The Beginning Of The End
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No Jobs

Everyone knows that the United States is bleeding jobs.  According to one new study, the private sector in the United States has lost 10.5 million jobs since 2007.  The U.S. economy lost 125,000 more jobs during the month of June.  Approximately a million frustrated American workers have simply dropped out of the employment market altogether over the past two months.  But the question not enough people are asking is why so many jobs are being lost.  Yes, the large global corporations have been sending millions of jobs overseas where labor is far, far cheaper.  And yes, the U.S. government has accumulated so much debt that it is absolutely suffocating the U.S. economy.  But there is another very important factor that has been largely overlooked.  Traditionally, about 75 percent of all new jobs are created by small businesses.  But today, hundreds of thousands of small businesses are being strangled out of existence by all of the oppressive taxes, fees, rules, regulations, paperwork and demands that government keeps imposing on them.  In such a repressive environment, it is getting close to impossible for small businesses to thrive, and if our small businesses can't succeed, then we simply are not going to see a lot of jobs being created.   

You see, the truth is that over the past several decades the game has become dramatically stacked in favor of large businesses.  Big corporations have the money to lobby Congress and other governmental institutions, they get almost all the tax breaks and they are the only ones who get bailouts.  They even "help" write legislation on the federal level. 

Many times large corporations will even lobby for more regulations for their own industry because they know that they can handle all of the rules and paperwork far easier than their smaller competitors can.  After all, a large corporation with an accounting department can easily handle filling out a few thousand more forms, but for a small business with only a handful of employees that kind of paperwork is a major logistical nightmare.

When it comes to hiring new employees, the federal government has made the process so complicated and so expensive for small businesses that it is hardly worth it anymore.  Things have gotten so bad that more small businesses than ever are only hiring part-time workers or independent contractors. 

So what we actually have now is a situation where small businesses have lots of incentives not to hire more workers, and if they really do need some extra help the rules make it much more profitable to do whatever you can to keep from bringing people on as full-time employees.    

Can the U.S. economy thrive in such an environment?

Of course not.

Small businesses are slowly being strangled out of existence.

Unless something changes quickly, small businesses are going to continue looking for ways to shed employees rather than hire them.

The U.S. government has become like the 500 pound fat guy who jumps on a horse and then gets angry when it won't move.

Passing even more ridiculous regulations and raising taxes even higher is not going to fix business in America.

The burdens we have placed on our small businesses have gotten worse under every single presidential administration of the past several decades.  Now our great economic machine has become so overburdened and so tired that it is simply refusing to move.

And this is not a short-term problem either.  Yes, we have lost a ton of jobs since the beginning of the "Great Recession", but our problems go back a lot farther than that.  The reality is that the U.S. population has grown by about 25 million people since they year 2000, and we needed to create millions upon millions of new jobs to support that increased population.  Instead, we have lost a total of 3 million jobs since 2000.

Needless to say, that is not a good trend.

There are simply not enough jobs for everyone.

Today, there are more than 5 unemployed Americans for every single job opening.

It is becoming harder and harder to find a job, and the number of Americans who are chronically unemployed is absolutely exploding.

In America today, the average time needed to find a job has risen to a record 35.2 weeks.

There are millions of Americans out there tonight who feel like punching the walls or drinking themselves under the table out of frustration because they can't find a job.

And many of those who are "chronically unemployed" are about to experience even more pain.

So far, the U.S. Senate has refused to extend long-term unemployment benefits for about 1.3 million Americans.  Without this assistance, these Americans and their families will be forced to survive on food stamps and whatever else they can scrape together.

The tent cities that are popping up all over the United States are about to get a lot more crowded.

So is there much hope that this is going to turn around any time soon?

Unfortunately, no.

Big corporations are not going to pay U.S. workers ten times more money than what they are paying employees in Malaysia, China or the Philippines just because they feel sorry for them.

Small businesses are not going to hire a lot more workers as long as things stay the way that they are.  In fact, many small businesses are going to continue to look for ways to cut employees.

The public sector is the one place that had been hiring more workers, but due to growing concern about exploding budget deficits, there isn't going to be a lot of additional hiring in the public sector either.

The truth is that there is not a lot of reason for optimism right now.  The U.S. economy is being battered by a host of economic problems, and with each passing week even more economists warn that we are likely headed for the second half of a double-dip recession.

So if you still have a job, be thankful.  If you don't have a job, you are probably going to have to get really creative. 

Times are tough and they are going to get even tougher.  But it is in the midst of challenging times that we find out who we really are.

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  • Something Wicked This Way Comes

    I have grown to really enjoy this blog ever since I stumbled across it.

    Unvarnished news is suppressed by the few remaining conglomerates with the exception of Fox. We are fed a diet of watered down BS filtered by executives/editors who don’t want to face the wrath of Obama and his minions. (architects of the Dempression, government)

    This blog raises awareness. We are in deep, deep, trouble. Ignoring our state of affairs while our citizens check out every night with a diet of booze, pot, and American Idol is a dis service to all of us. I have never seen greater apathy in all of my life-50 years. We have lost the art of communication, of grace, of service to others. We serve ourselves. And that greed and self centered ness will be our undoing, such as it is now.

    We will either be united by this common foe and whip it or become government and debt slaves. It is that serious.

    I want to thank this blog for focusing on the issues despite the fact that they are gloomy. Running away from them, or labeling them, will not make them go away…

  • de Malfosse

    Who needs a draft for The Imperial Legions now?

  • Elocutionist

    The question begging an answer is, by extension, what will happen when joblessness worsens on the heels of the impending end to the Bush tax cuts and amid the slew of new taxes which, first and foremost, will impact the poorest worst of anyone. The lowest tax rate (10%) will climb to 15% under the current plan. Good luck collecting that 5% increase when jobs are few and far between. Maybe that’s the whole plan, though. Hike taxes on the poorest, by the greatest margin, but keep them jobless so they don’t actually have to pay anything. As for the highest end of the tax-paying strata, they are leaving the country in droves. They will rescind their citizenship and, ultimately, if people don’t have government jobs – there just won’t be any jobs at all because federal and state tax policies will have sufficiently scared off the capital that would have created them. The times are frightening indeed. Eventually, the U.S. will – if current policies remain intact – become almost exclusively home to the jobless and desperate. And the jobless and desperate are hardly the pick of the litter in terms of changing the status quo. Instead of real, meaningful ‘change’ (I’ve come to hate that word), we are likely to see an acceleration in the demand for government assistance but the pool from which government drains that assistance is growing shallower all the time. We will soon be drowned in the sorts of unrest occuring across Europe and Asia. Buckle up. Government’s policies are coming home to roost.

  • http://erectuswalksamongstus.com Max Hardwood

    This article fails to mention another, more ominous reason for the loss of jobs: the Rise of the Machines. The Dixie Corporation (remember, Dixie Cups?) laid off hundreds of workers recently because the ‘automated’ their factory. As the above article mentioned, we are now in a high-tech world where business can be run from anywhere…..including your home.

    There is nothing a human can do that a machine cannot. It won’t be long before machines become intelligent (AI) and the BORG Hive Mentality takes over the ‘Human’ hegemony.

  • andy

    power and greed; time and again we see the result of short sighted goals without vision in order to profit from these vices, from government to banks and private corporations. Ultimately, western governments have tangibly done nothing to protect their own workers from the impact of globalisation. Worse, the state is pushing back on basic welfare benefits so we are left with a triple whammy of no jobs, no money and no assets
    So tell me, where does that leave the contract between the citizen and the state; broken i think

  • Robert

    Last night on ABC 7 news I heard about coming the 2nd wave of deep recession (first is not over yet) and be prepare for that. Anybody can say what target it will be? More lost jobs, banks will hold your money (like in 1903s), real-estate will go down more than now or what could happen?

  • justamom

    The democracy will cease to exist
    when you take away from those
    who are willing to work and give to those who would not.
    Thomas Jefferson

  • sharonsj

    It’s not only small businesses that are seeing more taxes–it’s everyone else…except for the really rich. I assume that when the Bush tax cuts for the really rich expire, we might see the federal and state governments getting more money–but the operative word here is “might.”

    Most of us can barely pay our bills to survive, and a main reason is mentioned in the article. White collar workers no longer have a steady job with benefits. They are contract workers, often for a limited period of time. And self-employed people also face a long list of expenses.

    Recently I had to lend a lawyer friend money to pay her electric bill. She’s self-employed and the cost of malpractice and license requirements are outrageous. Another friend, an accountant whose contract job had ended, was hysterical because he and his self-employed wife could not pay the rent that month.

    Unless Washington D.C. can find ways to make the middle class prosperous again, this country will be just another banana republic.

  • Grumpy

    @Robert: anything that moves, financially speaking, is a target. Commercial real estate (CRE) is the current boogeyman, but expect more housing defauls as well. Both will drive more bank failures (except those that are TBTF, who will receive more taxpayer-funded largess), which will lead to more unemployment as non-corporate commercial lending will continue to flatline (the fiat notes flooding into the banks gets dumped into Treasuries for a quick, safe ROI, and some into artificially pumping the equity markets). Increased taxes, as already noted, will usher in a new round of layoffs and slashed/eliminated benefits in the private sector. Learn and understand the term ‘Death Spiral” – you’re seeing it applied in real time.

    As for myself, I own a small business and have only contract employees (the paperwork and hassle of employees is already brudensome for a business my size – just wait until the Obamacare taxes are applied in January ’11). Business has dropped 55% since July ’08, and my customer demographic is pretty narrow right now. Over 90% of my clients either work for State or Federal agencies, companies which have major contracts with State or Federal agencies, or banks. I will probably be out of business if the State cuts jobs/salaries, but I’d rather see their jobs cut and have no business than continue earning little to nothing while paying their salaries. Cutting gov’t. spending means that I may have an opportunity to earn a decent living in the future; continuance of current rates of gov’t. spending and borrowing (not to mention additional taxation to service the debt) only insures my involuntary servitude in perpetuity.

    At least that’s the gov’t. plan for me. When it gets to that point, I have other ideas for my future – and they don’t involve rainbows and unicorns…

  • Ohio Loan Officer

    Most people I know have their heads in the sand. They refuse to believe things could get worse.
    Those unemployed believe as soon as their UE benefits run out they can run out and get another job. Those still employed believe they are immune to any further cuts.
    I know two friends who both looked into starting businesses but the red tape is sooooooo horrendous.

  • bob

    Well, take a look at England, our future. No jobs, govt health care, socialism everywhere. Thats obamas america. Until you get a president who understands freedom, how the economy works, instead of one who exploits situations for his handlers, it’s only going to get worse. Remember his goal is North American Union, open borders everywhere, so he’s not about to shut down our southern border. America is headed for a very rough time ahead. An America we wont recognize, where, the American Flag gets painted over, kids are arrested for wearing the red white and blue on cinco de mayo day, where Islam is more important in history books than christianity. The days of a free America are long over. The transition to a new world order has begun.

  • tyler

    A lot of middle class people are becoming homeless, and the homeless are now the number one target of law enforcement. They don’t care as much about killers and pedophiles as they do the homeless. I was homeless and now I’m living with my parents I was arrested at least ten times for things I had no involvement with. The city I live in made it a crime to fly a sign and put metal fences around all the bridges. The homeless have no where to go and its happening all around this country.

  • ParLay

    It all comes back to the govt regulating companies to death but not protecting U.S. developed technology from being shipped overseas. The Asian and Latin economies stole generations worth of technology and manufacturing experience from the U.S. in a few short years and now you see the result. All the time the govt was very aware what was happening but turned a blind eye.

    The U.S. is still a powerhouse in technology and development and if the govt would ramp down the regulations but instead start aggressively protecting our technology we could turn this ship around in a few years. But that doesn’t seem to fit their agenda or mode of operation. It just shows how little private industry experience most of these people have in Washington, D.C. They just don’t get it!!

  • El Pollo de Oro

    This country is no longer The United States of America. It is now The Banana Republic of America, a Third World horror movie under the iron boot of a thieving oligarchy. In banana republics, there is no middle class–only an extremely wealthy ruling class minority and a dirt-poor majority–and the former USA, now the BRA, is moving more and more in that direction. Gerald Celente is absolutely right: this is an UN-developing country.

    Bienvenido a la República Banana de América, pesadilla del tercer mundo.

  • Spencer

    @Harwood

    People have been complaining about machines replacing them since the beginning of the industrial revolution. Necessity is the mother of invention. Blaming machines, just list blaming offshoring, is a weak attempt at people trying to get paid more then they are worth.

    @HarryPotter
    This blog is insanely repetitive and just about as credible as CNN….but to each his own I suppose..

  • Brittany Shelley

    One of the reasons I will move by 2014.

  • Serendipity Seraph

    This article is missing a data reference or two. It claims that a lot of small businesses are either shutting down or hiring many less workers. I would like a link to data supporting this conclusion. I don’t disbelief it but I need to see the data. I would also like more analysis on this subject as I am beginning a fledgling startup. Thanks.

  • Joe in JT

    This article says large corporations have lobbiest who “help” write the laws.

    Heck, lobbiest “do” write the laws! The Congress and the House just vote yes without even reading the darn things, just as long as “their” pet projects are included in the fine print.

    Did I say pet projects? I meant pork projects. Ha ha.

  • francismarion

    Newsreal.blog reports that the head of NASA in an interview with Al-Jazeera says Obama has ordered him to turn over our rocket technology to him. How will this not lead to heightened chances of war? Not very Nobel of him. Meanwhile NASA is laying off hundreds of engineers and gutting various projects.

  • Randy

    This is so blatantly obvious that one wonders how economists and Economic Schools have failed to make a big stink about it for the past 20 years. I don’t care how many politicians Big Business buys. If the battle cry is: Big Business = no jobs, politicians are going to think twice. I hope our current ‘looking over the edge of a cliff’ is enough to make politicians AND VOTERS see reason and return to a level playing field.

  • Michael

    Agreed, there are a lot of useless regulations. I did not know that Obummer reased taxes on small business. But the article does not mention that declining demand is the reason businesses of all kinds are not hiring. Consumer demand has been destroyed by oursourcing. Where will demand come from?

  • Frank

    Even if all government taxes and regulations were abolished (which I agree, most should be), what kind of business would you start? Simplifying laws and taxes would throw most of the lawyers, bureaucrats, accountants, and quite a few IT people out of work. They would have to do something productive, but what? Wealth creation comes from production and extraction and adding value. Most of those functions for the US are done in other countries more cheaply. They are actually generating wealth. Until our wages are equalized in real value with China and India, they will always possess a relative advantage, and we will have to borrow the difference to keep buying what they produce. Unless you have a closed system, eventually the wages of the US and China must equalize. Simple supply and demand will tell you that US workers want too much money, that is why there is so little demand for them. Apple would be happy to build iPhones here if they could pay workers $10 a day, but then who would have the money to buy them? The debt is the difference in what we pay in the US versus what the Chinese and others are paid to generate our products.

  • Rafael Fernández

    I enjoy your blog that I found by chance reading people’s comments in the New York Times. I would like to recommend the book from the French author The Economic Horror ( L’horreur economique). It was first published in Europe in 1996, it was a best seller. Viviane Forrester’s economics is largely self-taught, and until the publication of L’horreur, she was better known as a novelist and literary critic.Forrester’s thesis is that employment as we have known it for three centuries throughout the West, has had its day and is becoming less plausible by the year as a way of distributing wealth. L’horreur also attacks the present policies of Western governments as it makes ever more desperate attempts to keep the jobs-and-wages system alive. Forrester cites the constant downsizing of ever larger numbers of the working and, now, middle classes; the steady attrition, internationally, of welfare and union rights; and the growing destabilization of those in work, let alone of the unemployed.
    All this has created an employment and unemployment (and underemployment) culture that is not merely stressful, regrettable and unpleasant but has also, according to Forrester, “spawned an economic world that is an obscenity, an affront to human nature” and, in the words of the book’s title, a “horror”.

  • Steve Dean

    Weren’t these same regulations in effect when Bush was POTUS?

    Can you provide a list of all of the new regulations that have come into effect in the past 17 months?

  • http://www.homeloanpresident.com Mark Lieberman

    There is one small business that is still hiring in this recession “The Dollar Stores” You can get a minimun wage job here and sell tons of Made in China junk and put still more Americans out of work! I remember Bob Hope years ago did a TV commercial for a Made In America organization, and Bob came right out and said “Made In America…You Better Believe It Matters To Me” Could you think of any famous personalty who would say that today?

  • Leslie Wolf Vanette

    darn. typed a great comment about this blog and I got the captcha code “wrong”……Honestly, this is like dealing with the government being a small business. All the “work” then *beep* “don’t qualify!”

  • JDL

    @Frank

    There is enough wealth in the world for nearly everyone to live prosperously. And there is a technological means to disperse this wealth.. not by government, but naturally via the markets.. however, sociopaths horde the wealth and will never give it up. They would rather make 10 million, than make 9 million and give everyone a 1,000 dollar raise.

  • Mr Carpenter

    Death spiral. See the cartoon, link below, starting at about 7:00 minutes (or watch it from the beginning to get an idea of what on earth was going on!)

    The United States is at about 7:20 right about now….

    Next comes exponential, epic failures one after the other compounding….

    The ending in real life isn’t going to be as good as the ending in the Bugs Bunny cartoon…

    http://www.youtube.com/watch?v=D1xqrdtJs8w

    Then remember that S-word that Bugs had such a time pronouncing…. Sab-o-tageee. And who the saboteurs are.

  • robert

    automation of the workplace does not help the situation either.

    Advances in robotics and other technologies which replace manual labor will always occur.

    Technology and human labor have always been,and will always be in conflict.

    Technology may be more of a problem than anything else……..

  • lostinmissouri

    justamom
    Thanks for another great quote, worth repeating:

    The democracy will cease to exist
    when you take away from those
    who are willing to work and give to those who would not.
    Thomas Jefferson

    Grumpy,

    I own a small business also and feel the same way. When Barry raises taxes and his health care kicks in, there is no way I am going to put up with it anymore….Who is John Galt?

    I’m shrugging!

  • http://FlusterCucked.blogspot.com Frank the Underemployed Professional

    The problem is not primarily taxes but Global Labor Arbitrage.

    Jobs are not going overseas because of personal income taxes but because the Chinese and Indians are willing to work for low wages. Americans are being displaced domestically by H-1B and L-1 visa holders, and hordes of impoverished immigrants, both legal and legal, have been displacing Americans from lower class jobs and other jobs.

    I blame both the Republicans and the Democrats equally. In terms of fundamental economic policy they are almost act as a single unified party with the same policy. Both parties are rotten.

    I don’t like Obama, but I don’t think he deserves all or even the Lion’s share of the blame for our nation’s economic problems. The symptoms of the disease of Global Labor Arbitrage asserted themselves under Bush, and Bush’s only response was to cheer it on. The disease has been in the works for decades and almost all of our politicians have contributed to it.

  • ww

    LEts provide millions of high tech jobs
    BACK to Americans by abolishing H-1B visa for Indiands to come here and work in the office while Americans sit at home unemployed. There should be demonstrations against companies who practice this H-1B foreign worker BS.
    But nobody does anything. THe Foreign guest workers need to be returned home
    immeadiately and the Americans who got displaced by Indians should have their jobs back. If the foreigners don’t like it , tough ****. We will kick their ass. Time to get real and call a spade a spade. Americans need the jobs to eat.

  • XZ

    @WW
    Your anger against indians are completely justified. I am from Europe, but I did most of my studies (masters, Ph.D.) in U.S. I graduated in May, but now I find it very hard to get a job or postdoc position. At the same time, I witness a lot of Indians get H1B visa because of bachelor’s degree in software engg from India.

    Last month, I had a post doc one-day interview at a famous institute. I did well, but after one-week I got the “Dear John” letter. From some internal sources, it was revealed that they took an Indian Ph.D. graduate through phone interview. I expected the job to be filled by persons who studied in the U.S. These kind of attitude will collapse the economy and create hatred towards other racial groups.

    Unless, the U.S. govt. impose more strict regulation, the persons who are highly qualified will have to leave the country soon.

  • http://altrautman.bizland.com AL TRAUTMAN

    The thing NEITHER PARTY is admitting is Bill Clinton gave us NAFTA, GWB gave us CAFTA and our BUY-PARTI$AN HOUSE and Senate gave us SHAFTA.

    The blue-print for out-sourcingIS NAFTA/CAFTA.

    HERE is more important than anything and BOTH PARTIES GAVE IT TO US.

  • http://www.buyingmutualfunds.blogspot.com funds

    I use to own a small business. Lost it. Now, Im looking for a job and cant even get one.

  • http://theeconomiccollapseblog.com/archives/no-jobs Natalie

    I beg to differ everyone! There are jobs, I had to rehire for the 3rd time in the past few months. Everyone wants a job, begs hard for it, then after you spend time training them, they get a little comfortable. Gee, now they want to dictate their hours, call off, will you switch with me, I need this day off and this day off. Meanwhile, because they are part time, they still get food stamps, welfare or partial unemployment checks. By getting extra government checks on the side, they feel they can take a day off or switch here and there. Anyone can say “I need a job, please hire me but not really mean it. Nobody wants to work, they just want the cash without shedding any sweat for it. It cost money to train people, problem is who are the lazy liars? People bitch about those coming across the borders to work, but I don’t see anyone willing to take those type of jobs. If they do they never last the hot sun beating on their sore backs as they bend over to pick, or the humidity as they gasp for air. Bitch all you want! Go live in a tent, nobody forced you to go in debt in the high 6 figures. All the beer man pocket books who rushed to dream the champagne appetite, now to be knocked down to ketchup over noodles, pinch a little harder and you might get sprinkled cheese on that plate!

  • Mike

    I refude to hire even though I really need the help. I am working longer hours and paying a little overtime instead. I figure if people like me don’t hire than we will be rid of obama. High unemployment is his undoing. I business slows any I will layoff people right away and drive up unemployment. I will of course tell the people I lay off that it is Obamas fault!

  • Les Invisible

    Hey Obama bashers, did you forget it is the Republicans who (Bush) ruined (8 years) the economy, health care, and the future? Who’s running the show here? Do you think the rich are going to give to the poor? Everything Obama tried to do for the country the Republicans and rich ruined it. The only one bashing Obama is probably employed by an overcharging thief. Nepotism rules in America. Who want’s gold and diamonds? I could care less, you know who, the people responsible for the island of garbage in the ocean. This situation is what 2012 is for, then the higher powers can sort out the real garbage.

  • PalinTheWitchcraft

    Mike, you are a p u ssy. If you think you’re view is a majority view and your in the right, then post your businesses website.

    But that’s not the case. You behavior of not hiring because you hate obama is dispicable. Wingnut and teabagger make up 13% of any poll and you know it. That’s why you and all 13%ers behave like terrorists and traitors to the U.S.

    The ends justify the means, right Mike?

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