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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.
So what is the DeeCee response? Tax cuts of course. Even as we keep hearing how critical fixing the “deficit problems” are. From the LA Times on Wednesday:
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.
…snip…
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
16 Comments
I read somewhere this morning, sorry don’t recall where, that several states are going to hit extended benefits limits in next 4 months. Just keeps getting better. Thanks for staying on this topic.
Great post.
Some of the states are stopping Extended benefits “to make a statement to the Federal government.” Other states have started the process to cut back on max unemployment benefits from their state pools because they “don’t want to overly burden the businesses with a tax increase.”
“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.”
Conversely US companies might fire more workers if the US were to cut the tax rate on cash that companies bring home from foreign subsidiaries. Such a tax arrangement would encourage companies to forum shop for the cheapest labor and foreign tax rates, so that the 1% go richer, while everyone else in the US got a pink slip. What is good for the corporations isn’t necessarily good for the US…which this would be good for corporate shareholders individually, but not the US collectively.
Great post.
Maybe there eventually will be jobs for people with carts to work for say .50 cents a day to shout “Bring out yer dead”…
6% gave up
8.8% unemployed
13% art, underemployed and/or working for less than the same prior or replaced jobs.
spun numbers
Let’s get a number on total earnings by the labor force who may be doing more work in the hours put in. Compare the total earnings with past total earnings and sticker shock is apparent. The disposable income per household has diminished by the recession. So recovery is limited to a smaller slice of earners and unemployed.Theforiegn press prints it.
I am still mystified by the ‘initial claims’ category.
at a clip of 400,000 a week, are there about to be another million
unemployed this month? The jobs (hired) is an anemic 50-100,000 is a month these numbers don’t add up.
As a 62 yo 99er who once taught college art and has been turned down to bag groceries, competing in the mindless entry level cess pool… disqualified for over qualification, ephemeral age, actuarial tipping hazard, I’m lucky to have a spouse still employed.
Yeah, our far far right legislature here in Arizona just hit sine die(adjournment) and put 86 bills on Governors desk; among them was a tax increase(said to be temporary, 2 years)on business to pay back Fed funds borrowed for unemployment when reserves were exhausted.
We hear and read a lot about the unemployed, and the cost to the individuals and their families is horrendous. A ramification of that unemployment issue is the slowdown in buying. The slowdown in earnings, affects buying, which affects existing businesses, growth, and start-ups in inner city commerce. I am a 73 year old office property owner experiencing a dramatic decrease in earnings because of lost tenants. Acquiring new tenants it like hunting for the boson particle. I was once prosperous. Even the scarce new tenants pay 25 to 50% less than tenants from 2007. I have never missed a mortgage payment, but the my lender, a bank, is harassing me and will definitely seek foreclosure due to my lower income. I am losing my retirement and my son and grandson are losing their inheritance. It’s not pretty, and it’s another product of the rampant greed and escalating inequality in America as we slide further into the third world.
Let’s see if we can get your taxes reduced…
“So what is the DeeCee response? Tax cuts of course. Even as we keep hearing how critical fixing the ‘deficit problems’ are.”
It’s the theft of our entire nation. Pure and simple.
I can see why it is difficult for you to find the right words to continue to discuss this issue. The folks downtown do not want anyone to really understand how bad the problem is, because they haven’t done anything to turn the situation around. When are they going to stop protecting themselves from the ‘unemployed’ and start protecting the unemployed???? I admire your courage in tackling this issue in the face of government denial of its existence.
62 here and basically in the same boat.
Friend your not alone. I believe this Depression ( let’s start calling it what it really is) has removed 25 to 30 % of demand from what’s left of the economy. The rich and I know more then a few of them barely notice and whine on and on about how half the public doesn’t pay any taxes ( a favorite right wing lie , they like to toss out to make themselves look like martyrs no less.) Fox and the rest of the right wing noise machine has built a separate reality for these people where they are “the producers” and we all are the parasites ( the useless eaters) as they’re told over and over again 24/7 and they listen and read nothing but these sources of info for the most part.
“When are they going to stop protecting themselves from the ‘unemployed’ and start protecting the unemployed????” Sorry to say but NEVER is the answer. For them the unemployed are merely some insects to be dealt with as insects and other vermin are. We aren’t “real” people with lives and families. We are lazy shiftless lay abouts and if in their view we’d just try harder and be willing to work for sub-min. wages or even work for nothing then we should expect no sympathy and especially no help from society. Unemployment comp. is looked upon as welfare by this crowd as is SSI and Medicare. They want a society closer to the one in Mexico, where no so called safety net exists. Now that we live in an Imperial plutocracy I expect within another generation that is exactly where the country is going to end up.
Dakine,
I’ve told you many times, even on the phone how much your posts mean to me and others here at FDL. We have to have somebody cut through the crap and tell the truth.
Even though our US Corporate tax rates are such or such, it doesn’t ever mean they actually pay that. When you see companies like GE pay actually nothing and get refunds in the millions, on top of the Federal Subsidies the get it is amazing they can say they need tax cuts. Now, take a company like AT&T, they collect trillions of dollars from each customer in different taxes for internet, international usage, state, federal, 911 tax, and all sorts of tax type fees, yet pay nothing back. In fact, they get paid to spy on us by our own tax dollars!
If you think about how much we are taxed both on the front end and the back end, and then again at the end of the year it is absurd for any corporation to say they need another tax cut!
The employment situation is nothing more than an Economic Hit to bring this country down so that they and the Banks can control it commpletely.