reaching unprecedented heights. For instance, the federal government is now spending about twice as much on food stamps as it was just prior to the last recession. How in the world can anyone dare to call this an “economic recovery”?
So you tell me – are things “getting better” or are they getting worse?
To me, it is crystal clear that we are in much worse condition than we were just prior to the last economic crisis.
And now things are setting up in textbook fashion for the next great economic crisis. Unfortunately, most Americans are totally clueless about what is going on and the vast majority are completely and totally unprepared for what is coming.
Or could it be possible that I am wrong? Whether you agree or disagree with me, please feel free to add to the discussion by posting a comment below…
On Friday, we learned that the official “unemployment rate” has fallen to 5.5 percent. Since an unemployment rate of 5 percent is considered to be “full employment” by many economists, many in the mainstream media took this as a sign that the U.S. economy has almost fully “recovered” since the last recession. In fact, according to the Wall Street Journal, some Federal Reserve officials believe that “the U.S. economy is already at full employment“. But how can this possibly be? It certainly does not square with reality. Personally, I know people that have been struggling with unemployment for years and that still cannot find a decent job. And I get emails from readers all the time that are heartbroken because they are suffering through extended periods of unemployment. So what in the world is going on? How can the government be telling us that we are nearly at “full employment” when so many people can’t find work? Could it be possible that the government numbers are misleading?
It is my contention that the official “unemployment rate” has become so politicized and so manipulated that it is essentially meaningless at this point. The following are 10 reasons why…
#1 Since February 2008, the size of the U.S. population has grown by 16.8 million people, but the number of full-time jobs has actually decreased by 140,000.
#2 The percentage of working age Americans that have a job right now is still about the same as it was during the depths of the last recession. Posted below is a chart that shows how the employment-population ratio has changed since the beginning of the decade. Does this look like a full-blown “employment recovery” to you?…
#3 The primary reason for the decline in the official “unemployment rate” is the fact that the government now considers millions upon millions of long-term unemployed workers to “no longer be in the labor force”. Just check out the following numbers…
The number of Americans participating in the labor force has been on a decline for the past few years. Nearly 33 percent of the Americans above age 16 are not part of the workforce, the highest number since 1978. The Bureau of Labor Statistics (BLS) report issued recently has found 92,898,000 Americans above age 16 not a part of the labor force of the country as on February 2015.
When President Obama took over the office in January 2009, nearly 80,529,000 Americans were not a part of the labor force. The number has increase by nearly 12 million over the last few years.
#4 Over the past couple of years, the labor force participation rate in this country has been hovering near mutli-decade lows…
The labor force participation rate hovered between 62.9 percent and 62.7 percent in the eleven months from April 2014 through February, and has been 62.9 percent or lower in 13 of the 17 months since October 2013.
Prior to that, the last time the rate was below 63 percent was 37 years ago, in March 1978 when it was 62.8 percent, the same rate it was in February.
#5 When you add the number of “officially unemployed” Americans (8.7 million) to the number of Americans “not in the labor force” (92.9 million), you get a grand total of 101.6 million working age Americans that do not have a job right now. Does that sound like “full employment” to you?
#6 The quality of our jobs continues to decline. Right now, only 44 percent of U.S. adults are employed for 30 or more hours each week.
#7 Millions upon millions of Americans have been forced to take part-time jobs because that is all they can find, and wages for American workers are at depressingly low levels. The following numbers come directly from the Social Security Administration…
-39 percent of American workers make less than $20,000 a year.
-52 percent of American workers make less than $30,000 a year.
-63 percent of American workers make less than $40,000 a year.
-72 percent of American workers make less than $50,000 a year.
#8 The average duration of unemployment for an unemployed worker is still about twice as long as it was just prior to the last recession.
#9 Most Americans feel as though the Obama administration has done little to nothing to help the middle class. Just consider the following poll numbers…
According to a new poll by the Pew Research Center, Americans see government policies under the Obama administration as having mostly benefited wealthy people, large corporations and financial institutions.
Seventy-two percent of respondents said government policies have done little or nothing to help the middle class, and 65 percent said they have done nothing to help the poor. Sixty-eight percent said the policies have done nothing to help small businesses.
Meanwhile, 45 percent said the policies have done a “great deal” to help large banks and financial institutions, 38 percent say they have helped large corporations, and 36 percent say they have helped the wealthy.
#10 If the unemployment rate was calculated honestly, we would all be talking about the horrific “unemployment crisis” that we were currently enduring. According to John Williams of shadowstats.com, the real unemployment rate in the United States right now is above 23 percent.
Our politicians and the mainstream media are attempting to convince us that everything is just fine.
But what they are telling us simply does not match the cold, hard reality on the streets.
And since the talking heads on television are proclaiming that we are nearly at “full employment”, that just makes millions upon millions of Americans that can’t seem to find work no matter how hard they try feel even worse than they already do.
If jobs are “easy to get”, then those that are chronically unemployment must have “something wrong” with them. That is the message that we are being given. If the mainstream media says that unemployment has gone way down, then anyone that is still unemployed must be really “lazy”, right?
When you are unemployed for an extended period of time, it can really suck the life right out of you. It can be really tempting to believe that you are viewed as a failure by your family and friends. And for the government to lie to us like this just makes things even harder.
If you are unemployed and can’t find a job right now, I want you to understand that you are caught in the midst of a long-term downward economic spiral which is going to get a lot worse.
When the government tells you that we are in a “recovery”, they are lying to you.
And when the government tells you that things are about to get a lot better, they are lying to you.
Everyone has times in their lives when they get knocked down.
The key is to always get back up and to never, ever stop fighting.
Yes, we are facing some really hard economic times. But that does not mean that your life is over. Never give up, and never give in to fear. Just do what you can with what you have today, and tomorrow get up and fight with everything that you have got.
The truth is that the best chapters of your life could be just around the corner.
Just don’t sit back and wait for the government to save you. If you are waiting for the government to save you, then you are going to be deeply disappointed.