Tag: Unemployment

Time after time we see layoffs as the solution to a company’s woes.  For example, of the 598,000 newly unemployed individuals in the US in January of 2009, 163,000 of these were laid off from the 500 largest US companies.  Some lowlights:

Jan. 26: Following the acquisition of the small drug outfit Wyeth for $68 billion, Pfizer closes five factories and cuts 15% of total workforce (19,000 workers).

Jan. 26: Sprint Nextel pink-slips 8,000 workers–recording more than $300 million in severance charges but saving $1.2 billion a year in labor costs.

Jan. 30: Caterpillar increases previous layoffs from 20,000 to 22,110, and share price hits 52-week low.

Here’s the question: does this really help a company?

Here’s the answer: probably not.

Another question:  what would help these companies?

Another answer: replace the management!

We’ve heard some whining about President Obama forcing out GM CEO Waggoner.  Maybe he’s onto something?

(Cross-posted from Daily Kos)

Our economic situation has been all over the news. Banks are failing, credit is contracting, the auto industry is crying for a bailout. Clearly, the U.S. economy has gotten derailed, and we’re now faced with the unenviable task of getting it back on track. The trouble is, we don’t know which track is the right track.

Or do we?

Suppose there exists a valid interpretation of economic forces and outcomes, one that explains our current situation, yet one that no one will acknowledge, even to knock down.

About 12 years ago I picked up Cities and the Wealth of Nations: Principles of Economic Life by Jane Jacobs (better known as the author of The Death and Life of Great American Cities) at a used bookstore in upstate New York. Jacobs wrote this book in 1983, in response the emergence of stagflation. As an informed and educated layperson, she examined economic history with a critical eye and an urbanist’s heart, looking for the laws that explained what was going on — which the economic theories of the time did not.  

To be clear, I don’t own my home, I’m renting it – it’s not my house, just my home.  I’ve been here since the first of the year and have enjoyed it.  Since I live alone, it’s more house than I need, but since I have very little furniture the house has a nice zen emptiness to it and provides ample space for doing tai chi and kung fu.  Here’s a pic of my living room.  I don’t entertain much.

cross posted from The Dream Antilles

On Friday the nation’s recession, the big, ugly one that so many people feel directly in foreclosure of their homes, at the gas pump, in the cost of health care, in towering credit card debt, in the cost of heating their homes, in job and income insecurity, in lack of consumer confidence, in diminishing retirement funds, paid a personal, uninvited and unwanted visit to the county in the Hudson Valley of New York where I live.

The county’s fourth largest employer, Kaz Incorporated, a maker of humidifiers, announced that it was moving its production facilities from Columbia County, New York to Mexico.  The announcement that about 350 workers were losing their jobs came on the heals of a similar announcement from LB Furniture earlier this year, that it was closing and that 150 production workers would lose their jobs.  That’s 500 production jobs lost in 2008 in a small county with a population of about 62,000. That can modestly be described as an economic disaster.

Join me in Columbia County, New York.

This is the follow-up to News You Won’t Read in the Newspapers: Unemployment breaks 10%.

Yes, that’s right. 0.3% higher than the broad-unemployment peak two years after the 2001 recession kicked off. What you will read in the papers, though, is that “the” unemployment rate hit a five year high. That’s what you’ll see in the headlines … the headline unemployment rate.

The fact that broad unemployment seems to be at its highest point since they started calculating it this way in the mid-90’s? {*chirp*} {*chirp*} {*chirp*}

It’s refreshing to see that some businesses are doing well in today’s economy.  Perhaps the most successful venture going today is the pawn shop.  From Peoria to Pasadena,  pawn shops are seeing a boom in clients.

Says Doug Robinson, a pawn shop owner in Pasadena,

We’ve been on a continuous uphill run for a number of months.  I don’t see anything that will stop it.

Worse even than the paycheck advance loans, a pawn shop loan typically involves an annual interest rate in excess of 50%.  Yes, that is fifty percent per year.  In Mississippi, the cap is 25% per month, which is 300% per year (if not compounded monthly).  

Given that credit card debt is often 18% or higher, it is incredibly sad to imagine the poor soul who pawns an object at 50% interest to pay that very same object off on the 18% credit card debt.  

Original article, subtitled Government is the Largest Employer, by Paul Craig Roberts via Counterpunch.com.

Wothwhile reading if only for the statistics. But Roberts, as almost always recently, hits the nail on the head as far as where the economy actually stands.

I thought that with all the discussion regarding the US economy recently, and after the Bear Stearns fire sale to J.P. Morgan, it might be a good time to look at what is going on in America, overall.

Now, remember!  Presnit Bush sez that we are in a bit of a rough patch, but that all the leading indicators show a robust economy!  Or somes such drivel.

Unemployment Claims Surge In Latest Week

New filings for unemployment claims rose more than expected last week, matching the highest level since 2005, according to a report released Thursday by the Labor Department.

According to the report, 378,000 people filed for unemployment for the first time in the week ended March 15, up 22,000 from a revised 356,000 reported in the previous week.

The 378,000 reading, which is subject to revision, matched the number reported for the week ended Jan. 26. New jobless claims last exceeded that number on Oct. 1, 2005 when they hit 385,000.

A consensus of economists polled by Briefing.com had expected to see initial jobless claims to rise by 4,000 to 360,000.

The level of new jobless claims can be used as a recession indicator. “I think it confirms that we’re in a recession, or at least in a period of negative growth,” said Ethan Harris, chief U.S. economist for Lehman Brothers.

Have you ever noticed that since the Bush administration has come into office (Thanks again, SCOTUS!) that when a number is adjusted, it is always worse than when first reported?  Coincidence, I’m sure.