Unemployment

15 Signs That The Quality Of Jobs In America Is Going Downhill Really Fast

July 7, 2013July 7, 2013 by Michael

Trying to find a job in America today can be an incredibly frustrating experience. Most of the jobs that are available seem to pay very little, and there is intense competition for just about any job that is open. But it wasn’t always like this. When I was in high school, I was immediately hired when I applied for a job at McDonalds because they were so desperate for workers that they would hire just about anyone that could flip a burger. But in this economic environment, a single nationwide hiring event conducted by McDonalds resulted in a million job applications, and only a small percentage of those applicants were actually hired. Our economy simply does not produce enough jobs for everyone anymore, and the percentage of “good jobs” continues to decline. That means that it is getting really hard to find a job that will enable you to support a family, and a lot of people end up doing jobs that they are massively overqualified for. But when times are tough, people are going to do what they have to do in order to survive.

One thing that we have seen in recent years is an explosion in the number of “temp workers” in America. Even some of the largest companies in America are using them. They like the flexibility of being able to bring in workers when they need them and of being able to dump them the moment they don’t need them anymore. Sadly, those that work in the “temp industry” often work in deplorable conditions for very little pay. The following is a brief excerpt from an absolutely outstanding Pro Publica article…

In cities all across the country, workers stand on street corners, line up in alleys or wait in a neon-lit beauty salon for rickety vans to whisk them off to warehouses miles away. Some vans are so packed that to get to work, people must squat on milk crates, sit on the laps of passengers they do not know or sometimes lie on the floor, the other workers’ feet on top of them.

This is not Mexico. It is not Guatemala or Honduras. This is Chicago, New Jersey, Boston.

The people here are not day laborers looking for an odd job from a passing contractor. They are regular employees of temp agencies working in the supply chain of many of America’s largest companies – Walmart, Macy’s, Nike, Frito-Lay. They make our frozen pizzas, sort the recycling from our trash, cut our vegetables and clean our imported fish. They unload clothing and toys made overseas and pack them to fill our store shelves. They are as important to the global economy as shipping containers and Asian garment workers.

Many get by on minimum wage, renting rooms in rundown houses, eating dinners of beans and potatoes, and surviving on food banks and taxpayer-funded health care. They almost never get benefits and have little opportunity for advancement.

But these are the types of jobs the U.S. economy is “creating” these days. Low paying part-time jobs are continually becoming a bigger part of the economy. This is one of the primary reasons why the middle class in America is shrinking.

You can’t support a family on what most of these part-time jobs pay. But our economy is not producing many high quality full-time jobs these days. The average quality of American jobs just continues to sink.

The following are 15 signs that the quality of jobs in America is going downhill really fast…

#1 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.

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

#3 Even though the U.S. economy created nearly 200,000 jobs in June, the number of full-time jobs actually decreased.

#4 There are now 2.7 million temp workers in the United States – a new all-time high.

#5 One out of every ten jobs in the United States is now filled through a temp agency.

#6 The U.S. economy has actually lost manufacturing jobs for four consecutive months.

#7 The official unemployment rate has been at 7.5 percent or higher for 54 months in a row. That is the longest stretch in U.S. history.

#8 According to one recent survey, 76 percent of all Americans are living paycheck to paycheck.

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

#10 High paying manufacturing jobs continue to be shipped overseas. Sadly, there are fewer Americans employed in manufacturing now than there was in 1950 even though the population of the country has more than doubled since then.

#11 Today, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.

#12 The U.S. economy continues to trade good paying jobs for low paying jobs. 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.

#13 Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.

#14 At this point, an astounding 53 percent of all American workers make less than $30,000 a year.

#15 According to a study that was released by the Center for Economic and Policy Research, only 24.6 percent of all jobs in the United States qualify as “good jobs” at this point. In a previous article, I detailed the three criteria that they used to define what a “good job” is….

#1 The job must pay at least $18.50 an hour. According to the authors, that is the equivalent of the median hourly pay for American workers back in 1979 after you adjust for inflation.

#2 The job must provide access to employer-sponsored health insurance, and the employer must pay at least some portion of the cost of that insurance.

#3 The job must provide access to an employer-sponsored retirement plan.

All of this is absolutely heartbreaking.

Once upon a time, just about any adult that was willing to work hard in America could go out and find a good paying job that would support a middle class lifestyle.

Now those days are gone forever.

But different conditions exist in different parts of the country.

What are you seeing in your area?

Are good jobs difficult to find?

Please feel free to share your thoughts by posting a comment below…

Economic Bizarro World: Persistently High Unemployment And Skyrocketing Bond Yields Are Good?

July 5, 2013 by Michael

The mainstream media is heralding today’s “fantastic” employment numbers as evidence that the U.S. economy is steadily recovering. But is that really true? The number of jobs created in June was just a little bit more than what is required to keep up with population growth, and the official unemployment rate remained at 7.6 percent. And if you look deeper in the numbers, they don’t look very good at all. The percentage of low paying part-time jobs in the economy continues to rise, the number of full-time jobs actually decreased and the U-6 unemployment number jumped from 13.8% in May to 14.3% in June. That is a stunning increase. And if the labor participation rate in this country was at the level it was at prior to the last recession, the official unemployment rate would be sitting at 11.1%. But according to the mainstream media, all of this is wonderful news. It is like we are in some sort of economic bizarro world where bad is good and down is up.

When the jobs numbers were released on Friday, Business Insider breathlessly declared that it “was jobs day in America, and America crushed expectations.”

USA Today ran an article on the jobs numbers with the following headline: “First Take: As job gains grow, optimism rises“.

But should we really be celebrating?

Posted below is a chart that shows the percentage of working age Americans with a job since the beginning of the year 2000. This chart does include the jobs numbers that were released on Friday…

Can you see a “recovery” in there somewhere?

Am I missing something?

Let me look again. This time I will squint really hard.

Nope – I still can’t see a recovery.

For three and a half years we have been stuck in a range between 58 percent and 59 percent. We are way, way below where we were before the recession.

So can we please not even begin to use the word “recovery” until we at least get above the 59 percent level?

And most of the jobs that are being created are of very poor quality. As I mentioned above, the figures show that the number of full-time jobs actually decreased last month. And as Zero Hedge pointed out, manufacturing employment has actually declined for four months in a row…

Even as the manufacturing jobs continue to collapse, posting their fourth consecutive monthly drop in June to 11.964 million jobs, minimum wage waiters and bartenders have never been happier. In June Restaurant and Bar employees just hit a new all time high of 10,339,800 workers, increasing by a whopping 51,700 in one month.

Things are pretty good in America right now if you want to flip burgers or wait tables. But if you want a good job that you can support a family with, things are getting even worse.

Meanwhile, bond yields soaring into the stratosphere.

The yield on 10 year U.S. Treasuries absolutely exploded today. It opened at 2.50% and closed at 2.71%. When I saw what had happened I could hardly believe it.

If bond yields continue to climb like this, it is going to cause some massive problems in the financial markets. The following is from an article by John Rubino…

A few things to look for: recalculations of the deficit in light of spiking interest costs, comparisons of US and Japanese yields and speculation about what this means for Japanese rates — followed by dire analyses of Japan’s future borrowing costs — and last but not least, a growing concern for the hundreds of trillions of dollars of interest rate derivatives that now have one counterparty deeply in the red.

Most Americans don’t think too much about bond yields, but if they keep spiking it is going to dramatically affect every man, woman and child in the entire country.

Yesterday, I described some of the consequences that rapidly rising bond yields would have…

And if interest rates on U.S. Treasury bonds start to rise to rational levels, the U.S. government is going to have to pay more to borrow money, state and local governments are going to have to pay more to borrow money, junk bonds will crash, the market for home mortgages will shrivel up and economic activity in this country will slow down substantially.

Plus, as I am fond of reminding everyone, there is a 441 trillion dollar interest rate derivatives time bomb sitting out there that rapidly rising interest rates could set off.

Never before have we had anything like the gigantic derivatives bubble that is hanging over global financial markets like a sword of Damocles.

As interest rates continue to go up, the derivatives bubble could burst at any time. When it does, we are going to see financial carnage unlike anything we have ever seen before.

2008 was just the warm up act. What is coming next is going to be the main event.

But in the economic bizarro world that we are living in, the mainstream media insists that skyrocketing interest rates are nothing to worry about.

Today, USA Today ran a headline that declared the following: “Investors: Don’t panic over bond yield spike“.

And Yahoo actually ran a story entitled “Why higher U.S. yields should cheer investors“. Needless to say, the arguments in that story are not very convincing.

And in that story they even admit that record amounts of money were being pulled out of bond funds in June…

Capital is already flowing out of low-yielding bonds. PIMCO Total Return fund, the world’s largest bond fund, suffered record outflows of $9.6 billion in June, in a second straight month of withdrawals.

Mutual and exchange-traded bond funds lost a record $79.8 billion in June, according to TrimTabs Investment Research.

The rush for the exits in the bond market is threatening to become an avalanche.

I hope that this is not the beginning of a financial panic. I hope that we have more time before the next major wave of the economic collapse strikes.

But I certainly cannot guarantee that things will remain stable. Once fear starts to sweep through financial markets, things can change very, very quickly.

36 Hard Questions About The U.S. Economy That The Mainstream Media Should Be Asking

June 30, 2013 by Michael

If the economy is improving, then why aren’t things getting better for most average Americans? They tell us that the unemployment rate is going down, but the percentage of Americans that are actually working is exactly the same it was three years ago. They tell us that American families are in better financial shape now, but real disposable income is falling rapidly. They tell us that inflation is low, but every time we go shopping at the grocery store the prices just seem to keep going up. They tell us that the economic crisis is over, and yet poverty and government dependence continue to explode to unprecedented heights. There seems to be a disconnect between what the government and the media are telling us and what is actually true. With each passing day the debt of the federal government grows larger, the financial world become even more unstable and more American families fall out of the middle class. The same long-term economic trends that have been eating away at our economy like cancer for decades continue to ruthlessly attack the foundations of our economic system. We are rapidly speeding toward an economic cataclysm, and yet the government and most of the media make it sound like happy days are here again. The American people deserve better than this. The American people deserve the truth. The following are 36 hard questions about the U.S. economy that the mainstream media should be asking…

#1 If the percentage of working age Americans that have a job is exactly the same as it was three years ago, then why is the government telling us that the “unemployment rate” has gone down significantly during that time?

#2 Why are some U.S. companies allowed to exploit disabled workers by paying them as little as 22 cents an hour?

#3 Why are some private prisons allowed to pay their prisoners just a dollar a day to do jobs that other Americans could be doing?

#4 Why is real disposable income in the United States falling at the fastest rate that we have seen since 2008?

#5 Why do 53 percent of all American workers make less than $30,000 a year?

#6 Why are wages as a percentage of GDP at an all-time low?

#7 Why are 76 percent of all Americans living paycheck to paycheck?

#8 Why are so many large corporations issuing negative earnings guidance for this quarter? Does this indicate that the economy is about to experience a significant downturn?

#9 Why is job growth at small businesses at about half the level it was at when the year started?

#10 Why are central banks selling off record amounts of U.S. debt right now?

#11 Why did U.S. mortgage bonds just suffer their biggest quarterly decline in nearly 20 years?

#12 Why did we just witness the largest weekly increase in mortgage rates in 26 years?

#13 Why has the number of mortgage applications fallen by 29 percent over the last eight weeks?

#14 Why has the number of mortgage applications fallen to the lowest level in 19 months?

#15 If the U.S. economy is recovering, why is the mortgage delinquency rate in the United States still nearly 10 percent?

#16 Why did the student loan delinquency rate in the United States just hit a brand new all-time high?

#17 Why is the sale of hundreds of millions of dollars of municipal bonds being postponed?

#18 What are the central banks of the world going to do when the 441 trillion dollar interest rate derivatives bubble starts to burst?

#19 Why is Barack Obama secretly negotiating a new international free trade agreement that will impose very strict Internet copyright rules on all of us, ban all “Buy American” laws, give Wall Street banks much more freedom to trade risky derivatives and force even more domestic manufacturing offshore?

#20 Why don’t our politicians seem to care that the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975?

#21 Why doesn’t the mainstream media talk about how rapidly the U.S. economy is declining relative to the rest of the planet? According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number dropped to 21.6 percent in 2011.

#22 Why is the percentage of self-employed Americans at a record low?

#23 What are we going to do if dust bowl conditions continue to return to the western half of the United States? If the drought continues to get even worse, what will that do to our agriculture?

#24 Why is the IRS spending thousands of taxpayer dollars on kazoos, stove top hats, bathtub toy boats and plush animals?

#25 Why did the NIH spend $253,800 “to study ways to educate Boston’s male prostitutes on safe-sex practices”?

#26 Why do some of the largest charities in America spend less than 5 percent of the money that they bring in on actual charitable work?

#27 Now that EU finance ministers have approved a plan that will allow Cyprus-style wealth confiscation as part of all future bank bailouts in Europe, is it only a matter of time before we see something similar in the United States?

#28 Why does approximately one out of every three children in the United States live in a home without a father?

#29 Why are more than a million public school students in the United States homeless?

#30 Why are so many cities all over the United States passing laws that make it illegal to feed the homeless?

#31 Why is government dependence in the U.S. at an all-time high if the economy is getting better? Back in 1960, the ratio of social welfare benefits to salaries and wages was approximately 10 percent. In the year 2000, the ratio of social welfare benefits to salaries and wages was approximately 21 percent. Today, the ratio of social welfare benefits to salaries and wages is approximately 35 percent.

#32 Why does the number of Americans on food stamps exceed the entire population of the nation of Spain?

#33 The number of Americans on food stamps has grown from 32 million to 47 million while Barack Obama has been occupying the White House. So why is Obama paying recruiters to go out and get even more Americans to join the program?

#34 Today, there are 56 million Americans collecting Social Security benefits. In 2035, there will be 91 million Americans collecting Social Security benefits. Where in the world will we get the money for that?

#35 Why has the value of the U.S. dollar fallen by over 95 percent since the Federal Reserve was created back in 1913?

#36 Why has the size of the U.S. national debt gotten more than 5000 times larger since the Federal Reserve was created back in 1913?

10 Amazing Charts That Demonstrate The Slow, Agonizing Death Of The American Worker

May 16, 2013 by Michael

The middle class American worker is in danger of becoming an endangered species. The politicians are not telling you the truth, and the mainstream media is certainly not telling you the truth, but the reality is that there is nothing but bad news on the horizon for workers in the United States. In the old days, when the big corporations that dominate our society did well, that also meant good things for American workers since those corporations would need more of us to work for them. But in the emerging one world economic system that our economy is being merged into, those corporations have other choices now. For instance, the big corporations can now choose to limit the number of “expensive” American workers that they employ by shipping millions of jobs to the other side of the world. And from their perspective, it makes perfect sense. They can make much bigger profits by hiring people on the other side of the planet to work for them for less than a dollar an hour. If they can get good production out of those people, then why should they hire Americans for ten to twenty times as much, plus have to give those Americans health insurance and other benefits? Another major factor in the slow, agonizing death of the American worker is technology. We live during a period when technology is advancing at a pace that is almost unimaginable at the same time that it is steadily becoming cheaper and cheaper. That means that it is going to become easier and easier for companies to replace workers with robots and computers. As I have written about previously, it is being projected that our economy will lose millions of jobs to technology in the coming years. Yes, some of us will still be needed to help build the robots and the computers, but not all of us will. And of course the overall general weakness of the economy is not helping matters either. The American people inherited the greatest economic machine in the history of the world, and we have wrecked it. Decades of very foolish decisions have resulted in the period of steady economic decline that we are experiencing now.

America is simply not the economic powerhouse that it once was. Back in 2001, the U.S. economy accounted for 31.8 percent of global GDP. By 2011, the U.S. economy only accounted for 21.6 percent of global GDP. That is a collapse any way that you want to look at it.

Today, American workers are living in an economy that is rapidly declining, and their jobs are steadily being stolen by robots, computers and foreign workers that live in countries where it is legal to pay slave labor wages. Politicians from both political parties refuse to do anything to stop the bleeding because they think that the status quo is working just great.

So don’t expect things to get better any time soon.

The following are 10 amazing charts that demonstrate the slow, agonizing death of the American worker…

#1 Wages And Salaries As A Percentage Of GDP

As you can see, wages as a percentage of GDP are hovering near an all-time record low. That means that American workers are bringing home a smaller share of the economic pie than ever before.

#2 Average Annual Hours Worked Per Employed Person In The United States

We are an economy that is rapidly trading good paying full-time jobs for low paying part-time jobs. The decline in average annual hours worked that we have witnessed represents the equivalent of losing millions of jobs. There has been an explosion of “the working poor” in the United States, and this trend is probably only going to accelerate in the years to come.

#3 Manufacturing Employment

As you can see, there are less Americans working in manufacturing today than there was in 1950 even though the population of the country has more than doubled since then. The United States has lost more than 56,000 manufacturing facilities since 2001, and yet our politicians stand around and do nothing about it.

#4 Employment-Population Ratio

This is one of my favorite charts. It shows that there has been absolutely no employment recovery at all since the end of the last recession. The percentage of working age Americans that have a job has stayed under 59 percent for 44 months in a row. How much worse will things get when the next major economic downturn strikes?

#5 Labor Force Participation Rate

This is how the Obama administration is getting the “unemployment rate” to magically go down. They are pretending that millions upon millions of Americans simply do not want to work anymore. As you will notice, the decline of the labor force participation rate has accelerated greatly since Barack Obama entered the White House.

#6 Duration Of Unemployment

The average amount of time that it takes an unemployed worker to find a new job has declined slightly, but it is still far above normal historical levels. It is a crying shame that it takes the average unemployed worker two-thirds of a year to find a new job, but this is the new economic reality that we are all living in.

#7 Delinquency Rate On Residential Mortgages

Since there are not enough jobs for all of us, and since our wages are not rising as rapidly as the cost of living is, a whole bunch of us are falling behind on our mortgages. As you can see, the mortgage delinquency rate has only dropped slightly and is still way, way above typical levels.

#8 New Homes Sold

American workers also don’t have enough money to go out and buy new homes either. Yes, new home sales have rebounded slightly this year, but we are nowhere near where we used to be.

#9 Consumer Credit

Millions of American families continue to resort to going into debt in a desperate attempt to make ends meet. After a slight interruption during the last recession, consumer credit once again is growing at a frightening pace.

#10 Self-Employment At A Record Low

Since there aren’t enough jobs for everyone, why aren’t more Americans trying to start their own businesses? Well, the reality of the matter is that the government has made it exceedingly difficult to start your own business today. Taxes, rules, regulations and red tape are choking the life out of millions of small businesses in the United States. As a result, the percentage of self-employed Americans is at a record low.

As all of these long-term trends continue, the middle class will continue to shrink, poverty in America will continue to explode and government dependence will continue to rise.

The numbers don’t lie. Today, the number of Americans on Social Security Disability now exceeds the entire population of Greece, and the number of Americans on food stamps now exceeds the entire population of Spain.

We are in the midst of a horrifying economic collapse, and the next major wave of that collapse is rapidly approaching.

Are you ready?

Where Is The Recovery? A Higher Percentage Of Americans Had Jobs Three Years Ago

May 5, 2013May 3, 2013 by Michael

If you think that the latest employment numbers are good news, you might want to look again. In April 2013, 58.6 percent of all working age Americans had a job. But three years ago, in April 2010, 58.7 percent of all working age Americans had a job. Well, you may argue, that is not much of a difference. And that is precisely my point. The percentage of Americans that have a job fell like a rock during the last recession. It dropped from about 63 percent all the way down to below 59 percent, and it has stayed below 59 percent for 44 months in a row. So where is the recovery? This is the first time in the post-World War II era that the employment-population ratio has not bounced back after the end of a recession. So anyone that tells you that we are experiencing an employment recovery is lying to you. Yes, the U.S. economy added 165,000 jobs last month. But it takes nearly that many jobs just to keep up with population growth. The truth is that we are just treading water.

So why has the unemployment rate been going down? Well, it is because the government has been pretending that millions upon millions of unemployed Americans “don’t want jobs” anymore. In fact, an astounding 9.5 million Americans have “left the workforce” since Barack Obama took office.

Some in the mainstream media have started calling them “missing workers”. But whatever label you want to use, the reality of the matter is that they are really hurting. They are part of the reason why food stamp enrollment has soared from 32 million to more than 47 million while Barack Obama has been in the White House.

If you still believe that the employment market is getting better, just look at the following numbers. The percentage of working age Americans with a job has been sitting at about the same level for four years in a row…

April 2008: 62.7 percent

April 2009: 59.8 percent

April 2010: 58.7 percent

April 2011: 58.4 percent

April 2012: 58.5 percent

April 2013: 58.6 percent

So why is everyone getting so excited over the latest numbers? When you step back and look at what has happened to the employment-population ratio over the past decade it really is quite horrifying…

So exactly what part of that chart are we supposed to get excited about?

Yes, I suppose that we should be thankful that the percentage of Americans with a job has not continued to decline over the past few years. Unfortunately, the next major wave of the economic collapse is rapidly approaching and that is going to make our employment crisis far worse.

A recovery was supposed to already happen by now. Now we are running out of time before the next major downturn strikes.

And things have been particularly hard for our young people. Even if our young people do go to college, there is a very good chance that good jobs will not be waiting for them once they graduate.

According to Accenture’s 2013 College Graduate Employment Survey, 41 percent of all Millennials who graduated from college during the past two years are working in jobs that actually do not require a college degree.

And a different survey conducted a while back found that 53 percent of all college graduates under the age of 25 are either unemployed or underemployed.

Perhaps you have noticed this. Perhaps you have noticed that there seems to be large numbers of young people that are living with their parents or that can’t seem to get their lives started.

It is because the economy is not producing enough jobs for them.

We have shipped millions of good jobs overseas, we have replaced millions of jobs with technology, and we have created an economic environment that is murdering our small businesses.

Sadly, the future does not look bright for the American worker. The big corporations that dominate our society are feverishly trying to increase profits by getting rid of as many “expensive” American workers as possible. That is one of the reasons why corporate profits as a percentage of GDP are at a record high, but wages as a percentage of GDP are at an all-time low.

At this point there are more than 101 million working age Americans that do not have a job, and that number is going to go a lot higher in the years ahead.

But the financial markets seem to be absolutely thrilled with the present state of affairs. The latest employment numbers caused the Dow to shoot past 15,000 and the S&P 500 to push past 1600.

Of course stocks have become completely and totally divorced from economic reality, but this does happen from time to time and it never lasts forever. At some point there will be a rude awakening.

And I anticipated that we could potentially see the Dow hit 15,000 before it finally crashed. Back in February, I made the following statement…

Right now, everyone seems to be quite giddy about the fact that the Dow is marching toward an all-time high. And I actually do believe that the Dow will blow right past it. In fact, it is even possible that we could see the Dow hit 15,000 before everything starts falling apart.

Well, now we have seen the Dow hit 15,000. But that doesn’t change any of the long-term trends that are absolutely eviscerating our economy.

So enjoy this bubble of false hope while you can.

It will not last much longer.

They Are Murdering Small Business: The Percentage Of Self-Employed Americans Is At A Record Low

May 5, 2013May 2, 2013 by Michael

The percentage of Americans that are working for themselves has never been lower in the history of the United States. Once upon a time, the United States was a paradise for entrepreneurs and small businesses, but now the control freak bureaucrats that dominate our society have created a system that absolutely eviscerates them. This is very unfortunate, because by murdering small business, the bureaucrats are destroying the primary engine of job growth in this country. One of the big reasons why there are not enough jobs in America today is because small business creation is way down. As I mentioned yesterday, entrepreneurs and small businesses are being absolutely devastated by rules, regulations, red tape and by oppressive levels of taxation. If anyone doubts that small business in the United States is dying, just look at the charts below. Sadly, this is what the bureaucrats that run things want. They don’t want us to be independent of the system. Instead, they are much more comfortable when as many of us as possible are heavily dependent on the system in one way or another. If all of us have to go running to the government or to one of the big corporations for a job, then we are much easier to control. But as the control freaks continue to construct their bureaucratic utopia, they are also killing off what once made the U.S. economy so great.

The other day I came across the following two charts in an article by Charles Hugh Smith, and I was absolutely stunned by what I saw. This first chart shows that the number of unincorporated self-employed Americans has dropped back to levels that we have not seen since the mid-1980s even though our population has increased by tens of millions of people since that time…

As you can see, from 1970 to the mid-1990s the number of unincorporated self-employed Americans rose steadily. But in the mid-1990s it began to level off and now it is falling rapidly.

This next chart shows the percentage of self-employed Americans as a share of non-farm employment. In other words, those that work on farms are excluded from this chart. The percentage of self-employed Americans was fairly stable between 1970 and 1990, but since 1990 it has been steadily eroding and it has now reached a level never seen before…

At this point, only about 7 percent of non-farm workers are self-employed. That is depressingly low. That means that an overwhelming majority of those that are employed in America are working for the system in one capacity or another.

But isn’t that what we pound into the heads of our children these days? We teach them to work hard in school so that they can “get a good job” when they grow up. From a very early age we train our children to plug themselves into the system.

Not that working for someone else is wrong. Of course not. It is just that we are not fostering a spirit of entrepreneurship in America today. In fact, we seem to be doing everything that we can to kill it off.

In a previous article, I detailed how the number of new businesses (and the number of jobs those businesses create) has been steadily declining. In particular, this decline has accelerated dramatically under the Obama administration. According to an analysis of U.S. Department of Labor data performed by economist Tim Kane, the following is how the decline in the number of startup jobs per 1000 Americans breaks down by presidential administration…

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

Is that a good trend or a bad trend?

It doesn’t take an advanced degree in economics to figure out where things are going.

Kane speculated about why we are witnessing such a decline in his paper…

There is anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment. At the federal level, high taxes and higher uncertainty about taxes are undoubtedly inhibiting entrepreneurship, but to what degree is unknown. The dominant factor may be new regulations on labor. The passage of the Affordable Care Act is creating a sweeping alteration of the regulatory environment that directly changes how employers engage their workforces, and it will be some time until those changes are understood by employers or scholars. Separately, there has been a federal crackdown since 2009 by the Internal Revenue Service on U.S. employers that hire U.S. workers as independent contractors rather than employees, raising the question of mandatory benefits. New firms tend to use part-time and contract staffing rather than full-time employees during the startup stage. According to Labor Department data, the typical American today only takes home 70 percent of compensation as pay, while the rest is absorbed by the spiraling cost of benefits (e.g., health insurance). The dilemma for U.S. policy is that an American entrepreneur has zero tax or regulatory burden when hiring a consultant/contractor who resides abroad. But that same employer is subject to paperwork, taxation, and possible IRS harassment if employing U.S.-based contractors. Finally, there has been a steady barrier erected to entrepreneurs at the local policy level. Brink Lindsey points out in his book Human Capitalism that the rise of occupational licensing is destroying startup opportunities for poor and middle class Americans.

In my previous article, I also pointed out some of the other statistics that show that small business in America is dying…

-According to the U.S. Census Bureau, the U.S. economy lost more than 220,000 small businesses during the last recession.

-As a share of the population, the percentage of Americans that are self-employed fell by more than 20 percent between 1991 and 2010.

-As a share of the population, the percentage of “new entrepreneurs and business owners” dropped by a staggering 53 percent between 1977 and 2010.

Unfortunately, this is a crisis that has taken decades to develop and that there are not any easy solutions for. But there are certain factors that should be addressed immediately. The following are some of the things that are contributing to the murder of self-employment and small business in America…

#1 Taxes: The IRS seems to especially enjoy tormenting entrepreneurs and small businesses. In fact, things have gotten so bad that even late night talk show hosts are joking about it. Recently, NBC Tonight Show host Jay Leno joked that if Barack Obama really wanted to close down Guantanamo Bay, he should “do what he always does: declare it a small business and tax it out of existence”

#2 Ridiculous Regulations: If you have ever tried to start a small business, you probably know how frustrating it can be dealing with government red tape. In particular, the federal government has burdened our small businesses with gigantic mountains of rules and regulations and it gets worse with each passing day.

#3 State Governments That Are Openly Hostile To Business: A perfect example of this is the state of California. In 2011, the state of California ranked 50th out of all 50 states in new business creation, and yet they just continue to pass more legislation that hurts small businesses.

#4 Obamacare: Our broken healthcare system is a tremendous burden on small businesses, and Obamacare is going to make things much worse.

#5 The One World Trade Agenda: In many industries, U.S. small businesses simply cannot compete against products made by workers that are being paid slave labor wages on the other side of the globe.

#6 Predator Corporations: Time after time we have seen corporate giants extract huge tax breaks and other enormous concessions from local officials which give them an overwhelming advantage. But once the corporate giant moves into town, many of the existing small businesses find that they cannot compete and are forced to shut down.

#7 Our Corrupt Political System: On the national level, elections are almost always won by the politician that raises the most money. Our politicians know that their careers depend on raising money, so they tend to be very good to those that they get big money from. There is a reason why big corporations spend billions of dollars on campaign contributions and lobbying. They do it because it works. Over the decades, the big corporations have been able to shift the rules of the game massively in their favor, and this has been to the detriment of entrepreneurs and small businesses.

Can you think of any other factors that you would add to this list? Please feel free to share your opinion by leaving a comment below…

More Than 101 Million Working Age Americans Do Not Have A Job

April 7, 2013April 7, 2013 by Michael

The jobs recovery is a complete and total myth. The percentage of the working age population in the United States that had a job in March 2013 was exactly the same as it was all the way back in March 2010. In addition, as you will see below, there are now more than 101 million working age Americans that do not have a job. But even though the employment level in the United States has consistently remained very low over the past three years, the Obama administration keeps telling us that unemployment is actually going down. In fact, they tell us that the unemployment rate has declined from a peak of 10.0% all the way down to 7.6%. And they tell us that in March the unemployment rate fell by 0.1% even though only 88,000 jobs were added to the U.S. economy. But it takes at least 125,000 new jobs a month just to keep up with population growth. So how in the world are they coming up with these numbers? Well, the reality is that the entire decline in the unemployment rate over the past three years can be accounted for by the reduction in size of the labor force. In other words, the Obama administration is getting unemployment to go down by pretending that millions upon millions of unemployed Americans simply do not want jobs anymore. We saw this once again in March. According to the U.S. Bureau of Labor Statistics, more than 600,000 Americans dropped out of the labor market during that month alone. That pushed the labor force participation rate down to 63.3%, which is the lowest it has been in more than 30 years. So please don’t believe the hype. The sad truth is that there has been no jobs recovery whatsoever.

If things were getting better, there would not be more than 101 million working age Americans without a job.

So exactly where does that statistic come from? Well, the following explains where I got that number…

According to the U.S. Bureau of Labor Statistics, there are 11,742,000 working age Americans that are officially unemployed.

In addition, the U.S. Bureau of Labor Statistics says that there are 89,967,000 working age Americans that are “not in the labor force”. That is a new all-time record, and that number increased by a whopping 663,000 during the month of March alone.

When you add 11,742,000 working age Americans that are officially unemployed to the 89,967,000 working age Americans that are “not in the labor force”, you come up with a grand total of 101,709,000 working age Americans that do not have a job.

When you stop and think about it, that is an absolutely staggering statistic.

And anyone that tells you that “a higher percentage of Americans are working today” is telling you a complete and total lie. During the last recession the percentage of working age Americans with a job fell dramatically, and since then we have not seen that number bounce back at all. In fact, this is the very first time in the post-World War II era that we have not seen the employment-population ratio bounce back after a recession. At this point, the employment-population ratio has been under 60 percent for 49 months in a row…

Since the end of 2009, the employment-population ratio has been remarkably steady. Just check out these numbers…

March 2008: 62.7 percent

March 2009: 59.9 percent

March 2010: 58.5 percent

March 2011: 58.4 percent

March 2012: 58.5 percent

March 2013: 58.5 percent

We should be thankful that the percentage of working age Americans with a job did not continue to decline, but we should also be quite alarmed that it has not bounced back at all.

If there was going to be a recovery, there would have been one by now. The next major economic downturn is rapidly approaching, and that is going to push the employment-population ratio down even farther.

So why is the U.S. economy not producing as many jobs as it used to? Well, certainly the overall decline of the economy has a lot to do with it. We are a nation that is drowning in debt and that is getting poorer by the day.

But since the end of the last recession, corporate profits have bounced back in a big way and are now at an all-time high. So you would figure that the big corporations should be able to hire a lot more workers by now.

Unfortunately, that is not the way things work anymore. Big corporations are trying to minimize the number of expensive American workers that they have on their payrolls as much as possible these days.

One way that they are doing this is through the use of technology. Thanks to robots, computers and other forms of technology, big corporations simply do not need as many human workers as they used to. In future years, this trend is only going to accelerate. I wrote about how this is changing the world of employment in one of my previous articles entitled “Rise Of The Droids: Will Robots Eventually Steal All Of Our Jobs?”

Another way that big corporations are replacing expensive American workers is by shipping their jobs off to the other side of the globe. Big corporations know that they can make bigger profits by making stuff in foreign countries where they can pay workers less than a dollar an hour with no benefits. How in the world are American workers supposed to compete with that?

For much more on how U.S. jobs are being killed by offshoring, please see this article: “55 Reasons Why You Should Buy Products That Are Made In America“.

And of course immigration is having a dramatic impact on the labor market in some areas of the country as well. Cheap labor has dramatically driven down wages in a lot of professions. For example, once upon a time you could live a very nice middle class lifestyle as a roofer. But now many roofers really struggle to make a living.

When you add everything up, it paints a very bleak picture for the future of the American worker.

The cost of living keeps rising much faster than wages do, and the competition for good jobs has become incredibly fierce.

Meanwhile, the government continues to make things even easier for those that are not working. This has caused some Americans to give up completely and to be content with letting the government take care of them. The following is from a recent article by Monty Pelerin…

As we make it easier to get unemployment benefits for longer time periods, more people take advantage of the system. So too with food stamps and disability. All programs are at or near record levels in what is supposed to be four years into an economic recovery. For many, the benefits of becoming a government dependent exceed what they can earn. One study reported that a family of four, collecting all the benefits for which they were entitled, would have to earn $65,000 per annum to have the same after-tax purchasing power.

If you are a product of the government schools and are legal to work (i.e., have skills enough that you are affordable at the minimum wage or higher), at what point do you realize that there is no need to go through the hassle of actual work. You can live pretty well by staying home and taking advantage of the entitlements available to you. That is exactly what a larger and larger percentage of the population are realizing. In many cases, it is economically irrational to work.

This behavior creates a social pathology that only worsens over time. Kids learn from their parents that work is not necessary and the many ways to game the system. In this regard, look for this problem to become worse over time unless these programs are cut back.

In some areas of the country, it actually pays not to work very hard. According to Gary Alexander, the Secretary of Public Welfare for the state of Pennsylvania, a “single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045.”

But the truth is that most Americans still want to work hard and would gladly take a good job if they could just find one. The following is one example that was featured in a recent Fox News article…

After a full year of fruitless job hunting, Natasha Baebler just gave up.

She’d already abandoned hope of getting work in her field, working with the disabled. But she couldn’t land anything else, either — not even a job interview at a telephone call center.

Until she feels confident enough to send out resumes again, she’ll get by on food stamps and disability checks from Social Security and live with her parents in St. Louis.

“I’m not proud of it,” says Baebler, who is in her mid-30s and is blind. “The only way I’m able to sustain any semblance of self-preservation is to rely on government programs that I have no desire to be on.”

And that is how most Americans feel.

Most Americans do not want to be dependent on the government.

Most Americans want to work hard and take care of themselves.

Unfortunately, our economy is not producing nearly enough jobs for everyone and it never will again.

So there will continue to be millions upon millions of Americans that find that they cannot take care of themselves and their families without government assistance no matter how hard they try.

And this is just the beginning – things are going to get much worse during the next major wave of the economic collapse.

Yes, at the moment there are more than 101 million working age Americans that do not have a job, but that number is actually going to go much higher in the years ahead. The anger and frustration caused by a lack of employment opportunities is going to shake this nation.

That is why it is important to try to become less dependent on your own job. In this economic environment, a job can disappear at literally any moment. Anything that you can do to become less dependent on the system would be a good thing.

The Chart That Proves That The Mainstream Media Is Lying To You About Unemployment

March 10, 2013 by Michael

The mainstream media is absolutely giddy that the U.S. unemployment rate has hit a “four-year low” of 7.7 percent. But is unemployment in the United States actually going down? After all, you would think that it should be. The Obama administration has “borrowed” more than 6 trillion dollars from future generations of Americans, interest rates have been pushed to all-time lows, and the Federal Reserve has been wildly printing more money in a desperate attempt to “stimulate” the economy. So have those efforts been successful? Well, according to the mainstream media, the U.S. unemployment rate is falling steadily. Headlines all over the nation boldly declared that “236,000 jobs” were added to the economy in February, but what they didn’t tell you was that the number of Americans “not in the labor force” rose by 296,000. And that is how they are getting the unemployment rate to go down – by pretending that huge numbers of unemployed Americans don’t want jobs. Sadly, as you will see below, the truth is that the percentage of working age Americans that have a job is just 0.1% higher than it was exactly three years ago. And we have not even come close to getting back to where we were before the last economic crisis. For example, more than 146 million Americans were employed back in 2007. But today, only 142.2 million Americans have a job even though our population has grown steadily since then. So where in the world is this “economic recovery” that they keep talking about?

At this point, the “unemployment rate” has become so meaningless that it really isn’t even worth paying much attention to. If you really want to know what the employment picture looks like in the United States, you need to look at the employment-population ratio.

As Wikipedia tells us, many economists consider the employment-population ratio to be far superior to other measurements of employment…

The Organization for Economic Co-operation and Development defines the employment rate as the employment-to-population ratio. The employment-population ratio is many American economist’s favorite gauge of the American jobs picture. According to Paul Ashworth, chief North American economist for Capital Economics, “The employment population ratio is the best measure of labor market conditions.” This is a statistical ratio that measures the proportion of the country’s working-age population (ages 15 to 64 in most OECD countries) that is employed. This includes people that have stopped looking for work.

A chart of the employment-population ratio in the United States over the past several years is posted below…

As you can see, the percentage of Americans with a job fell from about 63 percent to below 59 percent during the last economic crisis. Since that time, it has not risen back above 59 percent. This is the first time in the post-World War II era that we have not seen the employment rate bounce back following a recession. At this point, the employment-population ratio has been below 59 percent for 42 months in a row.

Yes, we should be thankful that things have stabilized, but as you can see there has been no recovery. The percentage of Americans with a job is essentially exactly where it was three years ago. Despite the trillions of dollars that the U.S. government has borrowed, and despite the reckless money printing that the Federal Reserve has been doing, the employment situation in the U.S. has not turned around.

Data for the employment-population ratio from the beginning of 2008 is posted below…

2008-01-01 62.9
2008-02-01 62.8
2008-03-01 62.7
2008-04-01 62.7
2008-05-01 62.5
2008-06-01 62.4
2008-07-01 62.2
2008-08-01 62.0
2008-09-01 61.9
2008-10-01 61.7
2008-11-01 61.4
2008-12-01 61.0
2009-01-01 60.6
2009-02-01 60.3
2009-03-01 59.9
2009-04-01 59.8
2009-05-01 59.6
2009-06-01 59.4
2009-07-01 59.3
2009-08-01 59.1
2009-09-01 58.7
2009-10-01 58.5
2009-11-01 58.6
2009-12-01 58.3
2010-01-01 58.5
2010-02-01 58.5
2010-03-01 58.5
2010-04-01 58.7
2010-05-01 58.6
2010-06-01 58.5
2010-07-01 58.5
2010-08-01 58.5
2010-09-01 58.5
2010-10-01 58.3
2010-11-01 58.2
2010-12-01 58.3
2011-01-01 58.3
2011-02-01 58.4
2011-03-01 58.4
2011-04-01 58.4
2011-05-01 58.4
2011-06-01 58.2
2011-07-01 58.2
2011-08-01 58.3
2011-09-01 58.4
2011-10-01 58.4
2011-11-01 58.5
2011-12-01 58.6
2012-01-01 58.5
2012-02-01 58.6
2012-03-01 58.5
2012-04-01 58.5
2012-05-01 58.6
2012-06-01 58.6
2012-07-01 58.5
2012-08-01 58.4
2012-09-01 58.7
2012-10-01 58.7
2012-11-01 58.7
2012-12-01 58.6
2013-01-01 58.6
2013-02-01 58.6

So is there anyone out there that still wants to insist that the employment picture in the United States is getting significantly better?

Anyone that wants to claim that “unemployment is going down” should at least wait until the unemployment-population ratio gets back up to 59 percent. Otherwise they just look foolish.

Yes, the Dow is at an all-time high right now. But a bubble is always the biggest right before it bursts.

Most Americans understand that the Dow has been pumped up with all of the funny money that the Fed has been printing. Most Americans understand that the stock market really does not accurately reflect the health of the U.S. economy as a whole.

Just consider these numbers…

-The number of homeless people sleeping in homeless shelters in New York City has increased by 19 percent over the past year.

-The number of Americans on food stamps has risen from 32 million to 47 million while Barack Obama has been in the White House.

-According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income” at this point.

-Median household income in the United States has fallen for four consecutive years.

No, the truth is that everything is most definitely not fine.

If everything is fine, then why did the Federal Reserve inject another 100 billion dollars into foreign banks during the last full week of February?

The U.S. government and the Federal Reserve are desperately trying to prop up the entire global economy. Unfortunately, the global financial system has been built on a foundation of sand and the tide is coming in.

Back in 2008, a derivatives crisis was one of the primary causes of the worst financial panic since the Great Depression.

So did we learn our lesson?

No, the boys on Wall Street are back at it again as a recent article by Jim Armitage described…

Historically, stock markets, being driven by humans, have tended to have a similar length memory of catastrophes, before making the same dumb mistakes again.

But it hasn’t even been five years since derivatives (on that occasion based on daft mortgages) blew up the world, and yet these exotic creatures have already returned. With a vengeance.

Research from Thomson Reuters declared that banks were creating more derivatives known as asset-backed securities than at any time since before the Lehman Brothers crash. Of those, 22 percent were made up of – and forgive me the alphabet soup here – CDOs and CLOs. The very type of derivatives that exploded last time. At this stage last year, only 6 percent fell into those categories.

In other words, banks are creating more of the riskiest types of the riskiest products.

At some point, we will have another derivatives crisis even worse than the last one.

When that happens, financial markets all over the globe will crash, economic activity will grind to a standstill and unemployment will go skyrocketing once again.

But as you saw above, we have never even come close to recovering from the last crisis.

So you can believe the mind-numbing propaganda that the mainstream media is trying to feed you if you want. Unfortunately, the reality of the matter is that we have not recovered from the last major economic crisis, and another one is rapidly approaching.

I hope that you are getting ready.

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