Unemployment

The U.S. Labor Force Participation Rate Is At A 35 Year Low

October 22, 2013October 22, 2013 by Michael

The percentage of Americans that are participating in the labor force is the lowest that it has been in 35 years. During the 70s, 80s and 90s, the labor force participation rate consistently rose as large numbers of women entered the workforce. It peaked at 67.3 percent in early 2000, and just before the last recession it was sitting at about 66 percent. Since the start of the last recession, the labor force participation rate has not stopped falling and it is now at a 35 year low. In September, 11,255,000 Americans were considered to be “unemployed”, and an astounding 90,609,000 Americans were considered to be “not in the labor force”. The number of Americans “not in the labor force” has increased by more than 10 million since Barack Obama entered the White House. When you add the number of unemployed Americans to the number of Americans “not in the labor force”, you come up with a grand total of more than 101 million working age Americans that do not have a job.

The Obama administration and the mainstream media continue to insist that we are in the midst of an “economic recovery”, but that is a total joke. Does the chart posted below look like a recovery to you?…

Americans are leaving the labor force in droves. If the labor force participation rate was at the same level that it was when Obama first became president, the official unemployment rate would be up around 10 percent and everyone would be wondering when the “economic depression” would finally end.

It is funny how our perceptions of reality are so greatly shaped by what our televisions tell us to think.

Below I have posted a chart of the “inactivity rate” of U.S. men in the 25 to 54-year-old age group. As you can see, the percentage of men in their prime working years that are not employed and not considered to be unemployed either has been rising steadily…

We have millions upon millions of men just sitting around and doing essentially nothing. Not that women are doing so much better. In fact, the labor force participation rate for women is at a 24 year low.

Some people may be tempted to think that all of this is happening because more Americans are choosing to stay home and raise children. But that is not the case at all. In fact, in a previous article I showed that the marriage rate in the U.S. is at an all-time low and the birth rate for young women in this country is also at an all-time low.

People are not staying home because of family obligations. Rather, people are staying home because there aren’t enough jobs available.

And when Americans that are actually employed do lose their jobs, it is taking them a very, very long time to find another one. Just check out the following chart…

Once again, I must ask – does that look like a “recovery” to you?

Obama can say the word “recovery” as much as he would like, but that does not make it a reality.

So is anyone out there actually doing well?

Yes, as I have talked about frequently, some pockets of the country are doing quite nicely. In fact, government workers (think Washington D.C.) and finance workers (Wall Street, etc.) are tied for the lowest rates of unemployment in the nation (3.9 percent).

But for almost everyone else, things are very hard right now and poverty continues to grow.

Just today, I came across a recent study that discovered that nearly half of all public students in the United States come from low income homes.

That is an incredible number.

But this is just the beginning of our problems. Our debt continues to grow by leaps and bounds and our big banks are engaging in extraordinarily reckless behavior. As Richard Russell recently discussed, it is only a matter of time before this entire house of cards comes tumbling down…

In this whole process, debt has been created to an extent never seen before in history. So far, the debt has been managed with super-low interest rates and borrowing. But the compounding process goes on, and the debt mountain continues to grow. So, to be brief, I see the theme of today as the “haves” doing whatever they have to — to remain in power.

The dangers in the background for the haves are the possibilities that (1) interest rates will begin to advance, and (2) inflation will rise and be so visible that even the common man will recognize it, and begin to protest, or even revolt and (3) the whole debt structure will rise so high that it will topple over of its own weight and take down the entire world economy with it.

So as bad as things are today, the truth is that they are far, far better than what is eventually coming.

If you want to get a glimpse of the future of the U.S. economy, just check out what has happened to Greece…

Greeks are on average almost 40 percent poorer than they were in 2008, data indicated, laying bare the impact of a brutal recession and austerity measures the government may be forced to extend into next year.

Gross disposable incomes fell 29.5 percent between the second quarters of 2008 and 2013, statistics service ELSTAT said on Tuesday. Adding in cumulative consumer price inflation over the same period takes the decline close to 40 percent.

As you can see from the charts posted above, our economy has never even come close to getting back to the level that we were at before the last financial crisis.

And now the next wave of the economic collapse is approaching.

Right now, Spain has an unemployment rate that is above 26 percent and Greece has an unemployment rate that is above 27 percent.

We will eventually be heading up toward those levels.

As millions of good paying jobs continue to be shipped overseas, and as technology continues to eliminate millions of our jobs, the unemployment situation in this country will continue to grow even worse.

And whenever the next great financial crisis inevitably strikes, that will greatly accelerate our employment problems.

If you can move toward becoming more independent of the “system”, now would be a good time to do so. The job that you have today may not be there next month or next year.

We are moving into the greatest period of economic instability in U.S. history.

Get ready for it while you still can.

Oxford Professors: Robots And Computers Could Take Half Our Jobs Within The Next 20 Years

September 29, 2013September 29, 2013 by Michael

What are human workers going to do when super-intelligent robots and computers are better than us at doing everything? That is one of the questions that a new study by Dr. Carl Frey and Dr. Michael Osborne of Oxford University sought to address, and what they concluded was that 47 percent of all U.S. jobs could be automated within the next 20 years. Considering the fact that the percentage of the U.S. population that is employed is already far lower than it was a decade ago, it is frightening to think that tens of millions more jobs could disappear due to technological advances over the next couple of decades. I have written extensively about how we are already losing millions of jobs to super cheap labor on the other side of the globe. What are middle class families going to do as technology also takes away huge numbers of our jobs at an ever increasing pace? We live during a period of history when knowledge is increasing an an exponential rate. In the past, when human workers were displaced by technology it also created new kinds of jobs that the world had never seen before. But what happens when the day arrives when computers and robots can do almost everything more cheaply and more efficiently than humans can?

For employers, there are a whole host of advantages that come with replacing human workers with technology. Robots and computers never complain, they never get tired, they never need vacation, they never show up late, they never waste time on Facebook, they don’t need any health benefits and there are a vast array of rules, regulations and taxes that you must deal with when you hire a human worker.

If you could get a task done more cheaply and more efficiently by replacing a human worker with technology, why wouldn’t you want to do it?

We are already starting to see this happen on a mass scale, and according to Dr. Frey and Dr. Osborne, close to half of all of our jobs could be automated within the next 20 years. A recent article posted on smartplanet.com described how this process might play out…

The automation of half the nation’s jobs will occur in two phases, the study says: The first wave will affect (and is affecting) jobs in transportation/logistics, production labor, administrative support, services, sales, and construction. The second wave — propelled by artificial intelligence — will affect jobs in management, science, engineering, and the arts.

Just as interesting as the study is the response provided by Gary Reber, founder and executive director of For Economic Justice, who argues that owners of the means of production will actually thrive as such a shift takes place. Those who rely on 9-to-5 standard employment arrangements for subsistence are likely to suffer the most in the automation wave. As Reber put it: ‘Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum.”

This is one of the reasons why the U.S. economy will never produce enough jobs for everyone ever again.

If technology can outperform humans, it is only rational for companies to replace humans with technology.

And this is even starting to happen in fields that require very high levels of education.

Just look at what is happening in the medical field. Today, millions of people turn to websites such as WebMD for their medical needs, but this is only just the beginning. Check out this excerpt from a recent Bloomberg article entitled “Doctor Robot Will See You Shortly“…

Johnson & Johnson proposes to replace anesthesiologists during simple procedures such as colonoscopies — not with nurse practitioners, but with machines. Sedasys, which dispenses propofol and monitors a patient automatically, was recently approved for use in healthy adult patients who have no particular risk of complications. Johnson & Johnson will lease the machines to doctor’s offices for $150 per procedure — cleverly set well below the $600 to $2,000 that anesthesiologists usually charge.

Certainly we will always need doctors.

But many of the tasks that doctors once performed will now be performed by technology.

For example, have you heard about “OnStar for the Body” yet? Some of these new “wearable technologies” are more than a little bit creepy…

Smart, cheaper and point-of-care sensors, such as those being developed for the Nokia Sensing XCHALLENGE, will further enable the ‘Digital Checkup’ from anywhere. The world of ‘Quantified Self’ and ‘Quantified Health’ will lead to a new generation of wearable technologies partnered with Artificial Intelligence that will help decipher and make this information actionable.

And this ‘actionability’ is key. We hear the term Big Data used in various contexts; when applied to health information it will likely be the smart integration of massive data sets from the ‘Internet of things’ with the small data about your activity, mood, and other information. When properly filtered, this data set can give insights on a macro level – population health – and micro – ‘OnStar for the Body‘ with a personalized ‘check engine light’ to help identify individual problems before they further develop into expensive, difficult-to-treat or fatal conditions.

We are also seeing humans being replaced in other fields as well. For instance, DARPA has developed a robot named “Atlas” that it hopes will be used in “disaster-response scenarios”…

DARPA’s Virtual Robotics Challenge entered a new phase in July, when Atlas — a 6-foot-2-inch, 330-pound robot developed by Boston Dynamics — was introduced to seven teams tasked with training it for disaster-response scenarios. The end goal? “Supervised autonomy” so that Atlas and its successors can step into situations too dangerous for humans.

I don’t know about you, but I don’t really want “Terminator” to show up when my family is in the middle of a disaster, but this is where things are headed.

And as technology increases, a lot of good paying middle class jobs are going to be vulnerable. In fact, one study of employment data that examined statistics from 20 countries found that “almost all the jobs disappearing are in industries that pay middle-class wages, ranging from $38,000 to $68,000.”

Those are exactly the sort of “breadwinner jobs” that middle class families rely upon.

And of course working class jobs are being replaced by technology as well. According to MIT Technology Review, a $22,000 humanoid robot named Baxter has been developed that can easily be programmed to do jobs that have never been automated before…

Brooks’s company, Rethink Robotics, says the robot will spark a “renaissance” in American manufacturing by helping small companies compete against low-wage offshore labor. Baxter will do that by accelerating a trend of factory efficiency that’s eliminated more jobs in the U.S. than overseas competition has. Of the approximately 5.8 million manufacturing jobs the U.S. lost between 2000 and 2010, according to McKinsey Global Institute, two-thirds were lost because of higher productivity and only 20 percent moved to places like China, Mexico, or Thailand.

The ultimate goal is for robots like Baxter to take over more complex tasks, such as fitting together parts on an electronics assembly line. “A couple more ticks of Moore’s Law and you’ve got automation that works more cheaply than Chinese labor does,” Andrew McAfee, an MIT researcher, predicted last year at a conference in Tucson, Arizona, where Baxter was discussed.

So what are human workers going to do when robots are making all of our products?

That is a very good question.

Incredibly, robots are now even replacing human factory workers in China. The following comes from a recent TechCrunch article…

Foxconn has been planning to buy 1 million robots to replace human workers and it looks like that change, albeit gradual, is about to start.

The company is allegedly paying $25,000 per robot – about three times a worker’s average salary – and they will replace humans in assembly tasks. The plans have been in place for a while – I spoke to Foxconn reps about this a year ago – and it makes perfect sense. Humans are messy, they want more money, and having a half-a-million of them in one factory is a recipe for unrest. But what happens after the halls are clear of careful young men and women and instead full of whirring robots?

So who benefits from all of this?

Those that own the big corporations that dominate our economy certainly benefit. They aren’t going to need to hire as many of us to work for them, and they are going to make even bigger profits than before.

Meanwhile, the gap between the wealthy and the poor will grow even larger. The only thing that most people have to offer in the economic marketplace is their labor, and the demand for that labor is decreasing with each passing day.

What do you think will happen to society when most of us are no longer “needed”?

Could we be headed for big trouble as a society?

And if you think that your job could “never be automated”, you might want to think again.

We are rapidly getting to the point where even driving will be automated…

Brace yourself. In a few years, your car will be able to drop you off at the door of a shopping center or airport terminal, go park itself and return when summoned with a smartphone app. Audi demonstrated such a system at this year’s Consumer Electronics Show.

At your next dinner party, ask for a show of hands of the people who’d want that.

Everybody?

Anybody want a car that doesn’t crash? At this month’s Frankfurt auto show, mega-auto supplier Continental announced a partnership with IBM to help bring autonomous vehicles to market, with “zero accidents” as a possible result. Volvo has promised to injury-proof its cars by 2020. GM and Carnegie Mellon aim to develop autonomous technology to eliminate car accidents.

So what will happen to the 3.1 million Americans that drive trucks for a living once all driving is automated?

What will happen to the millions of other Americans that drive buses, taxis and limos once all driving is automated?

That is something to think about.

And researchers are even trying to create computers that “seem human” when you have a conversation with them…

On 14 September, researchers will gathered in Derry, Northern Ireland, to demonstrate their latest efforts. If any of them has created a machine that successfully mimics a human, they will leave $100,000 richer.

The money is being put up by Hugh Loebner, a New York based philanthropist. His goal, he says, is total unemployment for all human beings throughout the world. He wants robots to do all the work. And the first step towards that is apparently to develop computers that seem human when you chat to them.

So if your job involves a telephone, you are in danger of being phased out. In fact, this transition is already starting to happen…

IPsoft is a young company started by Chetan Dube, a former mathematics professor at New York University. He reckons that artificial intelligence can take over most of the routine information-technology and business-process tasks currently performed by workers in offshore locations. “The last decade was about replacing labour with cheaper labour,” says Mr Dube. “The coming decade will be about replacing cheaper labour with autonomics.”

IPsoft’s Eliza, a “virtual service-desk employee” that learns on the job and can reply to e-mail, answer phone calls and hold conversations, is being tested by several multinationals. At one American media giant she is answering 62,000 calls a month from the firm’s information-technology staff. She is able to solve two out of three of the problems without human help. At IPsoft’s media-industry customer Eliza has replaced India’s Tata Consulting Services.

We truly are entering an unprecedented time in human history.

Instead of robots violently taking over society like so many movies have portrayed, they are slowly starting to “replace” us instead. A recent Wired article described what this transition might look like as it picks up steam…

First, machines will consolidate their gains in already-automated industries. After robots finish replacing assembly line workers, they will replace the workers in warehouses. Speedy bots able to lift 150 pounds all day long will retrieve boxes, sort them, and load them onto trucks. Fruit and vegetable picking will continue to be robotized until no humans pick outside of specialty farms. Pharmacies will feature a single pill-dispensing robot in the back while the pharmacists focus on patient consulting. Next, the more dexterous chores of cleaning in offices and schools will be taken over by late-night robots, starting with easy-to-do floors and windows and eventually getting to toilets. The highway legs of long-haul trucking routes will be driven by robots embedded in truck cabs.

All the while, robots will continue their migration into white-collar work. We already have artificial intelligence in many of our machines; we just don’t call it that. Witness one piece of software by Narrative Science (profiled in issue 20.05) that can write newspaper stories about sports games directly from the games’ stats or generate a synopsis of a company’s stock performance each day from bits of text around the web. Any job dealing with reams of paperwork will be taken over by bots, including much of medicine. Even those areas of medicine not defined by paperwork, such as surgery, are becoming increasingly robotic. The rote tasks of any information-intensive job can be automated. It doesn’t matter if you are a doctor, lawyer, architect, reporter, or even programmer: The robot takeover will be epic.

Are you ready for the “robot takeover”?

The world of employment is never going to be the same again. Technology has already surpassed human workers in a whole host of arenas, and this transition is only going to become more rapid in the years ahead.

So what does this mean for the rest of us? Please feel free to share your thoughts by posting a comment below…

The Number Of Private Sector Jobs Fell By 278,000 Last Month But The Economy Is Getting Better?

September 7, 2013 by Michael

Have you heard about the “wonderful” employment numbers that were just released? Last month, the unemployment rate declined to 7.3 percent. Somehow this happened even though the percentage of working age Americans with a job actually declined and the number of private sector workers fell by 278,000. So how did the federal government magically produce a drop in the unemployment rate even though less people have jobs? Well, they did it by pretending that more than half a million Americans “dropped out of the labor force” last month. If the government is to be believed, the number of Americans that want to work dropped by an astounding 516,000 in a single month even though the population of our country is constantly increasing. The federal government continues to feed us absolutely absurd numbers month after month, and at this point “the official unemployment rate” is essentially meaningless.

But that doesn’t mean that Barack Obama is about to drop the charade. In fact, he continues to insist that the economy is getting better. The following is an excerpt from one of Obama’s recent weekly radio addresses…

Over the past four and a half years, we’ve fought our way back from the worst recession of our lifetimes. And thanks to the grit and resilience of the American people, we’ve begun to lay a foundation for stronger, more durable economic growth.

Oh really?

Does he actually believe that anyone is still buying what he is saying?

The cold, hard truth is that the U.S. economy has not recovered while Obama has been in the White House. If you doubt this, please see my previous article entitled “33 Shocking Facts Which Show How Badly The Economy Has Tanked Since Obama Became President“.

Since World War II, the percentage of working age Americans that is employed had always bounced back dramatically after a recession ended.

Unfortunately, that has not happened this time.

As you can see from the chart posted below, the percentage of working age Americans with a job has stayed below 59 percent since late 2009. This chart reflects the most recent employment numbers…

So where is the recovery Obama?

Can he possibly put a positive spin on the chart above?

Of course not.

The truth is that the official unemployment rate should still be up around 10 percent like it was a few years ago.

But that wouldn’t make Obama look very good, would it? So the U.S. government has been pretending that millions upon millions of Americans have been “leaving the labor force”. This has pushed the labor force participation rate to a 35-year-low…

At this point, we have more than 90 million Americans that are considered to be “not in the labor force”…

On Friday, the BLS reported that the 90,473,000 Americans not currently in the labor force marked the first time the figure exceeded the 90 million threshold.

In January 2009, when President Obama first took office, there were 80.5 million Americans 16 years and older not in the labor force, meaning the number of Americans not in the labor force has increased 10 million during his presidency.

For men, the BLS reported the labor force participation rate, the percentage of the population working or considered looking for work, was 63.2 percent in August, basically unchanged from 63.5 percent in July. It’s also a record low.

How low can that number possibly go?

Meanwhile, the quality of our jobs continues to decline rapidly as well. If you can believe it, at this point more than 40 percent of all U.S. workers actually make less than what a full-time minimum wage worker made back in 1968.

As a result, the U.S. middle class is steadily dying. The following is from a recent Yahoo article…

It’s the elephant in the room no one wants to talk about…

The middle class in the U.S. economy is on the verge of collapse. Yes, I said collapse. That social class that once helped the U.S. economy grow and prosper is coming apart. Will the U.S. economy ever be the same without it or is this the new norm?

For much more on this, please see my previous article entitled “44 Facts About The Death Of The Middle Class That Every American Should Know“.

And unfortunately, things look like they may start getting a lot worse for ordinary Americans.

There are a couple of major events which could potentially cause our economic decline to accelerate greatly in September…

#1 Fed Tapering

Right now, there is not much demand for U.S. Treasury bonds. Foreigners have become net sellers of U.S. Treasuries and domestic demand has become quite weak. Without the Federal Reserve buying up tens of billions of dollars worth of U.S. Treasuries each month, where will the demand come from?

That is a very good question. If the Fed starts to taper quantitative easing in September, that is almost certainly going to send bond yields soaring. Already, bond yields have been rising steadily, and if they get too high it is going to be absolutely disastrous for the U.S. economy.

#2 War With Syria

If the U.S. attacks Syria, it will likely cause financial markets all over the planet to descend into chaos and send the price of oil skyrocketing.

And that assumes that the conflict is limited to only the United States and Syria. If Syria decides to retaliate by launching missiles at Israeli cities, that will set off a major regional war in the Middle East and the consequences for the global economy will be off the charts.

So as bad as the U.S. economy is right now, the truth is that things could easily get much, much worse.

Let us hope for the best, but let us also prepare for the worst.

40 Percent Of U.S. Workers Make Less Than What A Full-Time Minimum Wage Worker Made In 1968

August 4, 2013August 4, 2013 by Michael

Are American workers paid enough? That is a topic that is endlessly debated all across this great land of ours. Unfortunately, what pretty much everyone can agree on is that American workers are not making as much as they used to after you account for inflation. Back in 1968, the minimum wage in the United States was $1.60 an hour. That sounds very small, but after you account for inflation a very different picture emerges. Using the inflation calculator that the Bureau of Labor Statistics provides, $1.60 in 1968 is equivalent to $10.74 today. And of course the official government inflation numbers have been heavily manipulated to make inflation look much lower than it actually is, so the number for today should actually be substantially higher than $10.74, but for purposes of this article we will use $10.74. If you were to work a full-time job at $10.74 an hour for a full year (with two weeks off for vacation), you would make about $21,480 for the year. That isn’t a lot of money, but according to the Social Security Administration, 40.28% of all workers make less than $20,000 a year in America today. So that means that more than 40 percent of all U.S. workers actually make less than what a full-time minimum wage worker made back in 1968. That is how far we have fallen.

The other day I wrote an article which discussed the transition that we are witnessing in our economy right now. Good paying full-time jobs are disappearing, and they are being replaced by low paying part-time jobs. So far this year, 76.7 percent of the jobs that have been “created” in the U.S. economy have been part-time jobs.

That would be depressing enough, but what makes it worse is that wages for many of these low paying jobs have actually been declining over the past decade even as the cost of living keeps going up. The following is from a recent USA Today article…

In the years between 2002 and 2012, real median wages dropped by at least 5% in five of the top 10 low-wage jobs, including food preparers and housekeepers.

So where have the good jobs gone?

Well, there are three long-term trends that are absolutely crushing American workers right now.

First of all, thanks to our very foolish politicians American workers have been merged into a global labor pool where they must directly compete for jobs with workers on the other side of the planet that live in countries where it is legal to pay slave labor wages. This has resulted in millions upon millions of good jobs leaving this country. Big corporations can pad their profits by taking a job from an American worker making $15 an hour with benefits and giving it to a worker on the other side of the globe that is willing to work for less than a dollar an hour with no benefits. Our politicians could do something about this, but they refuse to do so. Most of them are absolutely married to the idea of a one world economic system that will unite the globe. Unfortunately, the U.S. economy is going to continue to lose tens of thousands of businesses and millions upon millions of jobs to this one world economic system.

Secondly, big corporations are replacing as many expensive workers with machines, computers and robots as they possibly can. As technology continues to advance at a blistering pace, the need for workers (especially low-skilled workers) will continue to decrease. Unfortunately, the jobs that are being lost to technology are not coming back any time soon.

Thirdly, the overall U.S. economy has been steadily declining for more than a decade. If you doubt this, just read this article. As our economy continues to get weaker, the lack of jobs is going to become a bigger and bigger problem.

And as our economy systematically loses good jobs, more Americans are forced to become dependent on the government.

Back in 1979, there was about one American on food stamps for every manufacturing job. Today, there are about four Americans on food stamps for every manufacturing job.

When I first found that statistic I was absolutely stunned. How in the world can anyone out there deny that the U.S. economy is collapsing?

But as I mentioned above, it isn’t just that the number of jobs is not what it should be. The quality of our jobs is declining as well. For example, one study found that between 1969 and 2009 the wages earned by American men between the ages of 30 and 50 declined by 27 percent after you account for inflation.

That is a pretty stunning decline. And it has only accelerated in recent years. Median household income (adjusted for inflation) has fallen by 7.8 percent since the year 2000, and the ratio of wages and salaries to GDP in the United States is near an all-time record low.

Most Americans are finding that their bills just keep going up but their paychecks are not. This is causing the middle class to wither away, and most families are just trying to survive from month to month at this point. In fact, according to one recent survey 76 percent of all Americans are living paycheck to paycheck.

So where do we go from here?

To some people the answer is simple. They say that we should substantially raise the minimum wage. And yes, that would definitely make life a bit better for lots of low paid workers out there, but it would also have some very negative side effects. A substantially higher minimum wage would mean higher prices at retail stores and restaurants, and it would also greatly increase the incentive that corporations have to replace American workers with foreign workers or with technology. We already have rampant unemployment in this country, and right now there are more than 100 million working age Americans that do not have a job. We certainly don’t want to make that worse.

So raising the minimum wage would not solve our problems. It would just redistribute our problems.

What we really need to do is to return to the principles that once made this country great. In early America, we protected our markets with high tariffs. Access to the U.S. market was a privilege. Foreign domination was kept out, and our economy thrived.

It is definitely not “conservative” and it should not be “liberal” to stand by and watch millions upon millions of our good jobs get shipped over to communist China. We need more “economic patriots” in America today, but unfortunately they appear to be a minority at this point.

And once upon a time the U.S. economy was actually a free market system where rules, regulations and red tape were kept to a minimum. Our nation blossomed under such a system. Sadly, today we have become a nation that literally has millions of laws, rules and regulations. The control freaks seem to run everything. In fact, the Obama administration recently forced one small-time magician out in Missouri to submit a 32 page disaster plan for the little rabbit that he uses in his magic shows for kids. That is a very humorous example, but it is a perfect illustration of how absurd our system has become.

Another thing we could do to turn this around would be to get rid of the IRS and the income tax. Did you know that the greatest period of economic growth in U.S. history was during a time when there was absolutely no income tax? If you doubt this, just read this article.

And of course probably the most important thing that we could do for our economy would be to get rid of the Federal Reserve. The Fed is a massive Ponzi scheme and it has played a primary role in creating almost every single financial bubble in the post-World War II era. Right now we are living in the greatest bond bubble in the history of the planet, and when that Fed-created bubble bursts the pain is going to be absolutely excruciating. In addition, the value of our currency has declined by over 96 percent and the size of the U.S. national debt has gotten more than 5000 times larger since the Fed was created. The Federal Reserve is at the very heart of our economic problems, and we desperately need to shut it down.

Unfortunately, our politicians are not even willing to consider these solutions, and most Americans are way too busy watching Toddlers & Tiaras, Honey Boo Boo and other mindless television programs to be bothered with the real problems that our country is facing.

So needless to say, the great economic storm that is coming is not going to be averted. Most of the country is still asleep, and most people are going to get absolutely blindsided by the economic nightmare that is rapidly approaching.

If You Think The Employment Numbers Are Good, Then You Really Need To Read This Article

August 2, 2013 by Michael

Do you actually believe that the employment numbers are getting better? Do you actually believe that there is a bright future ahead for American workers? If so, then you really need to read this article. The truth is that we are in the midst of the worst employment crisis since the Great Depression, and there has been absolutely no employment recovery. In fact, the percentage of working age Americans that are employed is just about exactly where it was during the darkest days of the last recession. But the mainstream media is not telling you this. The mainstream media is instead focusing on the fact that the official “unemployment rate” declined from 7.6% in June to 7.4% in July. That sounds like great news, but when you take a deeper look at the employment numbers some very disturbing trends emerge.

Over the past several years, almost the entire decline in the unemployment rate can be accounted for by people “leaving the workforce”. The “unemployment rate” has not been going down because people are actually getting jobs. Rather, the “unemployment rate” has been going down because the government has been pretending that millions upon millions of American workers simply do not want jobs anymore. This is extremely misleading.

We are being told that 162,000 jobs were created in July. Okay, so that is just barely enough to keep up with population growth, and most of the jobs that were created last month were part-time jobs.

Meanwhile, the jobs numbers for the two previous months were both revised down…

The change in total nonfarm payroll employment for May was revised from +195,000 to +176,000, and the change for June was revised from +195,000 to +188,000. With these revisions, employment gains in May and June combined were 26,000 less than previously reported.

Will this month eventually be revised down too?

When it comes to measuring employment in the United States, I believe that a much more accurate measurement than the highly manipulated “unemployment rate” is the civilian employment-population ratio. This ratio tells us what percentage of working age Americans actually have a job.

Just prior to the last recession, about 63 percent of all working age Americans had a job. During the recession, that number plunged dramatically and ultimately fell below 59 percent, and it has stayed below 59 percent for 47 months in a row…

This is the first time in the post-World War II era that the employment-population ratio has not bounced back after a recession.

So there has not been an employment recovery. Anyone that tells you that there has been an employment recovery is lying to you.

Since the end of 2009, we have been treading water at best. But during that time, another disturbing trend has emerged. Good paying full-time jobs are rapidly being replaced by low paying part-time jobs.

And this trend has definitely accelerated this year. If you can believe it, an astounding 76.7 percent of the jobs that have been “created” in 2013 have been part-time jobs.

As I wrote about last month, the employment landscape in this country is fundamentally changing. At this point, the number one employer in this country is Wal-Mart, and the number two employer in this country is a temp agency (Kelly Services).

This is a huge reason why the middle class is dying. You simply can’t raise a family on a part-time income.

Our young adults are being hit particularly hard. According to Gallup, the percentage of working age Americans under the age of 30 with a job fell from 47.0% in June 2012 to 43.6% in June 2013…

Fewer Americans aged 18 to 29 worked full time for an employer in June 2013 (43.6%) than did so in June 2012 (47.0%), according to Gallup’s Payroll to Population employment rate. The P2P rate for young adults is also down from 45.8% in June 2011 and 46.3% in June 2010.

When our young people get out of school and enter the real world, they are finding that “good jobs” are few and far between. But unless our young people can find “breadwinner jobs”, they are not going to be able to get married, buy homes and raise families.

A lot of young people are doing their best, but things are really tough out there right now. The lack of good jobs is the primary reason why families that have a head of household under the age of 30 have a poverty rate of 37 percent.

A lot of young adults are coping with this employment crisis by moving back in with their parents. According to one recent study, 36 percent of all young adults in the 18 to 31 age bracket are currently living with their folks.

Are you starting to understand that our system is broken?

The quality of jobs in this country continues to steadily decline. Just consider the following numbers from one of my previous articles…

-The number of part-time workers in the United States has just hit a brand new all-time high, but the number of full-time workers is still nearly 6 million below the old record that was set back in 2007.

-In America today, only 47 percent of adults have a full-time job.

-At this point, one out of every four American workers has a job that pays $10 an hour or less.

-An astounding 53 percent of all American workers make less than $30,000 a year.

And as I mentioned yesterday, until we have a jobs recovery there will be no housing recovery no matter how much the Federal Reserve tries to manipulate the system.

The mainstream media continues to insist that “things are looking up” for the housing market, and yet the home ownership rate in the United States is the lowest that it has been in 18 years.

In order for the middle class to thrive, people have got to be able to get good jobs and people have got to be able to buy homes.

Instead, the percentage of good jobs in our economy continues to shrink, the level of home ownership continues to decline, and less than half of all Americans now consider themselves to be middle class.

The next wave of the economic crisis has not even hit us yet, but we continue to see poverty rates soar all over the nation. In fact, just this week there was an article about the tent cities that are starting to pop up all over New Jersey…

Tent cities have popped up across New Jersey including the state’s poorest city.

Meg Baker chased the story of Camden’s tent city. Residing off Route 38 at Wilson Boulevard under an overpass, through woods and down a path of trash lays a community of people living in tents. This particular community was relocated from Federal Street and it’s inhabited by an array of people: addicts, people who have fallen on hard times and some with mental illness.

Baker took a tour of this run down community and the pictures show just how heart-wrenching this situation really is. Among the homes are decomposing food, broken furniture, and feral cats.

This is supposed to be “the economic recovery”.

If things were going to get “better” it should have happened by now.

But things didn’t get better, and now the next wave of the economic crisis is rapidly approaching.

As I tried to explain the other day, the most important number in our economy is the yield on 10 year U.S. Treasuries. As that number goes up, interest rates all over our economic system go up. And much higher interest rates would be absolutely devastating for our economy.

Unfortunately, many analysts now believe that interest rates are going to go much, much higher than they are right now. Just check out this excerpt from a recent CNBC article…

The Federal Reserve will lose control of interest rates as the “great rotation” out of bonds into equities takes off in full force, according to one market watcher, who sees U.S. 10-year Treasury yields hitting 5-6 percent in the next 18-24 months.

“It is our opinion that interest rates have begun their assent, that the Fed will eventually lose control of interest rates. The yield curve will first steepen and then will shift, moving rates significantly higher,” said Mike Crofton, President and CEO, Philadelphia Trust Company told CNBC on Wednesday.

If interest rates do go that high, our economy simply will not be able to handle that. It would cripple the finances of state and local governments all over the nation, it would absolutely crush the housing market, and it would cause a derivatives crisis unlike anything that we have ever seen before.

The smart money knows that rising interest rates spell big trouble and they are already pulling their money out of the market as a Bloomberg article recently detailed…

Private-equity managers from Fortress Investment Group LLC (FIG) to Blackstone Group LP (BX), which made billions by buying low and selling high, say now is the time to exit investments as stocks rally and interest rates start to rise.

And Apollo Global Management LLC Chief Executive Officer Leon Black said the following back in April…

“It’s almost biblical: there is a time to reap and there’s a time to sow,” Apollo (APO)’s Black said at a conference in April. “We think it’s a fabulous environment to be selling. We’re selling everything that’s not nailed down in our portfolio.”

The smart money is getting out while the getting is good.

They know that a storm is coming.

They know what higher interest rates will do to the economy.

As bad as the employment picture is right now, this is NOTHING compared to what is coming.

This is about as good as things are going to get. It is all downhill from here.

So enjoy this false bubble of pseudo-prosperity while you still can.

When the next great wave of the economic crisis strikes, millions upon millions of Americans are going to lose their jobs and the official unemployment rate is going to soar well up into the double digits.

Worldwide Unemployment Crisis: There Are 93 Million Unemployed Workers In G20 Nations

July 19, 2013July 19, 2013 by Michael

Did you know that the total number of unemployed workers in G20 counties is now up to 93 million and that it is increasing with each passing day? You see, the truth is that the United States is not the only one dealing with a systemic unemployment crisis. This is literally happening all over the planet. So what is causing this crisis? Is there any hope that it will be turned around? Well, unfortunately there are several long-term trends that have been developing for decades that have played a major role in bringing us to this point. First of all, the giant corporations that now totally dominate the global economy have figured out that they can make a lot more money by replacing expensive workers that live in major industrialized nations with workers that live in nations where it is legal to pay slave labor wages. So it isn’t really a huge mystery why there is such a huge problem with unemployment in the western world. If you were running a giant corporation, why would you want to hire workers that will cost you 10 to 20 times as much as other workers? A worker is a worker, and over the past decade we have seen a massive movement of jobs to countries where labor is cheaper. In addition, large corporations are also trying to completely eliminate as many jobs as they can by using technology. If a corporation can get a computer or a machine or a robot to do a task more cheaply than a human worker can do it, then why would that corporation want to continue to rely on human labor? And of course we have seen an overall weakening of the economies of the western world in recent years as well. This has been particularly true in the United States. As these long-term trends intensify, the worldwide unemployment crisis is going to get even worse.

In fact, the director general of the International Labor Organization is fully convinced that unemployment is going to continue to rise in G20 nations. Just check out what he told CNBC on Friday…

Unemployment will likely soar further in the group of 20 major economic powers without immediate action, Guy Ryder, the director general of the International Labor Organization told CNBC on Friday, comparing the jobs crisis to the 2008-2009 financial crisis and warning it needs to be tackled urgently.

“We have gone backwards. It is quite alarming to see…that unemployment has not gone down, in fact it’s gone up,” Ryder told CNBC at the G20 finance ministers’ meeting in Moscow.

He said 93 million people were currently unemployed in the G20.

And when those living in G20 nations lose their jobs, they tend to stay out of work for a very long time. In fact, 30 percent of unemployed workers in G20 countries have been out of work for one year or longer.

Major industrialized nations all over the planet are no longer able to produce enough jobs for their people. In many “wealthy nations” the unemployment rate has already risen well up into double digits. Just consider the following numbers…

-The unemployment rate is above 25 percent in South Africa.

-The unemployment rate in France recently hit a 15 year high.

-The unemployment rate in Italy is up to 12.2 percent, which is the highest in 35 years.

-The unemployment rate in the eurozone as a whole is up to an all-time high of 12.2 percent.

-The unemployment rate in Poland is 13.2 percent.

-The unemployment rate in Ireland is now 13.6 percent.

-The unemployment rate in Portugal has rocketed up to 17.7 percent.

-The unemployment rate in Greece is currently sitting at 26.9 percent and it is being projected that it will soon hit 30 percent.

-The unemployment rate in Spain is even worse than in Greece. The unemployment rate in Spain is a staggering 27.2 percent.

Sadly, it looks like things are not going to be getting better any time soon. In fact, global business confidence is now the lowest that it has been since the last recession.

So what about the United States?

Well, it is true that our official numbers do not look quite as bad as much of the rest of the world. But the official unemployment rate in the U.S. has been at 7.5 percent or higher for 54 months in a row. That is the longest stretch in U.S. history.

But at least it is not in double digits yet.

Things could be worse.

However, that does not mean that we are doing well either.

The mainstream media is attempting to convince us that everything is just fine because the unemployment rate has been “going down”, but when you take a deeper look at the numbers that is not exactly an accurate assessment of our situation.

As the New York Times recently pointed out, the decline in the unemployment rate can almost entirely be accounted for by a decline in the labor participation rate…

Let’s take a step back. Lots of people lost jobs during the Great Recession. In the aftermath, the great surprise has been how few are looking for new jobs. Labor force participation, the share of adults working or trying to find work, has stagnated at about 63.5 percent, almost three percentage points below the pre-recession level.

The unemployment rate has dropped almost entirely because of this decline in labor force participation. In other words, it has not fallen because people are finding jobs. It has fallen because fewer people are looking for jobs.

To get a more accurate picture of what is really happening with employment in America, you need to look at the employment-population ratio. It is a measurement of the percentage of the working age population that is actually working. As you can see, the percentage of working age Americans that actually have a job has been declining since the year 2000…

As you can see, there has been no employment recovery.

When the mainstream media tells you that the employment numbers for June were “great”, that is not being honest. The truth is that the unemployment rate rose in 28 U.S. states and it only declined in 11 states during June, and as I mentioned yesterday, the U.S. economy actually lost 240,000 full-time jobs last month.

So no, things are not getting better, and the unemployment problems in the United States and in Europe are likely going to continue to get worse in the years ahead.

That is very bad news for most of us, because the only thing that most of us have to offer in the marketplace is our labor. If the value that is placed on our labor is continually declining, then that puts us in a very difficult position.

It is almost as if we have all been drafted to play a very twisted game of musical chairs. Each time the music stops, more chairs (jobs) are being pulled out of the game.

You might be doing okay for the moment, but what is going to happen when the music suddenly stops one day and your chair gets pulled out of the game?

That is something that you might want to start thinking about.

Goodbye Full-Time Jobs, Hello Part-Time Jobs, R.I.P. Middle Class

July 15, 2013 by Michael

A fundamental shift is taking place in the U.S. economy. In fact, this transition is rapidly picking up momentum and is in danger of becoming an avalanche. The percentage of full-time jobs in our economy is steadily declining and the percentage of part-time jobs is steadily increasing. This is not a recent phenomenon, but now there are several factors which are accelerating this trend. One of them is Obamacare. The truth is that Obamacare actually gives business owners incentive to cut hours and turn full-time workers into part-time workers, and according to the Wall Street Journal and other prominent publications this is already happening all over the United States. Perhaps this is part of the reasons why the U.S. economy actually lost 240,000 full-time jobs last month.

In a recent article entitled “Restaurant Shift: Sorry, Just Part-Time“, the Wall Street Journal explained the choices that employers are faced with thanks to Obamacare…

The Affordable Care Act requires employers with 50 or more full-time equivalent workers to offer affordable insurance to employees working 30 or more hours a week or face fines. Some companies have said the requirement could increase their costs significantly, although others have played down the potential hit.

The cost for small firms to comply with the health law will depend largely on the number of additional full-time employees that sign up for employer-sponsored coverage. Average annual premiums for employer-sponsored health insurance in 2012 were $5,615 for single coverage and $15,745 for family coverage, according to the Kaiser Family Foundation. That is up from $3,083 and $8,003, respectively, in 2002.

Thankfully the implementation of this aspect of Obamacare was recently delayed, but a lot of employers are saying that it won’t make a difference. They know that it is coming at some point, and so they are already making the changes that they feel they will need to make in order to comply with the law…

Restaurant owners who have already begun shifting to part-time workers say they will continue that pattern.

“Does the delay change anything for us? Absolutely not,” Mr. Adams of Subway said, explaining that whether his health-care costs go up next year or in 2015, he will have to comply with the law. “We won’t start hiring full-time people.”

This is very sad, because we have already been witnessing a steady erosion of “breadwinner jobs” in this country.

It is very, very difficult to support a family if you just have a part-time job or a temp job. But those are the jobs that our economy is producing these days.

In fact, if you can believe it, the second largest employer in the United States is now a temp agency. Kelly Services is actually the second largest employer in the country after Wal-Mart.

Isn’t that crazy?

And full-time employment continues to lag far, far behind part-time employment. The number of part-time workers in the United States recently hit a brand new all-time record high, but the number of full-time workers remains nearly 6 million below the old record that was set back in 2007.

For much more on this, please see my previous article entitled “15 Signs That The Quality Of Jobs In America Is Going Downhill Really Fast“.

At this point, employees are increasingly considered to be expendable “liabilities” that can be dumped the moment that their usefulness is over.

For example, employees at one restaurant down in Florida were recently fired by text message…

It’s bad enough losing your job, but more than a dozen angry employees say they were fired from a central Florida restaurant via text message.

Employees at Barducci’s Italian Bistro said they lost their jobs without notice after the restaurant suddenly closed and are still waiting for their paychecks.

This shift that we are witnessing is fundamentally changing the relationship between employers and employees in the United States. The balance of power has moved very much toward the employers.

Most employers realize that there is intense competition for most jobs these days. If you get tired of your job, your employer can easily go out and find a whole bunch of other people who would be thrilled to fill it.

So why has the balance of power shifted so dramatically?

Well, for one thing we have allowed millions upon millions of good paying jobs to be shipped out of the country. Now American workers literally have to compete for jobs with workers on the other side of the planet that live in nations where it is legal to pay slave labor wages.

This should have never happened, but voters in both major political parties kept voting for politicians that were doing this to us.

Now we all pay the price.

Another factor is the rapid advancement of technology.

These days, businesses are trying use machines, computers and robots to automate just about everything that they can. The following example comes from a recent Business Insider article…

On a windy morning in California’s Salinas Valley, a tractor pulled a wheeled, metal contraption over rows of budding iceberg lettuce plants. Engineers from Silicon Valley tinkered with the software on a laptop to ensure the machine was eliminating the right leafy buds.

The engineers were testing the Lettuce Bot, a machine that can “thin” a field of lettuce in the time it takes about 20 workers to do the job by hand.

The thinner is part of a new generation of machines that target the last frontier of agricultural mechanization — fruits and vegetables destined for the fresh market, not processing, which have thus far resisted mechanization because they’re sensitive to bruising.

So what happens when the big corporations that dominate our economy are able to automate everything?

What will the rest of us do?

How will the middle class survive if they don’t need us to work for them?

Over the past couple of centuries, we have witnessed several fundamental shifts in our economy.

Once upon a time, a very high percentage of Americans worked for themselves. There were millions of farmers, ranchers, small store owners, etc.

But then the industrial revolution kicked in to high gear and big corporations started to gain more power. Millions of Americans went to work for these big corporations, but it was okay because they paid us good wages to work in their factories and the middle class thrived.

Unfortunately, the big corporations have realized that things have changed and that they don’t really need us anymore. They can replace us with technology or with super cheap labor overseas.

So that leaves the rest of us in quite a quandry. Very few of us own our own businesses. In fact, the percentage of self-employed workers in the United States is at an all-time record low. And the number of us that are needed by the monolithic corporations that dominate our system is dropping by the day.

All of this is very bad news for the middle class. The only thing that most of us have to offer is our labor, and the value of our labor is continually declining.

Unless something dramatic happens, the future of the middle class looks very bleak.

The Decline Of Breadwinner Jobs Has Resulted In The Longest Bread Lines In American History

July 9, 2013July 9, 2013 by Michael

As the number of good jobs continues to decline, the number of Americans that cannot take care of themselves without government assistance continues to explode. On Friday, we learned that the U.S. economy added “195,000 jobs” last month. But when you look deeper at the numbers, another story emerges. Last month, the U.S. economy actually lost 240,000 full-time jobs. Overall, the U.S. economy has only added 130,000 full-time jobs in 2013, but it takes about 90,000 full-time jobs a month just to keep up with population growth. So we are losing quite a bit of ground as far as full-time jobs are concerned. Meanwhile, the U.S. economy has added more than 500,000 part-time jobs so far this year. Unfortunately, there are very, very few part-time and temp jobs that can be considered “breadwinner jobs”. Part-time jobs are great for teenagers, university students and elderly people that only want to work a limited number of hours, but what most Americans need are good paying full-time jobs with benefits that will allow them to take care of their families. Unfortunately, those jobs are continually becoming a smaller part of our economy.

As David Stockman has noted, the U.S. economy has only regained 200,000 of the 5.6 million breadwinner jobs that were lost during the last recession…

By September 2012, the S&P 500 was up by 115 percent from its recession lows and had recovered all of its losses from the peak of the second Greenspan bubble. By contrast, only 200,000 of the 5.6 million lost breadwinner jobs had been recovered by that same point in time. To be sure, the Fed’s Wall Street shills breathlessly reported the improved jobs “print” every month, picking and choosing starting and ending points and using continuously revised and seasonally maladjusted data to support that illusion. Yet the fundamentals with respect to breadwinner jobs could not be obfuscated.

This is a big problem. As I wrote about the other day, the quality of jobs in America is falling very fast. Only 47 percent of all adults in the United States have a full-time job at this point, and 53 percent of all American workers make less than $30,000 a year.

Meanwhile, the number of part-time jobs has hit an all-time record high, and the number of temp jobs is absolutely exploding.

Incredibly, the number of temp jobs has increased by more than 50 percent since the end of the recession. Approximately 10 percent of the jobs lost during the last recession were temp jobs, but close to 20 percent of the jobs gained since then have been temp jobs.

We are witnessing a fundamental shift in our economy. Full-time jobs are on the decline. Part-time and temp jobs are on the rise.

In fact, the second largest employer in the United States is now a temp agency. Kelly Services has become the second largest employer in the country after Wal-Mart.

But it is really hard to pay the bills stocking shelves at Wal-Mart or working temp jobs for Kelly Services.

Unfortunately, these days millions of American workers find themselves having to take whatever they can find. We live during a period of chronic unemployment. In fact, according to John Williams of shadowstats.com, unemployment in the United States is now higher than it was at any point during the last recession after you factor in discouraged workers and workers that have taken part-time jobs for economic reasons.

So why don’t more Americans go out and start businesses and create their own jobs?

Unfortunately, thanks to the federal government, state governments and local governments, the environment for small businesses in America today is incredibly toxic. In fact, the percentage of self-employed workers in this country is at an all-time record low.

As a result of everything that I have discussed above, more Americans than ever find that they cannot take care of themselves without government assistance.

I have often written about the fact that the number of Americans on food stamps has skyrocketed in recent years. In the year 2000, there were only 17 million Americans on food stamps. Today, there are more than 47 million Americans on food stamps.

But the number of Americans that are dependent on our “modern day bread lines” is actually far higher than that.

According to a recent CNS News article, a total of 101 million Americans are enrolled in food assistance programs. The following are some of the staggering numbers for some of these programs…

The National School Lunch program provides 32 million students with low-cost or no-cost meals daily; 10.6 million participate in the School Breakfast Program; and 8.9 million receive benefits from the Woman, Infants and Children (WIC) program each month, the latter designed for low-income pregnant, breastfeeding, and postpartum women, as well as children younger than 5 years old.

In addition, 3.3 million children at day care centers receive snacks through the Child and Adult Care Food Program.

There’s also a Special Milk Program for schools and a Summer Food Service Program, through which 2.3 million children received aid in July 2011 during summer vacation.

At farmer’s markets, 864,000 seniors receive benefits to purchase food and 1.9 million women and children use coupons from the program.

Yes, there is some overlap in some of these programs. So the actual number of Americans receiving food assistance is going to be less than 101 million.

But clearly something has gone horribly wrong. Our economy is not producing enough good jobs, and more Americans than ever cannot take care of themselves as a result.

This is not normal. What we are witnessing is the slow-motion collapse of the middle class. The number of Americans that are dependent on the government for their daily bread is so large that it is difficult to comprehend. The following are a few statistics from my recent article entitled “21 Facts About Rising Government Dependence In America That Will Blow Your Mind“…

-Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps.

-Today, the number of Americans on food stamps exceeds the entire population of the nation of Spain.

-According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”

You can read the rest of that article right here.

So what is the solution?

Well, we need a lot more full-time “breadwinner jobs” that will enable men and women to be able to take care of their families.

Unfortunately, we continue to ship millions of good jobs overseas, and our politicians continue to pursue policies which are making the business environment in this country very toxic.

There is not going to be any easy way to fix all of this. We should have seen a nice bounce in the employment numbers during this so-called “recovery”, but that did not happen. And now the next wave of the economic collapse is rapidly approaching, and the employment crisis in this country is going to become a lot more painful.

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