I struggle sometimes to keep coming up with fresh ways to describe what I see happening to the US economy. I try to stay on top of economics news and try to make some semblance of the conflicting reports presented, the PR spin and more spin.
Today’s (Thursday, April 21) Initial Unemployment Claims report for last week is out and once again, the economists have their rose colored glasses on:
NEW YORK (CNNMoney) — First-time filings for unemployment claims declined in the most recent week, but were above the key 400,000 level for the second straight week, according to a government report issued Thursday.
There were 403,000 initial jobless claims filed in the week ended April 16, the Labor Department said Thursday. That was down 13,000 from the previous week’s revised 416,000.
Please note that the 416K from last week was an upward revision from the initial report of 412K.
Even more troubling to me is the report of on-going claims (from the same CNN article):
The 4-week moving average of continuing claims fell 17,500 to 3,716,750, down from a revised 3,734,250 in the previous week.
The official Unemployment rate of 8.8% generally equates to 14M to 15M people. Think of how many millions are no longer collecting any unemployment compensation at all yet are still considered active members of the work force, trying desperately to find employment.
I found this at Slate the other day with a map of the nationwide unemployment from January 2008 through February 2011. (The scrolling through the months is a bit sluggish – I set it for a 1 second interval and auto-play). David Dayen at FDL News posted Tuesday about the Corporations shipping millions of jobs out of the US. While the jobs are shipped out, we see the AFL-CIO high-lighting the disparity between the CEO compensation and the average workers:
WASHINGTON (CNNMoney) — In 2010, chief executives at some of the nation’s largest companies earned an average of $11.4 million in total pay — 343 times more than a typical American worker, according to the AFL-CIO.
“Despite the collapse of the financial market at the hands of executives less than 3 years ago, the disparity between CEO and workers’ pay has continued to grow to levels that are simply stunning,” said Richard Trumka, AFL-CIO president.
And what are the CEOs worried about? An interview aired this past Sunday between Pepsi CEO Indra Nooyi and Fareed Zakaria shows it is the whining about how high taxes are.
U.S. companies might hire more workers if the U.S. were to cut the tax rate on cash that companies bring home from foreign subsidiaries, PepsiCo Inc. Chief Executive Officer Indra Nooyi said.
Reuters on Sunday had an analysis that addresses some of the Pepsi CEO’s claims:
The Business Roundtable-funded study, by corporate accountants PricewaterhouseCoopers, found an average effective tax rate of 27.7 percent among about 500 U.S.-headquartered companies.
That compared with a non-U.S. average effective tax rate of 19.5 percent across on a large selection of countries, from Nigeria to Japan to Qatar, according to the study.
But a lot depends on what countries you are comparing the United States against, and how you crunch the data.
Critics said the study’s methods skew the reported U.S. tax rates paid upward.
U.S. corporations have enjoyed a two-year bull run on Wall Street. They are sitting on a record amount of cash and are back to paying bonuses that are the envy of executives around the world.
And the icing on the cake for many of them might be just around the corner: a tax cut that has bipartisan support in Congress.
As part of their budget plan passed last week, House Republicans want to cut the corporate tax rate to 25% from 35%. The Obama administration and many Democrats also are looking to slice the current rate, but not as much.
Nearly a third of all federal taxes came from corporations in 1952. Last year, they paid just 8.9%, according to government figures. Loopholes, credits and the ability to shelter earnings abroad have helped many of the country’s biggest companies pay far less than the corporate tax rate set into U.S. law.
I was born in 1952 but I have studied bits and pieces of history, enough to know that 1952 was right in the middle of the time when the US post war economy was strongest, yet the corporate taxes were actually paid, even with higher tax rates.
But hey! McDonald’s is hiring, right? Just like they do every year at this time.
And because I can:
Cross posted from Just A Small Town Country Boy