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Ear to the Ground

Shrinking Payrolls Worry Economists

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Posted on Mar 20, 2008

A sharp jump in the number of Americans filing for unemployment has brought the four-week average to its highest level since the aftermath of Hurricane Katrina. Last week,  378,000 new claims were filed. Roughly 2.8 million workers currently receive unemployment benefits.

It’s not a good sign for an already ailing economy that, as the Associated Press reports, some economists think is already in recession.


AP via Google:

The current economic slowdown, which many economists believe has already turned into a full-blown recession, is starting to show up in the labor market in terms of higher layoffs and weaker hiring numbers.

The total number of payroll jobs fell by 63,000 in February, an even bigger decline that the drop of 22,000 jobs in January, which had been the first monthly decline since mid-2003.

“We have no doubt that the trend in claims is upwards and is approaching the levels seen in the earlier stage of the recession in 2001,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

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By Lilith, March 25, 2008 at 4:42 am #
(Unregistered commenter)

Thank you Kiwi.

LOAF has been a personal philosophy and practice of mine for decades. I live in a county in California that is both a food producing rural and technically advanced producing urban economy. We have strong local support for producing and buying locally.

What I would like to see is how the spirit and logistics of LOAF can be applied to larger scale production, such as computers, household appliances and such, that depend on large scale production facilities for both the raw materials (i.e. steel industry), and for the assembly of small to larger components. Yes we can create locally produced end products, but how to keep the faith, so to speak, with our need for larger production facilities and such.

One thing I know that works is employee owned business, as at least one Steel mill did to save that company back in the 80’s. I have been both an employee and an employer, so I have seen it from both sides. I strongly believe that the employees must also benefit from the work they do beyond a pay check. They need to own part of the company they work for, because without employees there would be no company. They are partners working towards the same goal, not just replaceable cogs, as they are currently treated as. Pride in ones work only comes when one feels not only part of the bigger picture, but benefits from it as well. In other words they see and profit by the results of their work and input. Unfortunately most people would think of this as communism and would reject it out of hand. I am not talking about communism, but about showing and giving respect and proper recompense for those who make your company prosper. Gratitude is a word that comes to mind. Not paternal jesters, but gratitude in behavior by the owners, and the treating of employees as peers, with inalienable rights as employees to be more than just cogs and adversaries.

I hope this makes sense.

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By Kiwi, March 24, 2008 at 4:15 am #

Well said and thanks for your comments Lilith and VillageElder.
Another approach is the LOAF programme especially for food though the principles can be adapted for most anything like wooden furniture.

L   Locally produced

O   Organically grown

A   Animal friendly

F   Fairly traded

I have always been astounded by how much the large food corporations spend and the effort they put in to to discredit the organic food movement, the anti obesity campaigns and even child health campaigns.
Face it a slim, healthy, non-smoking,breastfeeding, moderate drinking population would mean massive profit loses for some companies. Start small- plant a lemon tree or even a pot of herbs on the windowsill means one less thing to buy.

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By ApprxAm, March 23, 2008 at 4:54 am #

Where are all of the indignate libertarians on TV to condemn the federal intervention in the Bear Sterns/ JP Morgan Chase give-away. Chase, CitiGroup, et al, are the reason the market has become so shaky in the first place.

The term “Moral Hazzard” was thrown around so freely not two weeks ago for months by libertarians when any assistance to mortgage holders were proferred, but no substantive opposition by any significant group, except the half-ass one given by WSJ editors, about the Bear Sterns-to-Chase fiasco.

Class warfare works both ways, and when Republicans use the term, it’s sickening and self-serving as usual.

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By Purple Girl, March 22, 2008 at 7:30 am #

Let’s send the ‘financial Wizards’ , the Inc upper management and board members and ‘Public Servants’ to the countries they sold US out to. How much do you think Alan Greespan would go for on the Auction block, How about Dick?
No seriously they claimed our resources as their collateral- yet they were stolen assest. They lied to these foreign investors about the ability to repay THEIR debt. Therefore they should be held accountable by those who they Owe. They have not just spent Decades selling US on the international Auction block - but nearing a Century. Once the psuedo ‘agency’ called the ‘Federal reserve ’ was formed by Mega Banking industry- we were captured , shackled and led up the stairs to the ‘block’. Let China and UAE decide how they will get a return on their investment out of these deadbeat Gamblers.They have run amok in the World Casino wrapped in our Flag and waving Our Credentials- Identity Theft. either they pay for their Theft Here - or they pay for it over there.

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By cyrena, March 22, 2008 at 12:14 am #

VillegeElder,

Thanks for this. And, I wanna thank Lilith for her contribution as well, since that was sort of the point that I was trying to get at earlier. WHO KNOWS what the real unemployment rate is?

Meantime, I’m wondering what item the progressive community could choose to boycott, that is only ‘semi-necessary’ and thereby more likely to gain the participation of those who aren’t quite as committed. (or committed at all).

I suggested gasoline earlier, if only because that would seem to serve more than one purpose. It is more than semi-necessary I suppose, for those who are still employed, and need to rely on it to get to work. OTOH, how much of a ‘sacrifice’ would be involved in using public transportation instead, if it is available?

What else is only semi-necessary? Well, I might be run out of dodge for suggesting this, but…how about HOLLYWOOD and similar forms of entertainment?

Is that un-American? I mean, food and clothing are pretty necessary. But, could we do without going to the movies? (I can and have for years).

Or, how about booze? (humm, that might actually be a necessity for many these days).

Can anybody think of anything else?

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By Lilith, March 21, 2008 at 7:11 pm #
(Unregistered commenter)

Thank you, that makes it a lot clearer. It even makes some kind of sense, though somewhat perverse when held up against reality. The thing about the military personal not being counted I think did happen in the 80’s, though it may have been the 70’s while I was still in the Air Force Reserves, which is why it hit home for me and for my then full time regular Air Force husband.

Having been on the receiving end of political expediency with benefits being cut to pay for tax breaks for the top 1%, more than once (I am permanently disabled and chronically ill with several degenerative genetically caused disorders), I am hyper sensitive to being marginalized and sacrificed by political jerry rigging of facts and figures.

Speaking of consumer excess, in the past ten or more years I have been made nauseated by the abundance of literal junk for sale in most stores. I can not stop thinking and visualizing all the resources I see before me that are being used to make so many throw away items. We have become addicted to easy disposal of used goods. We are a disposable culture. Even expensive items like cell phones are marketed and produced in such a way as to promote easy disposal and replacement. In my mind and heart this is by far the greatest consumer sin of our culture today. Think about it, when we say something is not natural, i.e. artificially made or made of, we tend to have this vision that the material comes from outside of nature, but EVERY THING that we make, use or consume COMES from nature and our limited supply of natural resources. So this really hits home when we are asked: Paper or Plastic?

I know that the driving force of all this mass junk production and disposable consumerism is to keep people employed and to create economy, but we need to find a different and sustainable way to keep people employed. This outdated, short sighted version of economic development is broken and needs to be replaced by a new model of economic livelihood. Simply over manufacturing in mass quantities is a broken system that benefits people only in the short term, it does not sustain an economy in any real way. Yet we are seduced by the simple application and quick gratification of this process that we, especially economist, never look beyond this archaic economic system.

But this also begs the question of how else are we to keep such a large world population employed? In simple terms, I believe that the main reason other forms of smaller and diverse forms of economy are not even considered is because these alternative systems also mean that many more people share in the lion’s share of the profit, rather than just a small upper economical class. Think about it, the corporate structure has been around since the beginning of civilization with the higherarchy of top down management, with the top reaping the greatest portion of the profit: i.e. Kings, Warlords and the like. Why would these people ever want to change that? Hence it has lasted as the preferred economic system for over 5,000 years.

We need to think outside that box and come up with a whole new economic paradigm if we, as a species, is to survive, and to not regress back to times of lesser stability and quality of life.

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By VillageElder, March 21, 2008 at 6:26 pm #

The state employment services only count those who are “receiving services”.  Should an unemployed person lose confidence in the ability of the state ES to assist in the finding of a job, that person is no longer counted as unemployed since no services are being rendered.  This dates back to the Nixon years.  Unemployment was approaching 6%, perhaps 5.9% officially.  There came to pass the creation of a new underclass – those who were permanently unemployed .  It stood to reason that those who preferred permanent unemployment would abandon the services of the state ES after benefits ran out.  (At the time it was conservatively estimated that 6% of the eligible workforce was part of this perennial underclass.) 

Discussion of the underemployed and the working poor as those being on the brink of personal economic disaster with the attendant social and psychological problems sparked attempts to created new safety net programs.  Underemployment is the situation workers (blue collar or technical/professional) are working in positions paying far less then they would earn in a “full employment economy.  Given the stance of the repugs at the time new “entitlement” programs would not be considered.  Nixon did convert some of the entitlement funds into block grants to the states to use for social or economic development programs.

As David noted in the article the “trickle down” didn’t.  Tax credits and other incentives insured that the corporatists would be secure as tax dollars made that magical conversion to corporate profits.

Running away from rampant consumerism has been a “battle cry” for years now.  In this society a “battle whine” might be a better description.  Boycotts can have some success.  The problem always remains convincing people to participate.  Becoming a non-consumer, or limited consumer, is a decent life style which helps minimize the clutches of the corporate beasts.  Buy locally.  Support locally owned stores.  Buy used or in thrift stores.  Avoid consumer credit purchases.  At least you will sleep better – I do.

Can the progressive community agree upon an item to boycott.  One item that is only semi-necessary so those whose commitment is not as strong would still participate as a feel good excerise.

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By Aegrus, March 21, 2008 at 8:33 am #

I’m still gainfully employed (For the time being, anyway), and I would be more than happy to lend myself to such boycotts. Consumerism is a plague, and I try my damnedest to convince people I know to stop spending so much.

It’s really odd trying to explain these ideas without being perceived as some weird conspiracy nut, though.

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By Aegrus, March 21, 2008 at 8:28 am #

Hey now, one step at a time. I’m not opposed to a month, or even six months, of boycott. I think even the worst of the worst deserve an ultimatum first, though.

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By Lilith, March 21, 2008 at 5:22 am #
(Unregistered commenter)

When will, or can there ever be a real accounting of those who are unemployed.

So far as I know, only those currently receiving unemployment benefits are part of the “Unemployment Rate”. Way back when (Reagan Era) those leaving the military, but not entering a civilian job, yet being on unemployment where taken off the list (if memory serves me). Also those who could not get a job and ended up losing their unemployment benefits when they ran out, are off the list. So are all those of work age and able bodied people on any form of aid, as well as those who may be disabled, but can do at least some kind of work (be it at home or in the market place) yet can not get a job, are off the list. Let alone all the homeless who would love to work, but can’t, for what ever reason. So too, I think, are women who are married who loose their job and yet who’s husband is working, is off the list.

So, if they keep taking unemployed people off the list, then just what is the state of unemployment and what use is the current rate in deciding the health of the economy. If those who got on the rolls today, fall off after their benefits run out, but have no job, that does not mean unemployment has gone down, yet that is how it is reported.

Orwell had it right. The truth is what those in power say it is, or so it seems of late ….

- From one who is off the roles due to the accident of genetics——but not lacking the drive to make it on her own, just the means———

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By felicity, March 20, 2008 at 6:50 pm #

Aegrus - Sounds like you’ve given up. Don’t. Forget about a week - think months. Unless, of course, you’re perfectly comfortable and happy with things as they are.  A significant number of us aren’t.  And the only thing we have going for us is the power of our purses.

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By cyrena, March 20, 2008 at 5:56 pm #

I’m with you here Felicity.

Actually, I’ve been doing this for several years now. At first, it was because I had absolutely no choice. (being among the first group to fall after 9/11 - which actually put far more Americans out of work than anything since).

Once I recovered enough to be able to obtain the very bare necessities, I’ve made it a point to ONLY purchase those things, while admittedly, I still haven’t recovered enough to purchase anything more, even if I wanted to.

Still, it serves as great preparation (weaning from and training for) even more difficult times ahead.

I was noticing the statistic here in the article…

“Roughly 2.8 million workers currently receive unemployment benefits.”

That’s CURRENTLY, and I think that’s an important distinction, because it DOESN’T include those who lost their jobs over the past 7 years, and may or may not have been able to collect unemployment.

More importantly, even for those who COULD, and DID, that only happens for 6 months, and even that depends on the local laws of the particular state. How many of those who ‘run out’ of their unemployment compensation ever manage to return to full employment? The reality is, not even 50%, though I don’t have any recent stats handy.

Those who DO find alternate work, rarely (if ever) manage to earn what they were earning before. (which is why so many Americans now work more than one job).

And yet, not only the credit card companies, and the banks, continue to profit from consumer spending, we see that other major industries do as well.

Now if we could boycott the gasoline the way we were able to boycott grapes, I think that would get the most punch for the effort. Hit the major offenders.

Of course boycotting grapes was one thing. Boycotting gas is more difficult for the average American, (especially those who DO still have jobs).

Still, if Americans would do a bit of sacrificing, (like using public transportation in place of their vehicles) it could put a major dent in THOSE profits.

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By DennisD, March 20, 2008 at 5:51 pm #
(Unregistered commenter)

Shrinking Payrolls Worry Economists - but not our government - the rich continue to be well taken care of and that’s their only focus.

Only the economists that are unemployed are the worried ones, ask them if we’re not in a recession.

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By Aegrus, March 20, 2008 at 5:12 pm #

Absolutely. I vote we have a buy nothing week. Hemorrhage these bastard corporate institutions, and lets see how many our government decides to bail out.

That’s a real moral hazard for ya.

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By felicity, March 20, 2008 at 4:59 pm #

In solidarity with those who are jobless, we who are still able to shop ‘til we drop, quit shopping for anything but serious necessities. 

Our consumer economy depends on our consumption and that defines our clout. Example - credit card companies don’t like it when we don’t allow them to charge us 25% interest because we don’t use our credit cards.

Way back when, we boycotted grapes in solidarity with farm workers.  We boycotted beef - a move from which the beef industry has never fully recovered. The big guys who think they can bleed us dry will only sit up and take notice when our behavior cuts into their profits.

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By Christopher Robin, March 20, 2008 at 4:57 pm #
(Unregistered commenter)

Economists usually discover a problem after…


1) It’s already in progress.

2) The stock market is not growing at double digits. 

The standard of living once used to measure the health of the United States economy is now passe, that’s only the subject of some radical lefty economists…not to be taken seriously.

Well those eating the jelly donuts haven’t dropped enough crumbs to keep the Gerbil spinning it’s wheel…poor thing is too weak, and all the rewards go to the top or overseas….By passing Mr Gerbil’s cage. along with Mr. Gerbil’s wage…and now after supercomputerized credit rating harrassment….Jelly Donuts discovers Gerbil’s a terrible credit risk.
Now we can’t even borrow crumbs to live on.

Good thing China/India/Mexico is ready to keep Jelly Donuts living in the standard which , Jelly Donuts has become accustom to….

I think?

Their big consumers right?

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By Aegrus, March 20, 2008 at 4:02 pm #

Thank you for another unsubstantiated claim with no evidence to support your theory. If you thought Hillary or McCain were vetted before, you have no friggin idea what’s going to happen to them in the next few weeks.

Silly, silly surrogate.

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By Aegrus, March 20, 2008 at 3:21 pm #

hahaha, you are actually going to talk about Rezko? The issue Obama has been vetted on the most this campaign season? The issue Barack has more than successfully proved is based on really, really thin non-logic?

Sorry, Barack Obama is still the best candidate we have to choose from at this point in time.

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By Aegrus, March 20, 2008 at 1:42 pm #

Bush survey says: America’s doing great.

Do you really think John McCain can win on a Republican economic policy while jobs continue to get shipped over seas or downsized? Wake up, fear mongers. The recession is here, and we need someone who can face these problems boldly and challenge established thought.

That person is Barack Obama.

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