Hollowed Out

By David Glenn Cox

 

I’ve gotten into the habit each month of reading the Bureau of Labor Statistics Commissioner’s statement, on the employment situation. This month’s report was as somber as a suicide note, after reading it all I could say was, “wow.” The report displays an economy flat on its back, prostrate and starved. It is a story of a people toiling for little renumeration, as the average American worker’s paycheck increased by one single, shinny, penny last month.

The chart below displays mass layoffs for March; mass layoffs are fifty or more workers by any one employer. At first glance, it seems, not too bad, but with a closer inspection it becomes quite dire indeed.

Table A. Six-digit NAICS industries with the largest number of mass layoff initial claims in March 2012, private nonfarm, not seasonally adjusted.

 

Industry                                                                                                        March peak

Initial claims       Year       Initial claims

 

Temporary help services (1) ………….    11,732           2002             14,338

Food service contractors ………………      9,629           2012                9,629

School & employee bus transportation    6,815            2008               8,073

Motion picture and video production      6,367            2005               7,192

Payroll services …………………………..      2,563             2001               5,099

Warehouse clubs and supercenters ….    1,900             2012               1,900

Discount department stores …………….   1,776             2007              3,670

Supermarkets and other grocery stores  1,713             2009               2,220

Professional employer organizations        1,663             2009               4,892

Automobile manufacturing ……………..   1,627              1996              15,411

With a closer look you see record high layoffs in 2 of 10 categories. We are only 2,600 layoffs away from a record high in the largest category, involving the largest number of claims. You see, it isn’t just the number of jobs lost, but what kinds of jobs were lost. Think of it, 11,732 American’s were handed a pink slip last month from a temporary help agencies. They were laid off from the very place most of these workers went looking for work, after they lost their regular job. The very place where they went as a last resort just to try and do something, just trying to hang on, to keep from losing everything.

There is this recurring theme to these otherwise dry statistics; there were record high job losses in Food service contracting, Warehouse clubs and super centers. Just 500 jobs short of record layoffs in Supermarkets and other grocery stores as for some, odd reason, the American people appear to be eating less. The number of hours worked each week by American workers is virtually unchanged from a year ago and in all job categories.

“In 2011, 11.5 percent of families included an unemployed person,

falling from a peak of 12.4 percent in 2010, the U.S. Bureau of

Labor Statistics reported today. Of the nation’s 78.4 million

families, 79.8 percent had at least one employed member in 2011.”

I know, I’ve used this paragraph before, but it bears repeating, because it so clearly illustrates just how the employment numbers are sliced, diced and spread all around. If you take that same number of, 79.8 percent of families which had at least one member employed and invert it, it means that 20.2 percent of all American families “Do Not” have at least one employed member.

“Over the past12 months, average hourly earnings have risen by 1.8 percent.

From March 2011 to March 2012, the Consumer Price Index for All

Urban Consumers (CPI-U) increased by 2.6 percent.

Turning now to our survey of households, both the unemployment rate, at 8.1 percent, and the number of unemployed persons, at 12.5 million, were little changed in April.  Among the unemployed, 41.3 percent had been looking for work for 27 weeks or more.

The labor force participation rate–the share of the population that was working or looking for work–declined to 63.6 percent in April.  The employment-population ratio, at 58.4 percent, changed little.

In summary, nonfarm payroll employment grew by 115,000 in

April, and the unemployment rate was little changed at 8.1 percent.”

* Commissioners Statement

The media and politicians stand proclaiming, we must have a better educated work force to compete for jobs. Yet in the previous year the participation rate for those with Bachelor degrees and above, fell at double the rate of those without even a high school diploma, from 8/10ths of one percent versus 4/10ths of one percent. Now add in, there were there were 11,703,000 without high school diplomas last year versus only 11,490, 000 this year. While for the college educated the number of jobs created for those with a Bachelors degree or above was only 172,000 for the year, out of a population of over forty four million

We see a repeated up, down, yo-yo effect in unemployment, one month is up and everyone cheers, the next month is down and the pundits scratch their heads. Yet the average time spent on the unemployment rolls is little changed, last year was 41.4 weeks, down this month to 39.1 weeks.  Forty one percent of the unemployed have been unemployed for over 27 weeks, six million of them last year, with five million this year. Despite the addition of 138,000 new entrants to our workforce each month, 300,000 Americans disappeared from the work force last month, with another 522,000 disappeared from the work force this month. Over 800, 000 American workers have been disappeared from the labor roles in the last 60 days.

They must be disappeared for it is the only way to drive down the U-6 unemployment number from 15.5 percent unemployed last April to 14.1 percent this April. Officially acknowledged are 12.5 million unemployed Americans, only nobody really believes the official number to be very accurate. Yet each percentage point of error represents tens of thousands of Americans. American’s who struggle each day to get by while their government ignores their plight and does its level best to ignore them by erasing them from the figures.

From Realty Trac – Foreclosures sold in February, 73,687 and the number of new foreclosures this month is 198,853. Currently, an estimated four million mortgages are more than 90 days delinquent and these are the same people who just got pink slips from temporary agencies, the same people who are just trying to hold on. This month’s employment report is stark; no doubt about it, there were no bright spots or silver linings.

Even when sanitized for your protection, the employment report illustrates a very sick economy. It is an economy stagnant and rife with unemployment, rising inflation and falling wages. Despite this being for millions of Americans a Great Depression of the first magnitude, the Dow Jones Industrial average has risen nine percent this year based on??? It is based on artificially low interest rates, interest rates which makes it almost impossible for banking interests to profit in their traditional business of lending money.

With home prices still falling sales and sales expected to reach a fifty year low, what sort of banker wants to risk $200,000 on a mortgage for a lousy 3 percent? If you were a loan officer, what would you consider a safe occupation for a borrower to have these days? Who is safe from a layoff in this economy? Who among us once laid off, stands half a chance of landing a new job for the same wages?

The only answer for the banks is to play the stock market, to play pump and dump. From its initial public offering in March, Groupon raised $750 million selling stock for $20.00 per share. Touted to be the next big thing by the Wall Street experts, the company sells discount coupons for Internet advertisings, brick and mortar… what’s that?  Those who bought early and sold early made money, now its stock chart looks like a ball rolling down hill. It just goes to illustrate exactly what that this is, a paper thin, hollow economy.

What other reasons are there for Americans to be eating less?  Last month, less than 50 percent of same store sales equaled or exceeded last year. Nearly 20 percent of Americans have no bank account and the use of prepaid debit cards is soaring with unregulated card companies charging users four of five dollars per transaction to use their own money.

We read these things and we shake our heads and say, “gee it’s really tough out there, but these numbers are real flesh and blood people. People just like you and like me, they are men women and children. They are the elderly whose savings have been wiped out and yet their government simply ignores them.

A California man in his foreclosed house which he owed $552,000 shot and killed his wife and her elderly parents after being notified he was about to be put out into the street. The house appraises now for only $240,000. The couple had lived in the house since 1999; these weren’t speculators or house flippers. They were honest working people abused by the system and ignored by those who are supposed to protect them.

A former Chillicothe Ohio couple facing eviction from their Athens County home were found dead in their house Monday morning in an apparent murder/suicide. When Robert T. Nusser age 68, was told by deputies he would have to leave the home responded by asking, “What am I supposed to do? Where am I going to go?” His answer was to shoot his 64 year old wife Paulette in the head and then to turn the shotgun on himself.

Tampa- Florida Man Shoots Terminally Ill Wife on Day of Foreclosure Sale

This is carnage; this is a blood bath far beyond an accident or tough breaks. This is the abandonment of a people, left behind, in an economy hollowed out.

“The hopes of the Republic cannot forever tolerate either undeserved poverty or self-serving wealth. We know that we still have far to go; that we must more greatly build the security and the opportunity and the knowledge of every citizen, in the measure justified by the resources and the capacity of the land. But it is not enough to achieve these purposes alone. It is not enough to clothe and feed the body of this Nation, and instruct and inform its mind. For there is also the spirit, and of the three, the greatest is the spirit. Without the body and the mind, as all men know, the Nation could not live.  But if the spirit of America were killed, even though the nation’s body and mind, constricted in an alien world, lived on, the America we know would have perished.” – Franklin Delano Roosevelt 1941