Subscribe Feed (RSS)What Recovery?
June 9th, 2010 by Yank Elliott | No Comments | Filed in People, business
The President, and all his Chicago Mob, are saying the recession is over and we’re in recovery. We all want this to happen quickly, but what Washington is saying is just wrong. There is no recovery as far as most American working people are concerned. What recovery? Every week new unemployment claims are almost half a million; last week the government said they were about 459,000! They have been at this weekly rate, or higher, during all of 2010, and there seems no end in sight. What recovery?
This translates to a national unemployment rate of 9.7%, according to the US Department of Labor for the month of May, 2010. Unfortunately, this is only half the actual rate. The labor department has another, little publicized, unemployment figure, which they say is the actual rate after considering part-timers wanting to work more, and people who have just given up trying to find work. The latest rate of unemployment among this larger group is 16.6%; This still does not include millions of workers who have taken very low-paying jobs just to have a little income. There are still more people who are taking short periods of contract work with no benefits, or the many unemployed who have returned to school with the hope of improving their chances for a regular job. Adding these people will push the rate toward 20%, maybe higher. Does this look like recovery?
The current economy is eerily similar to that surrounding the 1929 Stock Market Crash and ensuing Great Depression. The Great Depression started with the stock market crash of 1929 and ended with the US entry into World War II, in 1941, more than a decade of suffering for many. 1933 was the year of highest unemployment in the Great Depression, 24.9%. The rate only declined to 17.2% in 1939, shortly before the war. Our real unemployment rate today is close to 20%.
In The Great Depression, the poor economy affected people who still had jobs and had not lost everything. It made them begin to pay down their debt as fast as they could, but this caused prices to fall because people were not able, or were afraid, to buy goods and services. It also caused the value of individual assets to decline, the result of which was, the effort to reduce debt caused people to actually owe more than before debt reduction efforts. Have you heard anything like this recently? Many economists say Americans have initiated the greatest saving rate in history which is exacerbating the economic decline. There are admonishments everywhere to reduce debt and destroy credit cards. Isn’t this exactly what happened in the Great Depression? A significant indicator that the Administration believes we are in a similar situation is the President’s announcement, months ahead of schedule, of the reappointment of Ben Bernanke as chairman of the Federal Reserve Bank. Why is this important? Mr. Bernanke is a respected student of the Great Depression and has renewed the view that massive saving and debt-reduction have worsened our present economy.
The many similarities of the present economy compared with the Great Depression indicate any recovery could take a long time. Where is the new war to stimulate our economy—we already have two in progress for over seven years which are rapidly draining resources? There’s no white knight in sight and we must realize that whatever the future may bring, it will be quite different. There may or may not be jobs available—those that are there could require a different kind of training, and they may pay nothing close to previous jobs. That’s the reason for this article, to expect difficult times for many years to come, and what steps you may wish to take. We’ll explore some things people are doing, and later, the possibility of a home based business in the mix.
Let’s look at how people are managing being unemployed. Being without a job is a frightening and stressful condition for everyone, even those still employed. They constantly think about what will happen if they, too, lose their jobs. One person, unemployed for nine months, has used up all savings, and all his job queries have said he is overqualified, underqualified, or the company has put a hold on hiring. At this point he is willing to accept anything and move anywhere. Another person, out of work for six months, has used up her savings, gone to another state, and moved in with her sister’s family. She was originally a freelancer who moved up (she thought) to a better corporate job. Her plan, now , is to return to freelancing. Another person, unemployed in New York for 14 months, is treating his job search like a 24-hour full time job. He networks everywhere, including social networks on the Internet. He’s now planning to take one or two part-time jobs just to exist. Our final look is at a person unemployed for 16 months, almost a year and a half. He turned down a part time grocery job because it paid much less than his unemployment check. He’s not lazy, that’s just a good financial decision. He is now seeking freelance opportunities, something he has done in the past, until his clients all quit because of the economy. These are just small samples of what is confronting the 20% or more unemployed in the US. Our government has no clue about how to remedy this situation.
They have no idea how to create more than 100,000 jobs each month just to keep up with our population growth. Many more will be needed to put the more than six million unemployed back to work. The President and Congress are only interested in gaining Socialist–style control over our lives, and taxing and spending. None of this encourages businesses to expand, or new businesses to begin startups. Expect the recession (or depression) to last many more years. Economists, even those who say we are in a mild recovery, don’t expect a return to unemployment rates anywhere near 5% for at least six years; personally, I expect we’ll never return to anywhere near this rate. Jobs are gone, never to return. Even if the government curtails its tax and spend policies, many of these jobs are gone forever.
People who have jobs will stay in them, though 24% of them say they plan to move on as soon as they get an offer. An example is a flight attendant who has returned to college and received a graduate degree in anticipation of changing jobs as soon as he receives an offer. What are all these unemployed and disgruntled employees going to do. They must have some way to take care of themselves and their families. Unfortunately, nothing they can do will bring back all the salary, perks, and benefits their old jobs offered. There will never be another job like most of them once had. What are they going to do? Well, many will have to learn how to be self-employed, or become freelance contractors. Stay tuned to this blog and you will be introduced to a number of ways, some unconventional, to make money outside traditional big company employment.
The current economic situation is perilous, and nobody has any idea what will happen. Consider a home based business as part of your overall financial strategy, just like investments, savings, or real estate.
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Tags: benefits, contract work, great depression, income, president, recession, recovery, stock market crash, unemployment claim, unemployment rate, washington, world war ii
