Are you one of the countless baby boomers who is relying on Social Security before you reach retirement age? You’re not alone. The dearth of jobs has prompted many Americans to accept lower Social Security payments at the age of 62. This means Social Security is forecast to start paying out more in benefits than it receives starting in 2017.
The government believes 15 million people are jobless. That’s only an estimate. It doesn’t include the high number of self-employed people desperately taking independent contractor projects because they can’t find jobs, or the under-employed taking temporary jobs.
These numbers also hurt job creation. Higher unemployment rates charged to business by government is a disincentive, too.
After having worked through 6 major economic downturns, my analysis of the data and the trends is that the real unemployment rate is about 25 percent. That’s depression-like, not recession-like numbers.
A study proves it’s getting worse for American workers. The Center for Labor Market Studies at Northeastern University in Boston sums up the problem in its study’s subtitle – “A Truly Great Depression Among the Nation’s Low Income Workers Amidst Full Employment Among the Most Affluent.”
For the nation to catch up, most experts believe 100,000 new jobs need to be created every 30 days. But veteran pragmatists know it won’t happen. Count me as one of those.
The job drought is not a new phenomenon in the sense that it’s been years in the making. The federal government began tracking the number of unemployed in 1948.
Many jobs have not and will not return. Not to over-simplify, institutional investors own increasing numbers of companies. Largely, they extract profits by slashing payrolls and encouraging offshoring of jobs in Latin America and Asia where labor is cheaper.
Since 2000, automation is responsible for cutting 5.6 million jobs.
After each recession since 1970, job-growth rates have decreased. Published reports indicate that even before the Great Recession, it was less than one percent a year and was only 2.4 percent in the 1990s and 1980s, according to the Labor Department figures.
Based on trends following recessions, I’m in agreement with economists who forecast it will be at least five years before the unemployment rate returns to more palatable levels – hence, the term, jobless recovery. Even then, I’m not sure it will happen.
Historically, consumer spending has been a key ingredient for economic recovery. But that won’t happen unless there’s a fundamental economic change.
This also means the tax revenue pie for governments at all levels will remain flat.
For good reason, Americans have returned to 1930’s money values. They’re becoming tight-fisted with their money and are demanding government accountability.
The housing bubble resulted in a high volume of excise taxes, but the high rate of foreclosures alters that scenario.
Big lender behavior
Talk to anyone who checks credit for consumers or small businesses. The aggregate level of bad credit is huge – largely caused by the predatory behavior of big lenders. They’ve nearly destroyed the livelihoods of small businesses with mega interest rate hikes for bogus reasons.
Small business has historically has been the main job-creation engine, but no more.
Small businesses do not have the financial firepower expand and create jobs. New credit card legislation does nothing to correct the injustices.
Instead of focusing on helping business, government at every level, is hindering the economic climate. Economic and political freedoms are being stolen each day by bad government policy (see this portal’s Public Policy section).
The largest employer in many communities is government. Public-sector agencies are still growing, while spending and taxing at ever-increasing levels. For the common good of all Americans, change is needed.
Businesses and consumers can no longer afford the status quo in taxes. Government must reform.
From the Coach’s Corner, here is the essence of the 2010 credit card law:
- Credit card companies cannot increase the rate in the first year until the introductory rate expires. The banks must give 45 days notice to change the rate.
- Unless two months past due, rates can’t be changed.
- The original interest rate must be granted once payments are on time for six months.
- The fine print will be easier to grasp.
- Activation and annual fees can’t exceed 25 percent of the credit limit in the first year; and will be unlimited after 12 months.
- Credit card statements must be sent three weeks in advance.
- Transactions can’t take place over the credit limit unless the cardholder agrees.
- The “universal fault” nonsense (if you were late one day on one payment, the other credit card companies jacked up your rate) is stopped and interest rates on existing balances must stay the same (see No.1).
- Companies can’t give students or anyone under 21 a car unless she/he has a co-signer or the autonomous ability to pay statements. Schools have to make public any credit-card marketing deals, and companies cannot stage publicity or giveaway events on or near campuses.
“Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.