Posts Tagged ‘job loss’

Captain Rick : U.S. Labor Report disappoints those looking for a job and paints a stagnant image of the U.S. Economy as it continues its course toward Socialism.

The Labor Department reported the U.S. economy added only 151,000 jobs in January, well below expectations for 190,000 jobs. The unemployment rate ticked down to 4.9% from 5% the month prior, while forecasts called for it to remain unchanged. Meanwhile, the labor force participation rate rose to 62.7% from 62.6%, despite expectations for it to hold steady. Its all a sign of America headed toward Socialism.

image

This Labor Report sends a cold chill for the U.S. Economy …

The creation of only 151,000 jobs is very weak considering it is only 0.56 % of U.S. population (323 million). That does not even equal the U.S. population growth rate which is about 0.7% … which means that job growth is not only stagnant, but going in reverse. The U.S. still has not recovered millions of jobs lost during the Great Recession.

The unemployment rate of 4.9% is totally bogus … its meaningless. It only represents the minority of job seekers that are still receiving unemployment compensation. The real unemployment rate is more than twice as high. Most job seekers have exhausted their benefits, still looking for work with no income, are working a part-time job to make ends meet or have given up looking for work.

Perhaps the most important statistic in the labor  report is the drop in the Labor Force Participation Rate … to just 62.6%. It means that about 1/3 of eligible U.S. workers are not working. Some retired early and are living off of savings. Some have managed to work the system and are living off of welfare benefits, including many who have managed to acquire ‘Disability’ status and are collecting U.S. Social Security Disability benefits (SSDI) and some who are being supported by friends or relatives and some who are homeless. The Labor Force Participation rate has been in steady decline since its peak of 67.3% in 2000. This trend is a vivid indicator of America’s march toward Socialism.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title at top)

Interesting ATRIDIM NEWS JOURNAL Links:

ANJ: Unemployment

ANJ: Economy

Advertisements

Captain Rick: U.S. Job Growth is not keeping up with population growth. The 8.7 million jobs lost during the Great Recession will never return. Despite the ‘glory employment talk’ presented by the Obama Administration, America’s job situation qualifies among the worst since the Great Depression. I present the simple math to expose a monumental economic problem developing that will help deliver America to the edge of the pending ‘real fiscal cliff’.

image

BLUE LINE: 185,000 jobs need to be created each year to keep up with U.S. Population growth of 0.7%

RED LINE: 177,000 jobs represents the average number of jobs created during the past year. This demonstrates a negative pattern that is not keeping up with population growth.

Great Recession Job Losses are Gone Forever

8.7 million jobs were lost during the Great Recession of the late 2000s. It has been stated that 8 million of those have been restored. Simple math proves this to be incorrect. In actuality, none of those jobs have been restored when considering the jobs needed to be added each year to keep pace with population growth. America is running a significant job deficit.

Captain Rick’s Job Numbers Math

317,725,000 U.S Population

0.7% growth rate (*.007)

2,224,075 people enter job market every year

/12

185,340 people enter job market every month

*12 months *5 years

11,120,375 jobs needed to be added in past 5 years since prior to great recession to keep up with population growth

-8.7 Million jobs lost

+8 Million jobs regained

.7 Million jobs still needed to be recovered

+11.1 Million jobs needed to be added to keep up with population growth

11.8 Million jobs short since prior to the Great recession 5 years ago.

At the current pace of job growth, which is not keeping up with population growth, the jobs lost during the ‘Great Recession’ will never be regained.

Where the new jobs were created

The U.S. economy added 175,000 jobs last month

Construction added 15,000 jobs, restaurants and bars added 20,100 jobs and education and health services added 33,000 jobs.

By far, the strongest hiring came from professional and business services industries, which include accountants, architects and technology workers. This sector alone added 79,000 jobs last month.

Wages are up: Average earnings ticked up 9 cents, to $24.31 an hour in February. It was the largest monthly wage gain in more than two years.

Long-term unemployment and underemployment remain high

Long-term unemployment remains high. As of February, 3.8 million Americans were unemployed for six months or more.

The underemployment rate — technically known as the U-6 — was 12.6%. That includes the unemployed, plus part-time workers who want to work full time, and people who want a job but haven’t searched for one in the last four weeks.

Labor Participation is lowest since 1978

Labor participation lowest since 1978; just over 63% of the population is engaged in the workforce, driven partly by Baby Boomers retiring, but also by workers who had simply given up hope after long and fruitless job searches. It means that a smaller chunk of the population is paying for promised entitlements such as Social Security and Medicare. If a smaller share of the country is working, it will also act as a drag on economic growth.

What does this Employment data mean concerning the future of America?

America is stuck in a land of anemic growth…actually declining in real growth because its economy can not consistently produce enough jobs to keep pace with America’s 0.7% population growth. In reality, this means that America is declining in economic strength. In the coming few years America faces an astronomical increase in expenditures due to entitlement programs like Social Security, Medicare and welfare programs like Medicaid and Obamacare. America’s relatively level revenue will not be able to cover the mushrooming expenditures. Congress will not be able to address this problem by simply ‘kicking the debt can down the road’ as it has in recent years. At some point soon, the fiscal mess that is brewing will explode as America plunges over the pending ‘real fiscal cliff’.  At the bottom lies America as a third world country.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title at top)

Interesting ATRIDIM NEWS JOURNAL Report Categories:

Jobs

GDP

U.S. Debt Crisis

Economy

Entitlement Reform

Social Security

Medicare

Medicaid

ObamaCare

Captain Rick’s Fiscal Cliff Course 101

Captain Rick: The Dow Jones plummeted 2.4% during the past month, attributed in part by the news of Cisco cutting 4000 jobs and Wal-Mart sales falling short of expectation. This combined with the growing violence in Egypt caused major world markets to follow the Dow’s decline.

image

The above chart shows the significant, recent decline of the Down Jones, down 2.4% in the past month. It is the largest dive in values in 2 months and one of the top 5 declines since the market crash of 2008. I break down the issues affecting this loss…

Cisco, the worlds largest network company providing services to most of the largest companies and government entities announced it is cutting 4000 jobs.  Cisco touches all parts of the networking process, and the company’s success is largely tied to sentiment about the world’s economy. Many large businesses and government agencies are Cisco customers, and they’re unlikely to buy up networking equipment when they’re worried about the economic situation. I see this as a major signal that the world economy is in much more dire shape than what we are being led to believe from the typical ‘show business hype’ on the evening news. World markets are echoing the concern.

Wal-Mart, the world’s largest retailer, reported lower than expected sales for the second quarter. When the world cuts back on purchases at Wal-Mart, it raises a red flag for me.  It makes me wonder how healthy the recovery from the Great Recession really is.

Disturbance in Egypt has caused over 400 deaths and 3500 injured. While most of financial market ‘gurus’ did not mention this as one of the causes of the recent market plummet, I believe it played a role.

The major economies of the world continue to tread on very shaky ground. There has been lots of news about our ‘improving economy’. I suggest that much of this is based on unfounded news ‘hype’. Our world’s economy is like a train riding on fragile rail, heading for the edge of the ‘Global Fiscal Cliff’.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Associated ATRIDIM NEWS JOURNAL Report Categories:

Dow Jones & World Market News

Captain Rick’s FISCAL CLIFF 101 Course

Captain Ricks INVESTMENT 101 Course

Stock and Bond Market News

Captain Rick: Detroit was once the 4th largest city in America and ‘motor capitol’ of the world. Decades of internal destruction caused a mass exodus of people, reducing its population to 18th place. Its automotive manufacturing plants have been shut down or relocated. What went so wrong?

I conducted in-depth research on this important event. I have compiled the following report to accurately present the ‘Rise and Fall of Detroit’ and what went so wrong. I conclude with sobering concerns for all Americans, especially those who have the responsibility of managing our cities and states…many of which are on the same course as Detroit.

image

The above photo of the GM building in downtown Detroit was taken with a telephoto lens looking southeast from Bush and Watson Streets, about 1.5 miles to its northwest. The large area around this boarded up house contains similar houses and open area where old houses have been removed. 

The Rise and Fall of Detroit

Ford Motor Company ignited the rise in 1903

In 1903 Ford founded the Ford Motor Company. Ford’s manufacturing—and those of automotive pioneers William C. Durant, the Dodge brothers, Packard, and Walter Chrysler—reinforced Detroit’s status as the world’s automotive capital.

Labor Unions took control with strikes for increased wages, benefits, pensions

With the factories came high-profile labor unions such as the American Federation of Labor & the United Auto Workers which initiated strikes & other tactics in support of such things as the 8-hour day/40-hour work week, healthcare benefits, pensions, increased wages & improved working conditions. The labor activism during those years increased influence of union leaders in the city such as Jimmy Hoffa of the Teamsters and Walter Reuther of the autoworkers.

Mergers helped companies expand elsewhere, while causing the disappearance of plants in Detroit … often to escape the profit robbing effects of labor unions

Mergers in the 1950s, especially in the automobile sector increased oligopoly in the American auto industry. Detroit auto manufacturers such as Packard & Hudson merged into other companies and eventually disappeared. Plants in Detroit, with heavy union control, were closed as new plants were built elsewhere in less union-friendly locations. Behind the scenes, it can be said that labor unions played the first major role in the fall of Detroit

Detroit became America’s fourth largest city as companies looked to reduce labor costs by importing cheap labor from the South

Tens of thousands flocked to Detroit with the hope of better pay and benefits, particularly black workers from the Southern United States. It resulted in Detroit rocketing to become the fourth largest city in the United States with blacks as its majority residents.

Racial tension took hold to begin the Fall of Detroit

Social tensions rose with the rapid pace of growth. On January 20, 1942, with a cross burning nearby, 1,200 racist whites tried to prevent black families from moving into a new housing development in an all-white area of the city. Later in June 1943, Packard Motor Car Company promoted three blacks to work next to whites in their assembly lines. In response, 25,000 whites walked off the job. The Detroit Race Riot of 1943 occurred 3 weeks after the Packard Motor Car incident. Over the course of three days, 34 people were killed. Of them, 25 were African–American, and approximately 600 were injured.

In June 1963, Rev. Martin Luther King, Jr. gave a major speech in Detroit that foreshadowed his "I Have a Dream" speech in Washington, D.C. two months later. During the African-American Civil Rights Movement of the 1950s and 1960s, Detroit witnessed growing confrontations between the police and inner city black youth, culminating in the Twelfth Street riot in July 1967. Governor George W. Romney ordered the Michigan National Guard into Detroit, and President Johnson sent in U.S. Army troops. The result was 43 dead, 467 injured, over 7,200 arrests, and more than 2,000 buildings destroyed. Thousands of small businesses closed permanently or relocated to safer neighborhoods, and the affected district lay in ruins for decades.

On August 18, 1970, the NAACP filed suit against Michigan state officials, including Governor William Milliken. The original trial began on April 6, 1971, and lasted for 41 days. The NAACP argued that although schools were not officially segregated, the city of Detroit and its surrounding counties had enacted policies to maintain racial segregation in schools.

District Judge Steven J. Roth held all levels of government accountable for the segregation. The Sixth Circuit Court affirmed some of the decision, withholding judgment on the relationship of housing inequality with education. The Court specified that it was the state’s responsibility to integrate across the segregated metropolitan area.

U.S. Supreme Court was most responsible for massive exodus from Detroit

The Governor and other accused officials appealed to the Supreme Court, which took up the case on February 27, 1974. The subsequent Milliken v. Bradley decision would come to have enormous national impact. According to Gary Orfield and Susan E. Eaton in their 1996 book Dismantling Desegregation, the “Supreme Court’s failure to examine the housing underpinnings of metropolitan segregation” in Milliken made desegregation “almost impossible” in northern metropolitan areas. “Suburbs were protected from desegregation by the courts ignoring the origin of their racially segregated housing patterns.” “Milliken was perhaps the greatest missed opportunity of that period,” said Myron Orfield, professor of law and director of the Institute on Metropolitan Opportunity at the University of Minnesota, “Had that gone the other way, it would have opened the door to fixing nearly all of Detroit’s current problems.” John Mogk, a professor of law and an expert in urban planning at Wayne State University in Detroit says “Everybody thinks that it was the riots [in 1967] that caused the white families to leave. Some people were leaving at that time but, really, it was after Milliken that you saw mass flight to the suburbs. If the case had gone the other way, it is likely that Detroit would not have experienced the steep decline in its tax base that has occurred since then."

The Fall of Detroit

Long a major population center and major engine of worldwide automobile manufacturing, Detroit has gone through a continuing economic decline over the past 60 years.

Population Decline from ‘White Flight’ … Detroit reached its population peak of 1.8 million people in the 1950 census and ranked as America’s fourth largest city. Massive ‘white flight’ to the suburbs and other cities took place following the 1974 Milliken case. As of the 2010 census Detroit has lost 60% of its population, falling to 18th place with just over 700,000 residents remaining, of which over 82% are black/African American and 6% Hispanic … a total reversal from 1950 when over 90% were non-Hispanic whites. The city’s tax base eroded along with that population decline. There is no question that ‘white flight’ was the top cause of the fall of Detroit. It in turn led to all of the following problems…

High unemployment … was compounded by white flight and middle-class flight to the suburbs (and in some cases to other states), and the city was left with a reduced tax base, depressed property values, abandoned buildings, abandoned neighborhoods, high crime rates, and a pronounced demographic imbalance.

The unemployment rate, while down from a peak of 27.8% in the summer of 2009 — when General Motors and Chrysler Group were going through their own bankruptcies — is still at 16.3%, nearly twice Michigan’s statewide average.

Loss of Tax Revenue … Most of the auto industry’s Michigan plants moved out of our build in locations outside of Detroit city limits, severely limiting how much tax revenue they contribute to Detroit. General Motors, is the only automaker with headquarters inside of city limits, and Chrysler Group operates just one plant inside the city. Both companies declared bankruptcy and were bailed out at the expense of U.S. tax payers.

More than half of the owners of Detroit’s 305,000 properties failed to pay their 2011 tax bills, exacerbating the city’s financial crisis. According to the Detroit News, 47 percent of the city’s taxable parcels are delinquent on their 2011 tax bills, resulting in about $246 million in taxes and fees going uncollected, nearly half of which was due to Detroit. The review also found 77 blocks in Detroit had only one owner who paid taxes in 2011.

Urban Decay … The ongoing decline has left its mark on the city, most notably in severe urban decay and thousands of empty homes, apartment buildings, and commercial buildings around the city. Some parts of Detroit are sparsely populated resulting in the city having difficulty providing municipal services such as policing, fire protection, schools, trash removal, snow removal, lighting, etc. The city has sought and considered various solutions such as demolition of abandoned homes and buildings, though there are tens of thousands of abandoned structures; removal of street lighting from large portions of the city; and encouraging the small population in certain areas to move to more populated areas of the city as there may not be a quick response for city services such as police in de-populated areas.

Crime … Detroit has the sixth highest total rate of violent crime, five times the national average. At 16.73 per 1,000, it has the highest per capita rate of violent crime among the 25 largest U.S. cities in 2007, those with a population exceeding 200,000.

Nearly two-thirds of all murders in Michigan in 2011 occurred in Detroit. It has been reported that about 65 to 70 percent of homicides in the city are drug related. he police department closes only 8.7% of its criminal cases.

Detroit was rated the most dangerous city in the United States for the 4th year in a row in a 2010 survey by the FBI. It has been reported that 4 of the top 10 most dangerous neighborhoods in the nation reside in Detroit.

Blight: 78,000 blighted buildings either abandoned or ruined. 

Lack of Lighting: 30,000 defunct streetlights– about 40% of the 88,000 street lights don’t work.

Response time: Call for a police officer takes 58 minutes to get help — more than five times what it takes elsewhere in the United States. Response times for Emergency Medical Services and the Detroit Fire Department average 15 minutes, which is more than double the 7-minute averages seen in other cities.

Hazardous waste sites: 70 Superfund hazardous waste sites

Parks: Two-thirds of parks closed since 2008, with only 107 remaining open

Aging equipment: Fire stations are old and not adequately maintained. A fleet of city vehicles is aging and poorly maintained. A power grid that is deteriorating. A city-owned power plant that has been idle for two years. 31 sub-stations that need to be decommissioned. Information technology systems in multiple departments that urgently need to be upgraded or replaced.

Detroit Files for Bankruptcy

The situation reached a crisis and almost resulted in the state of Michigan taking over administrative control of the city. The state governor declared a financial emergency in March 2013, appointing Kevyn Orr as emergency manager. On July 18, 2013, Detroit filed for bankruptcy.

Orr said the city had filed for bankruptcy because it would take more than 50 years to pay off the city’s $11.5 billion in unsecured debt while not conducting even the most basic maintenance, such as filling potholes and plowing snow.

Current Fiscal Situation … What is at stake? 

Detroit halted payments on about $2 billion in debt last month to preserve its dwindling supply of cash. The city faces total liabilities of about $18 billion.

The reorganization plan argues that the city needs to shed $9.5 billion of its $11.5 billion in unsecured debt in order to be able to pay its bills and make necessary improvements in services. Much of the debt targeted for elimination is related to pension benefits and retiree health care coverage required by union contracts. That would mean that investors and retirees would receive an average of just 17% of what they are owed.

When employees of a bankrupt business lose their promised pensions, the Pension Benefit Guaranty Corp. steps in and provides a minimal level of benefits. But that federal agency doesn’t back pensions in the public sector.

Detroit appears to be the first municipal bankruptcy that has ever involved involuntary cuts to retiree benefits.  The possibility exists that U.S. tax payers could get stuck bailing out Detroit to cover its workers pensions, similar to the Obama bailout of two of Detroit’s largest companies…GM and Chrysler. Given the poor state of funding for many public sector pension funds nationwide, its an issue which is likely to end up being addressed by the U.S. Supreme Court.

Bankruptcy could slash pension benefits to city workers and retirees, and leave bond holders with only pennies on the dollar. Investors say the bankruptcy will make it more difficult for cities and towns everywhere to raise the money they need to build bridges, schools and other infrastructure. It will also hurt municipal bonds held by individual investors. There are more than $1 trillion worth of bonds at risk. There is bound to be a ripple effect nationwide.

Many American Cities and States are following in Detroit’s steps

The lucrative pension and benefit plans that cities and states across America have adopted…with a hefty helping hand from the powerful America-destroying unions…are on a rapid course heading for the edge of the real ‘Fiscal Cliff’. None of America’s pension plans are sustainable. It will not be long before they all begin to fiscally implode.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Associated ATRIDIM NEWS JOURNAL Report Categories:

Detroit

Labor Unions

Captain Rick: Detroit, motor capitol of the world, has filed for the largest public sector bankruptcy in U.S. history … $18.5 billion. This is prime example of the destruction caused in a major way by labor unions.

image

Detroit, pictured above with excellence, has filed for bankruptcy, the largest in the public sector in U.S. History

Words from the Michigan Governor Rick Snyder

“The fiscal realities confronting Detroit have been ignored for too long. I’m making this tough decision so the people of Detroit will have the basic services they deserve and so we can start to put Detroit on a solid financial footing that will allow it to grow and prosper in the future. This is a difficult step, but the only viable option to address a problem that has been six decades in the making. I have reached the conclusion that this step is necessary after a thorough review of all the available alternatives, and I authorize this necessary step as a last resort to return this great City to financial and civic health for its residents and taxpayers. This decision comes in the wake of 60 years of decline for the city, a period in which reality was often ignored.”

He also said that 38% of the city’s budget is being spent on “legacy costs,” such as pensions and
debt service. He said police take almost an hour to respond to calls, compared to a national average of 11 minutes, and that 40% of street lights in the city are turned off.

Labor Unions are destroying America

Once serving a great purpose of job safety, labor unions have become an empire of greed for wealth over past decades. Their greed has destroyed millions of American jobs. Auto companies in Detroit were forced to build plants in and source parts from places that were less union friendly in an effort to stay profitable. Unions helped destroy Detroit. This bankruptcy of Detroit, once America’s fourth largest city (now 18th), is the culmination of that destruction.

My purpose with this report is not to expound on the details of this record bankruptcy, for they will be broadcast around the world by the media in coming days. My focus is on the destruction to America, caused in a significant way by labor unions.

Across America, our companies, cities and states are significantly influenced by powerful unions, especially those representing police, fire and civic service. I urge all employees who are members of a union to consider severing your membership in an effort to protect the future wellbeing of your company, so that it does not have to relocate … or your city, so that it does not eventually have to file for bankruptcy, like Detroit. I urge city and state officials to do what is possible to curtail or limit agreements with unions, in an effort to help prevent the need for our cities and states to file for bankruptcy, like Detroit. Many more American cities are following closely in Detroit’s path. America has not yet experienced its first state bankruptcy … but its just a matter of time. There are thousands of fiscal ‘time bombs’ waiting to explode across America, especially those concerning employee pensions.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Associated ATRIDIM NEWS JOURNAL Report Categories:

Labor Unions