Is Barack Obama trying to kill the economy on purpose? On Sunday, we learned that Obama is imposing a nationwide 32 percent carbon dioxide emission reduction from 2005 levels by the year 2030. When it was first proposed last year, Obama’s plan called for a 30 percent reduction, but the final version is even more dramatic. The Obama administration admits that this is going to cost the U.S. economy billions of dollars a year and that electricity rates for many Americans are going to rise substantially. And what Obama is not telling us is that this plan is going to kill what is left of our coal industry and will destroy countless numbers of American jobs. The Republicans in Congress hate this plan, state governments across the country hate this plan, and thousands of business owners hate this plan. But since Barack Obama has decided that this is a good idea, he is imposing it on all of us anyway.
So how can Obama get away with doing this without congressional approval?
Well, he is using the “regulatory power” of the Environmental Protection Agency. Congress is increasingly becoming irrelevant as federal agencies issue thousands of new rules and regulations each and every year. The IRS, for example, issues countless numbers of new rules and regulations each year without every consulting Congress. Government bureaucracy has spun wildly out of control, and most Americans don’t even realize what is happening.
Last year, the Obama administration proposed the first greenhouse gas limits on existing power plants in U.S. history, triggering a yearlong review and 4 million public comments to the Environmental Protection Agency. In a video posted to Facebook, Obama said he would announce the final rule at a White House event on Monday, calling it the biggest step the U.S. has ever taken on climate change.
The final version imposes stricter carbon dioxide limits on states than was previously expected: a 32 percent cut by 2030, compared to 2005 levels, senior administration officials said. Obama’s proposed version last year called only for a 30 percent cut.
In America today, the burning of coal produces approximately 40 percent of the electrical power used by Americans each year.
So what is this going to do to our electricity bills?
You guessed it – at this point even the Obama administration is admitting that they are going to go up. The following comes from Fox News…
The Obama administration previously predicted emissions limits will cost up to $8.8 billion annually by 2030, though it says those costs will be far outweighed by health savings from fewer asthma attacks and other benefits. The actual price is unknown until states decide how they’ll reach their targets, but the administration has projected the rule would raise electricity prices about 4.9 percent by 2020 and prompt coal-fired power plants to close.
In the works for years, the power plant rule forms the cornerstone of Obama’s plan to curb U.S. emissions and keep global temperatures from climbing, and its success is pivotal to the legacy Obama hopes to leave on climate change. Never before has the U.S. sought to restrict carbon dioxide from existing power plants.
And we must keep in mind that government projections are always way too optimistic. The real numbers would almost surely turn out to be far, far worse than this.
In addition, these new regulations are going to complete Barack Obama’s goal of destroying our coal industry. In a previous article, I included an excerpt from a recent news article about how some of the largest coal producers in America have just announced that they are declaring bankruptcy…
On Thursday, Bloomberg reported that the biggest American producer of coking coal, Alpha Natural Resources, could file for bankruptcy as soon as Monday.
Barack Obama has actually done something that he promised to do.
He promised to kill the coal industry, and he is well on the way to accomplishing that goal.
Of course Hillary Clinton thinks that this is a splendid idea. She called Obama’s plan “the floor, not the ceiling”, and she is pledging to do even more to reduce greenhouse gas emissions. The following comes from the Washington Post…
Democratic presidential front-runner Hillary Rodham Clinton pledged Sunday that if elected she will build on a new White House clean-energy program and defend it against those she called “Republican doubters and defeatists.”
Clinton was the first 2016 candidate to respond to the ambitious plan that President Obama will debut on Monday. Details of the program, which aims to cut greenhouse-gas pollution, were released over the weekend. The new regulation will require every state to reduce emissions from coal-burning power plants.
And you know what?
The climate control freaks will never be satisfied. Since just about all human activity affects the climate in some way, they will eventually demand control over virtually everything that we do in the name of “saving the planet”. That is why I call it “climate fascism” – in the end it is all about control.
During the month of September, the Pope is going to travel to the United Nations to give a major speech to kick off the conference at which the UN’s new sustainable development agenda will be launched. As I have documented previously, this new agenda does not just cover greenhouse gas emissions and the environment. It also addresses areas such as economics, agriculture, education and gender equality. It has been called “Agenda 21 on steroids”, and it is basically a blueprint for governing the entire planet.
Unfortunately, that is ultimately what the elite want.
They want to micromanage the lives of every, man, woman and child on the globe.
They will tell us that unless people everywhere are forced to reduce their “carbon footprints” that climate catastrophe is absolutely certain, but their “solutions” always mean more power and more control in their hands.
Barack Obama promised to fundamentally transform America, and he is doing it in hundreds of different ways. These new greenhouse gas regulations are just one example. Our nation is being gutted like a fish, and most Americans don’t seem to care.
What in the world will it take for this country to finally wake up?
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…
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 decreasedby 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…
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.
Jim Clifton, the Chairman and CEO of Gallup, says that the percentage of Americans that are employed full-time has been hovering near record lows since the end of the last recession. But most Americans don’t realize this because the official unemployment numbers are extremely misleading. In fact, Clifton says that the official 5.6 percent unemployment rate is a “big lie”. Gallup regularly tracks the percentage of U.S. adults that are employed for 30 or more hours per week, and it is currently at 44.2 percent. It has been hovering between 42 percent and 45 percent since the end of 2009. This is extremely low. As I discussed the other day, there are 8.69 million Americans that are considered to be “officially unemployed” at this point. But there are another 92.90 million Americans that are considered to be “not in the labor force”. Millions upon millions of those Americans would work if they could. Overall, there are 101 million U.S. adults that do not have a job right now. But you won’t hear that number being discussed by the mainstream media, because it would make Barack Obama look really bad.
Most Americans just assume that the economic numbers that we are being given accurately reflect reality. That is why it is so refreshing to have men like Jim Clifton step forward and tell the truth. His recent article entitled “The Big Lie: 5.6% Unemployment” is making headlines all over America. The following is an extended excerpt from that article…
There’s another reason why the official rate is misleading. Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 — maybe someone pays you to mow their lawn — you’re not officially counted as unemployed in the much-reported 5.6%. Few Americans know this.
Yet another figure of importance that doesn’t get much press: those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find — in other words, you are severely underemployed — the government doesn’t count you in the 5.6%. Few Americans know this.
There’s no other way to say this. The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.
And it’s a lie that has consequences, because the great American dream is to have a good job, and in recent years, America has failed to deliver that dream more than it has at any time in recent memory. A good job is an individual’s primary identity, their very self-worth, their dignity — it establishes the relationship they have with their friends, community and country. When we fail to deliver a good job that fits a citizen’s talents, training and experience, we are failing the great American dream.
Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. Right now, the U.S. is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older.
And Gallup is being extremely generous.
I certainly would not define a 30 hour a week job at minimum wage as a “good job”, but Gallup does.
So the truth is that the percentage of U.S. adults that do have “good jobs” is actually far lower than 44 percent.
In the video that I have posted below, there is much more from Clifton about our current employment crisis…
Pretty strong stuff.
But Clifton also understands that there is danger in speaking out like this.
For example, just check out what he told CNBC during one recent interview…
“I think that the number that comes out of BLS [Bureau of Labor Statistics] and the Department of Labor is very, very accurate. I need to make that very, very clear so that I don’t suddenly disappear. I need to make it home tonight.”
So why are there so few good jobs for Americans?
Well, for one thing, our control freak politicians have absolutely murdered job creation in the United States.
Traditionally, small businesses have been the primary engine of job growth for the U.S. economy. But for each of the past six years, the number of new businesses being created has been lower than the number of businesses that have died.
Prior to 2008, we had never seen this happen before in all of U.S. history.
A confluence of factors are coming together to create a perfect storm that is going to be extremely bitter for American workers.
Spending our wealth is not a path to prosperity. We have got to create wealth in order to be a prosperous nation.
But instead, we continue to buy far, far more from the rest of the world than they buy from us. We just learned that the trade deficit increased to 46.6 billion dollars in December, and the total trade deficit for the year was more than half a trillion dollars.
This is complete and utter insanity, but at this point the trade deficit is not even a political issue for either major political party anymore.
And the really bad news is that this is about as good as things are going to get for the U.S. economy. The next major economic downturn is right around the corner, and our employment crisis is going to get much, much worse once that strikes.
Already, layoffs in January were 17.6 percent higher than they were in January a year ago and businesses all over the country are shutting down following a very disappointing holiday season.
In addition, the Baltic Dry Index has dropped to stunningly low levels. In fact, it is already lower than it was at any point during the last recession. The following is an excerpt from a recent article by Mac Slavo…
The Baltic Dry Index (BDI) is used by economists and stock traders alike as a leading economic indicator because it predicts future economic activity. The index tracks in US dollars and measures global supply and demand for commodity shipments among bulk carriers including raw materials like lumber, coal, metallic ores, and grains. What makes this particular measurement so distinct from others, according to economic Howard Simmons, is that the BDI “is totally devoid of speculative content” because “people don’t book freighters unless they have cargo to move.”
On Thursday, the Baltic Dry Index was sitting at 564, That is not too far above the record low level of 554 that was established in July 1986.
So don’t be fooled by all the happy talk from the mainstream media and from politicians like Barack Obama.
They are lying to you, and their lies will soon be evident for all the world to see.
The gravy train is over for oil workers. All over North America, people that felt very secure about their jobs just a few weeks ago are now getting pink slips. There are even some people that I know personally that this has happened to. The economy is really starting to bleed oil patch jobs, and as long as the price of oil stays down at this level the job losses are going to continue. But this is what happens when a “boom” turns into a “bust”. Since 2003, drilling and extraction jobs in the United States have doubled. And these jobs typically pay very well. It is not uncommon for oil patch workers to make well over $100,000 a year, and these are precisely the types of jobs that we cannot afford to be losing. The middle class is struggling mightily as it is. And just like we witnessed in 2008, oil industry layoffs usually come before a downturn in employment for the overall economy. So if you think that it is tough to find a good job in America right now, you definitely will not like what comes next.
At one time, I encouraged those that were desperate for employment to check out states like North Dakota and Texas that were experiencing an oil boom. Unfortunately, the tremendous expansion that we witnessed is now reversing…
In states like North Dakota, Oklahoma and Texas, which have reaped the benefits of a domestic oil boom, the retrenchment is beginning.
“Drilling budgets are being slashed across the board,” said Ron Ness, president of the North Dakota Petroleum Council, which represents more than 500 companies working in the state’s Bakken oil patch.
Smaller budgets and less extraction activity means less jobs.
Often, the loss of a job in this industry can come without any warning whatsoever. Just check out the following example from a recent Bloomberg article…
The first thing oilfield geophysicist Emmanuel Osakwe noticed when he arrived back at work before 8 a.m. last month after a short vacation was all the darkened offices.
By that time of morning, the West Houston building of his oilfield services company was usually bustling with workers. A couple hours later, after a surprise call from Human Resources, Osakwe was adding to the emptiness: one of thousands of energy industry workers getting their pink slips as crude prices have plunged to less than $50 a barrel.
These jobs are not easy to replace. If oil industry veterans go down to the local Wal-Mart to get jobs, they will end up making only a very small fraction of what they once did. Every one of these jobs that gets lost is really going to hurt.
And at this point, the job losses in the oil industry are threatening to become an avalanche. The following are 12 signs that the economy is really starting to bleed oil patch jobs…
#1 It is being projected that the U.S. oil rig count will decline by 15 percent in the first quarter of 2015 alone. And when there are less rigs operating, less workers are needed so people get fired.
#3 Oilfield services provider Baker Hughes has announced that it plans to lay off 7,000 workers.
#4 Schlumberger, a big player in the energy industry, has announced plans to get rid of 9,000 workers.
#5 Suncor Energy is eliminating 1,000 workers from their oil projects up in Canada.
#6 Halliburton’s energy industry operations have slowed down dramatically, so they gave pink slips to 1,000 workers last month.
#7 Diamondback Energy just slashed their capital expenditure budget 40 percent to just $450 million.
#8 Elevation Resources plans to cut their capital expenditure budget from $227 million to $100 million.
#9 Concho Resources says that it plans to reduce the number of rigs that it is operating from 35 to 25.
#10 Tullow Oil has reduced their exploration budget from approximately a billion dollars to about 200 million dollars.
#11 Henry Resources President Danny Campbell has announced that his company is reducing activity “by up to 40 percent“.
#12 The Federal Reserve Bank of Dallas is projecting that 140,000 jobs related to the energy industry will be lost in the state of Texas alone during 2015.
And of course it isn’t just workers that are going to suffer.
Some states are extremely dependent on oil revenues. Just take the state of Alaska for instance. According to one recent news report, 90 percent of the budget of Alaska comes from oil revenue…
But oil is also a revenue source in more than two dozen states, especially for about a third of them. In Alaska, where up to 90 percent of the budget is funded by oil, new Gov. Bill Walker has ordered agency heads to start identifying spending cuts.
Sadly, it looks like oil is not going to rebound any time soon.
China, the biggest user of oil in the world, just reported that economic growth expanded at the slowest pace in 24 years. And concerns about oversupply drove the price of U.S. crude down another couple of dollars on Monday…
Oil declined about 5 percent on Tuesday after the International Monetary Fund cut its 2015 global economic forecast on lower fuel demand and key producer Iran hinted prices could drop to $25 a barrel without supportive OPEC action.
U.S. crude, also known as West Texas Intermediate or WTI, settled 4.7 percent lower at $46.39 a barrel, near its intraday bottom of $46.23.
There is only one other time in history when we have seen an oil price crash of this magnitude.
That was in 2008, just before the greatest financial crisis since the Great Depression.
Many believe that we are now on the verge of the next great financial crisis.
The Social Security Administration has just released wage statistics for 2013, and the numbers are startling. Last year, 50 percent of all American workers made less than $28,031, and 39 percent of all American workers made less than $20,000. If you worked a full-time job at $10 an hour all year long with two weeks off, you would make $20,000. So the fact that 39 percent of all workers made less than that amount is rather telling. This is more evidence of the declining quality of the jobs in this country. In many homes in America today, both parents are working multiple jobs in a desperate attempt to make ends meet. Our paychecks are stagnant while the cost of living just continues to soar. And the jobs that are being added to the economy pay a lot less than the jobs lost in the last recession. In fact, it has been estimated that the jobs that have been created since the last recession pay an average of 23 percent less than the jobs that were lost. We are witnessing the slow-motion destruction of the middle class, and very few of our leaders seem to care.
The “average” yearly wage in America last year was just $43,041. But after accounting for inflation, that was actually worse than the year before…
American paychecks shrank last year, just-released data show, further eroding the public’s purchasing power, which is so vital to economic growth.
Average pay for 2013 was $43,041 — down $79 from the previous year when measured in 2013 dollars. Worse, average pay fell $508 below the 2007 level, my analysis of the new Social Security Administration data shows.
Flat or declining average pay is a major reason so many Americans feel that the Great Recession never ended for them. A severe job shortage compounds that misery not just for workers but also for businesses trying to profit from selling goods and services.
Average pay declined in 59 of the 60 levels of worker pay the government reports each October.
And please keep in mind that “average pay” is really skewed by the millionaires and billionaires at the top end of the spectrum.
Median pay in 2013 was just $28,031.02. That means that 50 percent of American workers made less than that number, and 50 percent of American workers made more than that number.
Here are some more numbers from the report that the Social Security Administration just released…
-39 percent of American workers made less than $20,000 last year.
-52 percent of American workers made less than $30,000 last year.
-63 percent of American workers made less than $40,000 last year.
-72 percent of American workers made less than $50,000 last year.
I don’t know about you, but those numbers are deeply troubling to me.
It has been estimated that it takes approximately $50,000 a year to support a middle class lifestyle for a family of four, and so the fact that 72 percent of all workers make less than that amount shows how difficult it is for families that try to get by with just a single breadwinner.
The way that our economy is structured now, both parents usually have to work as hard as they can just to pay the bills.
But there was one group of Americans that did see their incomes actually increase last year.
Those making over 50 million dollars had their pay increase by an average of $12.8 million in 2013.
For everyone else, the news was not good.
And of course this is a trend that has been going on for a long time.
Posted below is a chart that comes from the Federal Reserve. It shows how real median household income in the United States has declined since the year 2000…
Meanwhile, the cost of living has continued to rise at a steady pace.
Needless to say, this is putting a tremendous squeeze on the middle class. With each passing day, more Americans are losing their spots in the middle class and this has pushed government dependence to an all-time high. According to the U.S. Census Bureau, 49 percent of all Americans now live in a home that receives money from the government each month. This is completely and totally unsustainable, but our long-term economic problems just keep getting worse.
Our politicians have stood by as millions upon millions of good paying jobs have been shipped out of the country. Millions of other middle class jobs have been lost to technology. This has resulted in intense competition for the middle class jobs that remain.
And at this point we are even losing lots of lower paying retail jobs. For example, it is being reported that Sears plans to close 110 more stores and lay off more than 6,000 workers. Sears says that the report “isn’t accurate”, but it isn’t denying that stores will be closed either…
In an email to USA Today, Sears spokesman Howard Riefs said the store count and closures “isn’t accurate,” but did not provide store closures or layoff numbers.
“As we stated in our (second quarter earnings report), we disclosed that we would be closing unprofitable stores as leases expire and in some cases will accelerate closings when it is economically prudent. And that we would consider closing additional stores during the remainder of the year,” Riefs said. “Make no mistake, we believe the store will continue to play an integral role in our transformation, however, if a store is not generating a profit, it is straightforward that the store should be considered for closure.”
No matter how many stores Sears does end up closing over the next few months, the truth is that our economy is a complete and total mess at this point.
Our politicians and the mainstream media are trying to put a happy face on everything, but the cold, hard numbers prove that we are not anywhere close to where we were prior to the last recession.
Because it is so difficult to find a good job in America today, I often recommend to people that they should consider starting their own businesses.
But thanks to the bureaucratic control freaks in the Obama administration and in our state governments, small business ownership in America today is at an all-time low. It is almost as if they don’t want the “little guy” to win. Every avenue of prosperity for the middle class is under assault, and there does not appear to be much hope that this will change any time soon.
And the truly frightening thing is that this is about as good as things are going to get for the middle class. We are rapidly approaching the next major wave of our long-term economic decline, but that is a topic for a future article.