Employment :slashingtongue

Jobs numbers; mixed emotions

Friday, December 4th, 2009 at 5:06 pm  
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We lost 11000 jobs last month. This is yet another month of job losses, something that is rather troubling. The service sector has also lost more jobs too, down form a gain in services jobs last month. However, this is the first time that the jobs losses is in 5 figures not 6; and manufacturing is showing some better signs too.

Firstly, I would look at the negative. 11 000 is still a lot of jobs lost. It still would equate to about 45000 mouths to feed. It also adds to our debt due to tax receipts and food stamps. The human loss too is extremely sad.

The main problem of housing and banking sectors are not being looked into as of yet. While it was the housing sector that caused our economy to come to her knees, it was banking that gushed rocket fuel at the naked flame. Only 3% of housing owners defaulted payment, something that should not have brought an economy to her knees. Rather it was the terrible banking processes that ballooned it with what I term as sucker banking; where someone benefits of another’s demise. The EU calls it casino banking. Fixture to both these sectors, are all but non-existent. Both parties are equally responsible for this.

Too big to fail is also a problem that we would experience in the future. Nothing is being done. While studies have been carried out that show and warranted the bailouts last year (something I was opposed to); no studies have shown how we can stop these banks from gambling with our money and risk losing it all.

The last negative would have to be that more jobs were lost in the services sector. The services sector accounts for a large number of jobs, and the fact that it has lost jobs yet again, since it has increased the number of jobs the last time round, is rather disappointing.

Now for the positives. What a number! I wonder if this is all in anticipation of Black Friday, which failed miserably, or Christmas, or is this due to the jobs numbers catching up with the rest of the economy! If it is the latter, we have the best Christmas that our country has seen in a very long time!

This is the first time that the economy has shown a 5 digit job loss report in a very long time. That is how pathetic the economy has been for years! If, and it is a very big if, this is a beginning of a set of positive news for President Obama’s administration, then I think that President Obama should go down in history positively. President Reagan was given a problem that was no where as bad as this and he took 2 years to turn the economy around. This is a feat that Republicans often boast about; now that record is about to be smashed.

The more positive good news is coming out of the manufacturing sector. As everybody, from Paul Krugman to Peter Schiff, agrees that for the American economy to be back to its best, manufacturing has to pick up. Manufacturing must return as the main economic player, else we would be in the hole yet again.

It is manufacturing that has greatly decreased the jobs figure. If this is to carry on in this month, I can assure the readers that : America is BACK!. But yet again, this is the situation of yet another big if. Still it is the first step; we can wait for eager anticipation for the next.

To sum it all off, I would reiterate my demand. We need to get the jobs market back to what it was in 2006. We need to get back the 7 million jobs we lost, on top of the 2 million new jobs for the fresh graduates. Should we not get there, we have failed as a country. I however, think that we should take recovery a step at a time.

After all, Confucius said that “ The journey of a thousand miles begins with one small step.”

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Unemployment above 10%

Sunday, November 8th, 2009 at 6:30 am  
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Unemployment has soared to 10.2%. That is the highest in nearly 2 decades. What is so disappointing is that we are experiencing the steepest rates of job losses in the past few months in the midst of the GDP and the economy roaring back to health.

There are some good news. There are less unemployed college degree holders. That rate has dropped 0.2% to 4.7%. Management and professionals too experienced the largest job growth, from 5.2% – 4.7%.

However, the fact that these numbers are so small means that it does not impact the economy that much. It was ages ago when the unemployment rate was 4.7%, the rate of unemployed college degree holders. That is unnerving.

Now back to the bad news. Blue collared workers, those that work in production jobs and factories, rose to 14.5 %. That is a 0.4% jump and it is very high. Worst of the lot is the jobless rate for workers in construction, maintenance or natural resources industries. It shot up 1.2%, which is huge! It now stands at a whopping 15.5%.

To sum it all up : The sectors that are least affected are becoming better, while the sectors that are most affected are becoming worse. And the worse is getting worse faster than the better is getting better (a weird expression, I know).

Why? Is it because the college degree holders and people in management make up the GDP while the rest of the economy does not? I am not being populist here, I myself am a college degree holder. But if there are 10% of the population that does not have a job, how can it be good for the economy? That is 10% of the population contributing next to nothing on the demand, how can there be jobs which would be needed in supply? Can people out there please explain this to me?

This also goes back to the topic of the stimulus. Stimulus was meant to create or save jobs. Around $800 billion was set aside to create jobs in 2009 and 2010. But with 1/3 of it being tax cuts, it is ridiculous, that is only going to kick in next year. Less than half of the “non tax cut” cost has been spent. That would be up to around $300 billion. And so far that has saved 1 million jobs.

I think that a stimulus was necessary to save jobs, but the manner done was wrong. For one, I think that the tax cuts are a joke. Cutting taxes in the time of recession is okay, but it should not be costing us more than $200 billion. Cutting taxes when income is next to zero is like selling a catamaran at a discount in the ghetto. It really does not work.

Things should be concentrated on jobs. For one, rather than giving money to the states like what was done, they should have taken over the budget of policeman and / or firemen in the states. This would force state to cut non essential jobs like roadwork ones rather than the firemen and policemen that are essential. I think that we should have reworked the roads, rail networks and electrical grids, reeducate our teachers and get better support for our students.

I think that if the next quarter, the economy grows again but jobs are still being lost, I think that a study has to be demanded. We cannot go down that road at all.

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We are out of recession, but

Thursday, October 29th, 2009 at 6:09 pm  
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It was slightly higher than expected, and it is the first growth the GDP has seen since the third quarter 2008 which would make some term this news as an end of the recession. Others, who believe that the recession started in 4th quarter2007; would say that we need another quarter of growth to say that we would be out of recession. But the one question on our lips is : When is the jobs coming back?

This should be the best news for us to hear but for a long time, but please forgive us for not being so optimistic. President Obama should be hailed as a savior of the economy, but please for give us, President Obama, for we do not give a crap for “technical mumbo-jumbo”, till we see the jobs coming back! I think that people genuinely feel that this increase in GDP is just because of the “fat-cats making money” while we are still suffering.

That is not true. The main reason that we are having a good GDP result is because the personal consumption expenditures has increased by about the same amount GDP has. In other words, people are more confident in the economy now than they were three months ago. That was the biggest reason that the GDP grew.

There were still losses in Private domestic investment in non-residential structures, government investment and spending in local government and most importantly, personal disposable income. This GDP figure does show the fact that we hold about 3.5% less money now than we had it a few months ago.

So where is the positive news coming from? The following show a double digit quarter to quarter growth. Personal Domestic consumption of durable goods, residential, exports and imports. The double digit in growth shows that trade is back, but the sad thing is that our imports (16.4%) are increasing faster than our exports(14.7%).

I think that you may understand what I feel about the GDP by the second paragraph in this article. I see no point in the economy growing when the job indicators show no good results. I also think that it would be the reversal of the job loss rate that would be the correct indicator of growth. Let me put it in numbers. We have lost at least 8.5million jobs since the recession began. Until and when we put at least half of those lost jobs back, then and only then, we talk of recovery.

I feel rather angry about this. For example, when we exit a recession our number roared back to recovery with unemployment numbers increasing. Germany exited the recession with a growth rate of 0.3% but unemployment was down. France exited with a mere 0.2% growth but unemployment was down. Why are we bucking the trend?Why is the economy improving but the jobs are not coming back? Are we doing something very wrong or very right?

That being said, if President Obama really needs to have a pat on the back for the figures. He has lead the economy out in some manner. So I give credit where credit is due. I think that if this were the previous administration, they would be gloating about this and the President is not.

But the President is still under my sights for criticism. I do not care if the GDP shows a 20% growth in the fourth quarter; as long as the jobless numbers increases, you are failing! I would still give him time though.

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