7 Million More Job Losses Are in the Pipeline

The divergence between the reality easily observed in the real world and the heavily touted hype that "the recession is over because GDP rose 3.5%" is growing. It's obvious that another 7 million jobs which are currently hanging by threads will be slashed in the next year or two.

According to the latest Employment Situation Summary (Bureau of Labor Statistics) dated November 7, 2009:

Total nonfarm payroll employment declined by 190,000 in October. In the most recent 3 months, job losses have averaged 188,000 per month, compared with losses averaging 357,000 during the prior 3 months. In contrast, losses averaged 645,000 per month from November 2008 to April 2009. Since December 2007, payroll employment has fallen by 7.3 million.

Civilian labor force: 154 million
Employment: 138.3 million
Unemployment: 15.7 million
Sept-Oct. change in employment: -589,000
in unemployment: 558,000
Not in labor force: 82,575,000

It is staggering that 7 million jobs lost out of 145 million (the total prior to the financial meltdown) has created a 10.2% unemployment rate. The numbers here don't add up--"only" 190,000 jobs were lost in October, but then employment fell by 589,000?--but the point missing is how many jobs are hanging by a thread.

I recently traveled to Los Angeles to be interviewed by my polymath friend and media maven Richard Metzger, creator of the Dangerous Minds website.

Has anyone noticed that airports are commercial dead-zones peopled by zombie clerks suffering from terminal boredom?

One desperate young man had taken the unenviable job of hawking Chase credit cards via a weak pitch for a free ticket on Southwest Air (retail value $59). Since I like to arrive early for flights (perhaps scar-tissue remaining from being on TSA's "watch list" for months on end, and almost missing flights as a result--"papers, please!") I was able to observe hundreds of travelers stream by the young man's kiosk while he gamely voiced the pitch. Not one person even paused, much less stopped.

Translation: Up yours, Chase credit cards.

How many of these dead-zone airport retail kiosks will go dark next year?

The See's Candy kiosk: bored clerk rearranging pricey boxes of candy, no customers. Ditto the sunglasses kiosk, and every retail outlet except Starbucks, which was moving plain coffee and the pizza/beer establishment which did a brisk business around 7-8 p.m. with the "heading home Sunday evening" crowd.

I rented a brand-new 4-door Ford Focus--a nice car with plenty of zip--for $24 total, including all the ripoff airport and State of California taxes, with unlimited miles. $24 for all day, including all the new junk fees added to car rentals? Deal!

The red Mustang sat in the rental lot, a rather sad icon, while the cheapest compacts were rented and driven off the lot. What does that say?

Arriving early at the studio (natch), I had time to wander down one of the premiere open-air retail malls in the nation, the Promenade in Santa Monica. Other than one or two Asian tourists, no one carried a shopping bag of any size or type. This was noon on Sunday, a busy shopping day, and nobody was buying anything. Barney's Beanery was doing a good business but most other dining establishments were crypts.

Sauntering down blocks of America's standard-issue mall outlets--J. Crew, Apple, Pottery Barn, etc. etc.--the stores were empty though the sidewalks were busy.

Victoria's Secret was promoting 7 panties for $21--how much profit can VS rake in selling 7 panties for $21?--and the store was empty. Even the Apple store was a morgue.

Bored waiters were leaning on sidewalk cafe railings, and a few employees were sitting outside talking with their friends--no drinks, no food, the table was bare.

OK, here's the money shot. Recall for a split second I am a writer (for better or worse) and so my "job" is to observe people closely.

So a tres-chic young Caucasian woman with two adorable kids around 7 to 9 years of age pauses a few yards from me. The woman has the casually tony attire and slim figure of someone who either is a well-educated professional pulling down major dollars or someone whose spouse is pulling down major dollars in some yuppie gig (or both spouses are doing so).

The yuppie Mom pulls her wallet out of her upscale little purse as the two kids gather round and I am thinking, "She's going to give each kid a Jackson ($20) or at least a fiver just to blow on whatever strikes their fancy."

This is, after all, Santa Monica on a Sunday, and this is a yuppie Mom with the bucks to pay for high-end casual attire, hair coloring, personal trainer, gym membership, etc.

After digging around a bit, she extracts two pennies which she gives to her kids to toss into the water feature/fountain nearby.

I think this rather neatly summarizes the entire U.S. consumer and the future of the economy.

Doesn't anyone follow the threads of what is easily observable anywhere in America?

Consider for a moment one of the few businesses licensed to print money--towing companies with city contracts. What are the odds that these towing outfits are towing cars which no one ever claims? Heck, with tickets, towing and storage fees, the cost of reclaiming your vehicle can run into the hundreds of dollars in a mere day or two.

That is more than many vehicles are worth. So what's the net result? the towing companies' lots will soon be filling with junkers and their revenues will be falling as down-and-out citizens abandon their vehicles because they don't have the money to get them un-impounded.

Net-net, when the towing company's revenues fall then somebody's hours or job gets cut.

About once a month I take my Mom out to dinner in San Francisco, "the most European city in America" and a favorite city for those with disposable income. The city contains approximately three restaurants per resident (slight exaggeration) with a Michelin one-star establishment (i.e. excellent, superb, etc.) about every block in the better neighborhoods.

Yes, it is a splurge, but it's my Mom and it's our "quality time." So we chat with the waiters and waitresses, and on opera nights and the like, business is so good it seems impossible the word "recession" is even being bandied about.

But when it's slow, it's dead. It seems almost random, which nights are busy and which are slow, but the net result is far from random. A couple of places that we occasionally frequented a mere year ago are now dark.

A friend of ours has been trying to sell an investment house in a highly desirable zip code in a San Francisco Bay Area suburb. Built perhaps a decade ago, the house would have fetched $800,000 in a heartbeat in 2006, and our friend rejected an offer of $550,000 a year ago as absurdly low. This is after he spent a lot of money having the home repainted in and out, new cabinet doors installed, new carpeting, etc.

That was the only offer the property has received in over a year. Needless to say, maintaining the mortgage is killing him financially.

How many hundreds of thousands of families are in the same situation?

The Honolulu Symphony, which I enjoyed occasionally when I lived on Oahu, recently declared bankruptcy. How many other non-profit arts, theater and community groups are hanging by a thread? Hundreds, if not thousands.

Put together the anecdotal evidence and the next 7 million jobs to be lost are already in the pipeline. I could go on and on about the small businesses whose owners are preparing to close "if things don't pick up a big way soon" and all the other signs that a new wave of massive job losses is rising. But you know that already if you've walked around with your eyes open.

Comments

[User 353732]

In the New Economy jobs do not matter, especially if these are Middle Class jobs. The New Economy is now a Statistical phenomenon, where the new reality is what Govt Statistics say it is.

Govt. Statistics say that there is good economic growth that is about to turn into robust economic growth.
The three dominant leading indicators both unequivocally declare this to be so. These are: Wall St bonusses, Public Debt and Wash DC power. The trio is not merely up, but soaring. Statistical Growth will inevitably follow and the world will watch in amazement and dumb adoration.

In the New Economy there will ,soon, be no Statistical unemployment. Anyone receiving transfer payments and gorging on entitlements will be deemed to be " fully employed" since the US Regime has determined that parasites are the true sources of value creation and old fashioned workers who make real things for real people are a blight on the earth; just another form of pollution really; traditional work, frugality and prudence are now crimes against the State and the People.

No( former) Middle Class person claiming to be unemployed will be counted since the Regime knows that households formerly known as Middle Class are populated with slothful, pathological, liars.

Statistically, the US Regime will soon determine ( unless all the ungrateful whining about no jobs, no income, no credit, no home stops instantly) that the Middle Class does not really exist and Main St is a figment of the imagination of a non existent Middle Class.

Yes, there once was a Main St and a Middle Class in the bad old days of the Old Economy and Liberty, before the Soviet of America repealed the obsolete laws of economics, nature and morality. Now, in this New Economy, Main St and the Middle Class are just lingering bad dreams. Only WashDc, Wall St and Big Media are the waking reality. The Govt. has the Statistics to prove it.

2009 Nov 17 11:22 AM

[philais]

The 7,000,000 ( I like to show numbers) jobs lost will be re-imported through the magic of communications and internet.

All kinds of call centers from tech support, banking support, reservations, customer service, telecommunications inquiries, financial trades, anything that can be done by phone will be lost to Americans (all ready happening but will accelerate) here in the US then be re imported from India and others. Companies doing it will escape without consequence or conscience. They will tout their ever expanding profit margins in this "jobless recovery" and everyone will cheer their workers incredible increase in productivity! The beautiful thing about this scheme (or scam) is that US companies don't have to report how many jobs they have outsourced (their secret).

With punishing US corporate tax rates along with labor taxes and Medicare taxes etc. rules , regulations and soon to be increased health care costs being incurred, the big corporations don't have to take it anymore. They simply move "service labor" out side the US and import it back without consequence under the guise of "free trade."

There is nothing "free trade" about this. Now, I'm not a labor advocate, I'm a small businessman who is forced to stay here in the US and try to compete.

Exported service jobs and then imported labor services by all large and small corporations should be subjected to a "labor tariff" It is interesting that the Council on Foreign Relations basically takes the position on exported labor as "Sorry Charlie" and that jobs would leave anyway...
cfr.org/publicatio... ... is crap! The only thing FREE is to the corporations doing it.

This is basically imported labor with having to import the bodies. We all worry about establishing tariffs and the resulting trade wars but when will we discuss requiring our US companies to report exported real jobs/imported bodiless labor?
Anyone here of a labor tariff? It might be time to consider it. What trade war would occur?

2009 Nov 17 12:55 PM

[CoverIsBetter]

"Put together the anecdotal evidence" Is it that hard to collect some facts to discuss here. The numbers add up fine. You are only posting sets of dis-contiguous time periods that could never add up.

What is "tres-chic" anyway? Are you afraid you can't properly identify "chic" with any accuracy. Have you been out on the island smoking pot and writing fiction so long, you don't know "chic"?

"how many jobs are hanging by a thread." How many?
Maybe we should just worry all the time about things that might never happen? Jobs that may never be lost?

"The red mustang sat in the parking lot".. ? Do some travel. Learn your own country. Over here on the East Coast, the red mustang sits because we take the Cadillac.

2009 Nov 17 01:31 PM

[Tom E.]

The countries that are taking advantage of the internet to outsource US business and jobs - do not allow other countries with lower labor costs to do the same in their country - reason, they want to protect domestic jobs.

For instance, India does not allow Chinese to have labor permits to take work from Indians, even though the Chinese are willing to do the work for less.

We in the US seem to be the fool or the patsy for everyone else.


On Nov 17 12:55 PM philais wrote:

> The 7,000,000 ( I like to show numbers) jobs lost will be re-imported
> through the magic of communications and internet.
>
> All kinds of call centers from tech support, banking support, reservations,
> customer service, telecommunications inquiries, financial trades,
> anything that can be done by phone will be lost to Americans (all
> ready happening but will accelerate) here in the US then be re imported
> from India and others. Companies doing it will escape without consequence
> or conscience. They will tout their ever expanding profit margins
> in this "jobless recovery" and everyone will cheer their workers
> incredible increase in productivity! The beautiful thing about this
> scheme (or scam) is that US companies don't have to report how many
> jobs they have outsourced (their secret).
>
> With punishing US corporate tax rates along with labor taxes and
> Medicare taxes etc. rules , regulations and soon to be increased
> health care costs being incurred, the big corporations don't have
> to take it anymore. They simply move "service labor" out side the
> US and import it back without consequence under the guise of "free
> trade."
>
> There is nothing "free trade" about this. Now, I'm not a labor advocate,
> I'm a small businessman who is forced to stay here in the US and
> try to compete.
>
> Exported service jobs and then imported labor services by all large
> and small corporations should be subjected to a "labor tariff" It
> is interesting that the Council on Foreign Relations basically takes
> the position on exported labor as "Sorry Charlie" and that jobs would
> leave anyway...
> www.cfr.org/publicatio... ... is crap! The only thing FREE
> is to the corporations doing it.
>
> This is basically imported labor with having to import the bodies.
> We all worry about establishing tariffs and the resulting trade wars
> but when will we discuss requiring our US companies to report exported
> real jobs/imported bodiless labor?
> Anyone here of a labor tariff? It might be time to consider it. What
> trade war would occur?

2009 Nov 17 01:36 PM

[Leftfield]

Yes, it is easy to see "7 million jobs to be lost are already in the pipeline," yet Washington's focus is about adding additional crushing costs onto the economy. And endless borrowed stimulus and bailouts to value-subtracting uses
I would be relieved if it were only incompetence. I believe it is actually to keep favored constituencies satisfied, marginalize and punish the non-influential productive private economy sectors and seize total control when things inevitably implode. A quick move, like TARP.
I keep hoping it's mere incompetence.

2009 Nov 17 01:38 PM

[RQuizmo]

Your comments about towing companies with city contracts is off the mark. I own a towing company with a city contract in Los Angeles. As the economy weakened, people drove less, law enforcement has become more empathetic towards certain violations they could impound for but choose not to as everyone has friends, family, etc. in the same boat. With less disposable income, people have become much more aware of reading parking signs. The result, I have had to trim my staff through lay offs or attrition by about 15% over the last year as well as cut hours and institute furlough days for the rest of my staff. I first reduced my pay before I hit on my staff. We all prosper or feel the pain together at my business. How I wish I had the printing press you write of to print up money, I could sure use some!

2009 Nov 17 01:55 PM

[conceptwizard]

Economists know what it will take to put the country back to work; debt relief, loan modifications, wage growth and full employment. But it will require a fundamental shift in ideology; a rejection of neoliberalism and a strong commitment to rebuild the middle class. Obama can either help in that process or follow the beggarly path to early retirement. So far, there's no reason to be hopeful.

2009 Nov 17 08:26 PM

[proxyjoe]

Around here, most folks live normal frugal lives and don't try keeping up with big spenders putting on the Ritz (like the phonies of CA). But, the stores all have a healthy crop of shoppers on weekends and the restaurants and clubs are full with waiting lines too. The upscale car dealers (MB, Lex, Inf) all seem to be doing brisk business.

Soo happy to see all the malaise and rot setting in around Mexifornia and not where I live.

2009 Nov 18 01:57 AM

[snakyjake]

I think the main reason we haven't seen a huge collapse is because the unemployment benefits keep getting extended. I know a dozen people on unemployment and living like they're semi-retired. They're still making close to $30K on unemployment, and some had severance and vacation pay. They also have their 401K's to spend if they choose.

In the construction business, I see business owners "robbing Paul to pay Peter". Juggling money keeps these failing businesses operating.

Our economy also has dual incomes. Unlike decades ago when one person was out of a job, the whole family was out of a job. Now, when one is out of a job, it is likely the other still has their job.

For the people who are in serious debt, and loss of work will sink them. For others that lost a job, but have the other spouse working, and not in serious debt, it is merely a tight budget.

My belief is that one year isn't enough time to shake all the inefficiencies and failure out of the economy. And even longer when you have economic manipulations.

I'm waiting for unemployment extensions to end. People to lose hope. People giving up. Babyboomers to retire. And a young unemployed generation without work experience to create a huge gap.

...in the meantime, my industry sees 1000's of H1B workers. And more work going overseas.

2009 Nov 18 02:07 PM

[philais]

Conceptwizard:

What? What?
So you say we can fix this if we let everyone off on their personal debts, refinance mortgages at 2% and price all wages starting at $30 an hour and pay to have anyone not having a job to dig holes in a field, to get to the magical 100% employment? And that will save the economy?
Crazy!
You need a lesson in economics. mises.org/


On Nov 17 08:26 PM conceptwizard wrote:

> Economists know what it will take to put the country back to work;
> debt relief, loan modifications, wage growth and full employment.
> But it will require a fundamental shift in ideology; a rejection
> of neoliberalism and a strong commitment to rebuild the middle class.
> Obama can either help in that process or follow the beggarly path
> to early retirement. So far, there's no reason to be hopeful.

2009 Nov 18 08:18 PM

[philais]

What it takes is bankruptcy in order to reprice assets that are over priced. It takes less government not more, free unfethered capitalism not socializm, less government corporate and personnel taxes.

Full employment is a farce. The real job builder is bringing the nation to full industrial capacity. Employment follows.


On Nov 18 08:18 PM philais wrote:

> Conceptwizard:
>
> What? What?
> So you say we can fix this if we let everyone off on their personal
> debts, refinance mortgages at 2% and price all wages starting at
> $30 an hour and pay to have anyone not having a job to dig holes
> in a field, to get to the magical 100% employment? And that will
> save the economy?
> Crazy!
> You need a lesson in economics. mises.org/

2009 Nov 18 08:26 PM

[samy]

www.Hound.com is a good source of jobs because it shows you jobs from employer career pages. The site also does not accept any advertising like other jobs sites which charge employers to post ads on their site. In contrast, our site is a research site that investigates jobs posted on employer websites and shows you our research. I had an actual good experience with the site and can say truthfully that I enjoyed using it like thousands of others have.
The site has more jobs direct from employer career pages than any other website. This is a good way to track down jobs because these jobs are often not advertised.
All types of jobs that are available in Hound are:
Las Vegas jobs
Las Vegas Casino jobs
Casino jobs
Hound
also has the Las vegas newspaper and also advertises in
Las Vegas Employment
Las Vegas Classified for Las Vegas apartment.
So if you are in search of a job in Las Vegas then do visit Hound.com.

2009 Dec 01 04:37 AM