U.S. Creates No Jobs In August: Zero, Nothing

WASHINGTON — The struggling US economy added no jobs in August, a far worse reading than expected, official data showed Friday.
The Labor Department said the unemployment rate remained unchanged at 9.1 percent for a second month amid the zero job growth.
After a series of weak economic data, analysts had lowered their expectations for job growth, with the average estimate at net 70,000 in August.
That would be well below the 100,000 seen as necessary to support a steady unemployment rate, according to Briefing.com economists.
Employment in the private sector, which has been the main engine for jobs growth as revenue-strapped governments shed workers, "changed little" in most major industries, the Labor Department said.
The unchanged jobless rate was expected.

Twenty Percent Of American Men Don't Work? Where's The American Outrage

FORTUNE -- Has anyone in Washington noticed that 20% of American men are not working? That's right. One out of five men in this country are collecting unemployment, in prison, on disability, operating in the underground economy, or getting by on the paychecks of wives or girlfriends or parents. The equivalent number in 1970, according to the McKinsey Global Institute, was 7%.
Both political parties have proven their talent in ginning up outrage over the federal budget, whether it's spiraling spending or millionaires collecting tax breaks on private jets. So today a tiresome, and dangerous, debt drama unfolds in real time, freezing leaders in both parties in their respective partisan corners. Are these same leaders capable of confronting the fearsome fact that 4.3 million Americans have been jobless not just for months--but going on years? We are in danger of losing a generation of work-habituated Americans, especially men--and lawmakers can't see their way past November, 2012.
This is a conversation that goes beyond a stubbornly high 9.2% unemployment rate and last week's unnerving news that company layoffs are ticking up again. While we all know there is a job shortage, employers are increasingly talking about a "talent shortage" -- they can't find qualified workers even for the jobs that are available. "We found that 30% of companies surveyed had openings for six months or longer, and can't find the right person," says Susan Lund, research director for the McKinsey Global Institute.
With slack demand, companies can afford to be pickier about who they hire -- and commonly steal away already-employed workers rather than dip into a riskier pool of people who have been out of work for months or years. "As long as there is slow demand, [they say] 'I can delay hiring and when I do hire a person it's the perfect person,'" says Jeff Joerres, president and CEO of ManpowerGroup.
Google (GOOG) has anywhere from 1,500 to 2,500 jobs open at any given time that take months and months to fill, says Laszlo Bock, the company's senior vice president of people operations. And it's not just computer and engineering skills that companies need. Frits van Paasschen, CEO of the Starwood (HOT) hotel chain, says "we have a whole set of jobs"—like international tax accountant—"where we can't find" qualified applicants. Joerres says the No. 1 need for companies right now is sales person: Someone skilled not only in personal relations but also able to master the details of an integrated supply chain.
All three executives spoke at an Atlantic magazine-sponsored jobs forum last week that exposed a stark disconnect between the jobs that are available—and the increasingly rusty skill-sets of those who are unemployed, especially for long periods of time. People have "no idea what skills they should have to find a job," says Bock.
That's a place where businesses have to start stepping up to the plate. It's true that McKinsey reports an expansion of training programs. And there are companies like Delta partnering with a state university to produce airline-ready managers and associations like the Manufacturing Institute working with community colleges on certificate programs. But Joerres says a lot of companies don't offer training for prospective employees because—with slack consumer demand and weak job market—they don't have to. "If they don't have to, they aren't going to," he says.
The longer a worker is unemployed, the farther he or she falls behind in sellable skills in a fast-paced global economy. But there is an even more fundamental question behind the rise in long-term employed rates: Are our public policies contributing to the rise of millions of Americans who lose the habit of work?
Whether you believe (as some economists do) that unemployment insurance discourages immediate job searching—or not—it's worth asking whether the American "unemployment" system should more closely follow a program like Germany's "re-employment" system, which cut stubborn long-term unemployment rates in that country.
And then there is federal disability insurance, where the percent of American adults collecting checks has doubled since 1989 -- even though the American population isn't any less healthy, or more mentally disabled (the fastest growing disability claim). "It is difficult to overstate the role that the [disability program] plays in discouraging…the ongoing employment of non-elderly adults," concludes a study by MIT's David H. Autor and the University of Maryland's Mark Duggan.
If that's not enough to grab the attention of political leaders, here's a 10-year peek into the future of the U.S. labor force if current trends continue: A continued expansion of workers collecting income from disability rolls plus another four million high school dropouts--on top of today's 15.4 million.
And yet, according to a ManpowerGroup report, at the same time companies will face an "acute talent shortage."
Where's the outrage over that?

March Jobs Report: More Economic Hoodwinking And Bamboozlement From Obama

Larry Johnson - aps up Obama economic “facts” like a dog drinking from a toliet bowl. The so-called good news from today’s jobs report is bogus. Pure and simple. Just look at the facts (click on this link to read the actual BLS figures for yourself).

Let’s start with the civilian non-institutionalized population. From March 2010 thru March 2011 this figure increased by 1,841,000 new people.

So what happened to the civilian labor force? It shrank by 489,000 people during that same 13 month period. Get this straight–the number of non-institutionalized people increased by almost two million but the labor force declined by approximately 500,000. Where did these people go? If you deliberately exclude almost a half-million people from your labor pool then it is easy to show the unemployment rate falling.

So how many new folks actually got a job between March 2010 and March 2011?

Nine hundred twelve thousand aka 912,000. Now divide that by 13 months. The result is an average of 70,154 new jobs entering the market each month. This is not even close to keeping pace with the growing population. If you divide 1.8 million by 13 you get 141,615 new folks on average increasing the civilian population. This means you need at least 100,000 new jobs per month just to keep pace with population growth. We have not achieved that figure during the 13 month period the BLS uses in this set of stats.

Sorry to pop your bubble, but this so-called good news on the jobs front is ephemeral and misleading. Don’t take my words. Do the math yourself.

Unemployment Rises Unexpectedly 95,000 Jobs Lost. Heck Of A Job Barry Obama!

Protein Wisdom - The U.S. economy unexpectedly shed jobs in September for a fourth straight month as government payrolls fell and private hiring was less than expected, hardening expectations of further Federal Reserve action to spur the recovery.

Nonfarm payrolls dropped 95,000, the Labor Department said on Friday. Private employment, a better gauge of labor market health, increased 64,000 after rising 93,000 in August. A total of 77,000 temporary jobs for the decennial census were terminated last month.

Analysts polled by Reuters had expected overall payrolls would be unchanged, with private-sector hiring gaining 75,000.

The government revised data for July and August to show 15,000 more jobs lost that previously reported. It also said its preliminary benchmark revision estimate indicated employment in the 12 months to March had been overstated by 366,000.

Obama Stimulus Plan: Homelessness Up 50% In New York City

MYFOXNY.COM - If you think you've been seeing more people sleep on city streets, statistics back up the perception. The homeless population living on New York City streets has gone up 50 percent in the past year, according to city statistics reported by the HellsKitchenLife.com blog.

The New York City Department of Homeless Services conducts a yearly survey of the streets of the city to count the number of homeless who are not in shelters. The HOPE survey was conducted in January 2010.

The number of homeless in the borough of Manhattan was up 47 percent in the past year, according to the count. The 2010 count had 1,145 people living in the streets. That is up 368 from 2009.

Brooklyn had the biggest increase of any borough. It saw a homeless increase of more than 100 percent in 2010.

More than 1,000 people now live in New York City's subway system -- up 11 percent in the past year.

While the numbers are alarming, they are still at historically low levels and the ratio of homeless to the general population remains low compared to other major cities, according to the city. The HOPE survey showed a 29 percent drop in homelessness from 2005.

DHS works to prevent homelessness and also provides short-term emergency shelter. The agency seeks to help homeless individuals move from shelters back to permanent housing.

For example, the DHS says it provided temporary, emergency shelter to 8,230 families with children -- equating to 25,204 adults and children in July. But the agency says shelters have seen fewer families. From October 2009 through June 2010, shelters had 11 percent fewer children, who are now back in homes of their own

10 Signs The U.S. Is Becoming a Third World Country

Activist Post - The United States by every measure is hanging on by a thread to its First World status. Saddled by debt, engaged in wars on multiple fronts with a rising police state at home, declining economic productivity, and wild currency fluctuations all threaten America’s future.

The general designations of the ranking system for world status date back to the 1950s, and have included countries at various stages of economic development. Since the Cold War, the definition has come to be synonymous with repressive countries where a wealthy class of ruling elites segment society into the haves and have-nots, many times capitalizing on the conditions that follow an economic crisis or war.

While much of the world is still mired in poverty, the reduced cost of innovative tools such as computing and connectivity ironically puts traditional Third World countries at the forefront of a new lean-and-mean economy that is based on ideas of empowerment for the disenfranchised. For better or worse, the world is leveling due to Globalism. However, America and other over-leveraged countries face this re-balancing of the globe at a time when they have dwindling resources. We can speculate about who and what is to blame for America’s fantastic fall, but for the purposes of this article we shall focus on the obvious signs that the United States is beginning to resemble a Third World country.

1. Rising unemployment and poverty: Unemployment numbers, food stamps, and home foreclosures continue to reach new record highs. The ugly reality of those numbers was recently on display when 30,000 people showed up to apply for public housing in East Point, GA for 455 available vouchers. Fights broke out, people were fainting from the heat while in line, and riot police showed up to handle the angry poor.

2. Economic dependence: The United States finished 2009 with a debt-to-GDP ratio of 85%, according to the International Monetary Fund (IMF). The current trend projects the United States to finish 2010 at 94% and 2011 at 98%. The 90% level has become the IMF’s make-or-break point for countries hoping to grow their way out of debt. If the government debt load climbs above 90% of GDP, economic growth slows so much that growth is no longer a viable solution for reducing that debt, and the IMF insists on austerity measures. Surpassing this debt threshold has also caused China’s lead credit rating agency to cut America’s credit rating.

3. Declining civil rights: Everyday freedoms are often a casualty of a society in collapse. As the anger of the populace mounts in response to declining economic conditions and political corruption, the government counters by increasing draconian measures that restrict the political rights and civil liberties of its citizens.

America is becoming a country like China, which has one of the lowest scores according to Freedom House. In America, private discussions and movements are monitored, free speech is corralled, the freedom to assemble for protest is by government decree, and independent thought that questions the political system is increasingly looked upon with suspicion. A final indicator is when the government insists upon secrecy for its own actions, while new laws and systems are created to put the individual under nearly constant surveillance.

4. Increasing political corruption: When political corruption becomes the accepted norm, as opposed to the exception, then there’s a good bet your country resembles the Third World. Congress and all major institutions face a growing crisis in confidence, where a record-low 11% of the population believe Congress is doing a good job. It now seems obvious to all observers that big corporations directly control the agenda in Washington — much like typically corrupt Third World countries.

5. Military patrolling the streets: The rise of a militarized police state is a hallmark of most Third World countries, particularly in times of rapid economic collapse. America’s declaration of the War on Terror has created a constant threat to National Security that has allowed for the military to be deployed on American soil. Building upon the War on Drugs, this has created a fusion between the military and local police, where military-grade weapons and tactics are being used against American citizens in a cascade of violent confrontations over non-violent offenses. Military checkpoints are moving farther inland, away from meaningful border control functions, and a full-blown military presence in American cities has been planned by the U.S. Army War College.

6. Failing infrastructure: As 46 of 50 states are on the verge of bankruptcy, cities are going dark, asphalt roads are returning to the stone age, and nationwide budget cuts are leaving students without teachers, supplies, or a full-time education. These are common features one will see as they travel through the poorest of Third World countries.

7. Disappearing middle class: During the last presidential debate season, they argued that a family income of $250K was solidly middle-class. Well, Census data shows less than 15% of families make over $100K, and only 1.5% of families make over $250K. The income gap between the rich and poor has increased at a staggering pace, while many more middle-class folks join the ranks of the poor every day. Cavernous income gaps may be what Third-World nations are best known for.

8. Devalued currency: The value of the Federal Reserve Note (U.S. dollar) has declined 96% since the inception of the Federal Reserve in 1913. The value of the dollar is based on its supply in circulation and, to a lesser extent, the demand for those dollars. For the last three years, the money supply has spiked literally off the charts. It can be argued that the dollar has become America’s top export as the world’s reserve currency, and if the volatile dollar is scrapped, which the U.N. and IMF now suggest, then demand will plummet, killing the currency.

9. Controlling the media: A government-influenced media that censors information is a key component of Third World countries. In some countries it is openly owned by the State. In America, privately-owned major media is not as balanced or as diverse as it seems; the concentration of ownership has led to censorship when national and corporate interests have sometimes overlapped. The persecution of high-profile investigative journalists such as WikiLeaks is set amid a backdrop of the proposed Internet censorship of bloggers who wish to remain anonymous. The end of net neutrality creates a pay-to-play system that can lead to further corporate and government control of information and opinion. Cybersecurity initiatives are the final nail in the coffin, as the entire free flow of information can be vetted in a China-style system of “identity management.” On the street, the police state and media control have converged in the recent rise of arrests for those who videotape the police. This is a huge blow to First Amendment rights and the role of photojournalists who wish to document public police behavior.

10. Capital Controls: Many nations have enforced capital controls as their economies collapse. It most recently happened in Argentina and Venezuela as they sought to keep the remaining wealth within their borders. The SEC already has adopted policies to allow money market funds to suspend withdrawals during a financial crisis, while the recent HIRE bill (HR 2487) puts restrictions on Americans moving capital to foreign countries. Some economists suggest that the national debt has gotten so high that the government must now force investment of private capital into U.S. Treasury debt.

Key economic indicators point to a situation potentially worse than the Great Depression. The land of opportunity for so many is devolving into a system of government corruption, corporate looting, and military rule that threatens to sink the American Dream. The capital flight from America has left a dwindling middle class holding an empty bag. This style of underinvestment in the foundation of society is similar to what already has led to the exodus from the rural Midwest. Now, there are ominous signs of a silent exodus of young, intelligent professionals seeking opportunities to realize their dreams outside of America; they are becoming known as Generation Xpat. Lastly, many skilled immigrants have returned to their home countries to seek a better quality of life, which might be the scariest indicator of all.

1-15 Children In U.S. Has Illegal Immigrant Parents

Howard Fischer - About one out of every 15 children in the United States was born to a family where at least one parent is in this country illegally, according to a new report today.

And four out of five of them are “anchor babies,” the Pew Hispanic Center concluded.

The figures, which the organization calculated based on 2009 U.S. Census Bureau estimates, are the best estimates to date of the scope of the issue which has resulted in calls to amend the U.S. Constitution to deny automatic citizenship to children solely by virtue of their birth within this country.

That percentage of children of illegal immigrant parents might be increasing.

The overall figure is about 6.8 percent of all children 17 and younger have at least one illegal immigrant parent.

But the center calculated that about 340,000 of the 4.3 million babies born in the United States in 2008 were offspring of “unauthorized” immigrants. That computes out to 7.9 percent.

Researchers peg the number of illegal immigrants in the United States at something slightly in excess of 4 percent of the total population.

“But because they are relatively young and have high birth rates, their children make up a much larger share of the newborn population and the child population in this country,” the report says.
The 14th Amendment says that anyone born or naturalized in the United States are citizens of both this country and the state where they reside. Courts have interpreted that to entitle citizenship to those born in the United States regardless of whether one or both parents had no legal right to be here.

Some foes, including Sen. Russell Pearce, R-Mesa, argue those rulings are flawed.

He noted that the amendment makes its provisions conditional on the children being “subject to the jurisdiction” of this country. Pearce said courts, citing that language, concluded for years that did not entitle Native Americans to citizenship even though they were clearly born within the country’s borders.

It was only after Congress specifically altered the law regarding Indians that situation changed.

15 Economic Statistics That Just Keep Getting Worse

Economic Collapse - A little over a week ago, U.S. Treasury Secretary Timothy Geithner penned an article for the New York Times entitled “Welcome To The Recovery” in which he touted the great strides that the U.S. economy was making. But with unemployment still dangerously high and with foreclosures and personal bankruptcies continuing to set all-time records, should we really be talking about a “recovery”? The truth is that the numbers don’t lie, and statistic after statistic shows that the economic fundamentals continue to get progressively worse. The U.S. government can continue to try to pump up with economy with more debt, but the reality is that there is not going to be a legitimate “recovery” until consumer spending rebounds. Consumer spending makes up the vast majority of U.S. GDP. But without good jobs, consumers are not going to be able to spend money. Unfortunately, our jobs base continues to be erode as millions upon millions of middle class jobs are shipped over to China, India and dozens of third world nations by the global predator corporations that now dominate the world economy.

The U.S. government cannot create real wealth out of thin air. It can borrow even more money and flood the economy with even more paper currency, but the short-term “buzz” that creates does absolutely nothing to solve our long-term economic problems.

It is the private sector that actually creates wealth. But unfortunately, over the last several decades we have allowed that wealth to become highly concentrated. Now the giant global predator corporations have decided that American workers aren’t really that desirable after all. They are slowly taking away their factories and their offices and they are moving them to where people are willing to work for one-tenth the pay.

So where does that leave middle class American “consumers”?

Well, it leaves us in a world of hurt.

The following are 15 key economic statistics that just keep getting worse and which reveal the horrific economic plight in which we now find ourselves….

1 – The number of Americans who are receiving food stamps rose to a new all-time record of 40.8 million in May. The number of Americans receiving food stamps has set a new all-time record for 18 months in a row. But there is every indication that things are going to get even worse. The U.S. Department of Agriculture projects that the number of Americans on food stamps will increase to 43 million in 2011.

2 – The U.S. economy lost 131,000 more jobs during the month of July. But the truth is that the U.S. economy has been bleeding jobs for a long time. According to one analysis, the United States has lost 10.5 million jobs since 2007. Meanwhile, immigrants (both legal and illegal) continue to pour into this nation in unprecedented numbers.

3 – Americans who are out of work are finding it incredibly difficult to get back into the workforce. In the United States today, the average time needed to find a job has risen to an all-time record of 35.2 weeks.

4 – The U.S. government keeps trying to pump up the economy with debt, and in the process things are getting wildly out of control. According to a U.S. Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015.

5 – The interest on all of this debt is becoming increasingly oppressive. As of July 1st, the U.S. government had spent $355 billion so far in 2010 on interest payments to the holders of the national debt. The total for 2010 should be somewhere in the neighborhood of $700 billion. According to Erskine Bowles, one of the heads of Barack Obama’s national debt commission, the U.S. government will be spending $2 trillion just on interest on the national debt by 2020. Keep in mind that the entire U.S. government budget is less than $4 trillion for the entire year of 2010.

6 – If the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the annual U.S. government budget deficit would be somewhere in the neighborhood of $4 trillion to $5 trillion.

7 – Social Security will pay out more in benefits in 2010 than it receives in payroll taxes. This was not supposed to happen until at least 2015. In the years ahead, these new “Social Security deficits” are projected to be absolutely catastrophic.

8 – There are simply far too many retirees and not nearly enough workers to support them. Back in 1950 each retiree’s Social Security benefit was paid for by 16 workers. Today, each retiree’s Social Security benefit is paid for by approximately 3.3 workers. By 2025 it is projected that there will be approximately two workers for each retiree.

9 – Wealth continues to become highly concentrated at the top. Since 1973, the average CEO’s salary has increased from 26 times the median income to over 300 times the median income.

10 – According to a poll taken in 2009, 61 percent of Americans ”always or usually” live paycheck to paycheck. That was up significantly from 49 percent in 2008 and 43 percent in 2007.

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11 – The Mortgage Bankers Association recently announced that more than 10% of all U.S. homeowners with a mortgage had missed at least one mortgage payment during the January to March time period. That was a new all-time record and represented an increase from 9.1 percent a year ago.

12 – A recent survey of last year’s college graduates found that 80 percent moved right back home with their parents after graduation. That was up substantially from 63 percent in 2006.

13 – During the first quarter of 2010, the total number of loans that are at least three months past due in the United States increased for the 16th consecutive quarter.

14 – The total number of U.S. bank failures passed the 100 mark in July of this year. In 2009, the total number of U.S. bank failures did not pass the century barrier until October.

15 – The U.S. dollar continues to rapidly decline in value. An item that cost $20.00 in 1970 would cost you $112.35 today. An item that cost $20.00 in 1913 would cost you $440.33 today.

Any rational observer (and clearly U.S. Treasury Secretary Timothy Geithner does not qualify) can see that the foundations of the U.S. economy are coming apart. The rapidly accumulating mountain of debt that has fueled our “prosperity” is impossible to repay and is going to progressively choke the life out of our economic system. The good jobs that we have allowed to be shipped out of our country are never coming back. Every single day, more wealth flows out of this country than flows into it.

Anyone who claims that things are getting “better” is either ignorant, completely deluded or is purposely lying.

The U.S. economy is not getting “better”.

The U.S. economy is dying.

You should adjust your plans accordingly.

Economist Herald A Great New Depression

Steve Watson - The world is currently experiencing the modern day equivalent of the Great Depression, according to a prominent economist who has added his voice to scores of others now forecasting ongoing economic doom on a scale not seen since the 1930s.

Robin Griffiths, a technical strategist at Cazenove Capital, told CNBC Monday that he sees the stock market bottoming out in October as the world has entered significant financial depression.

"Equities are for losers and bond markets for winners. Equities are simply for people who like losing money," Griffiths said.

"A double-dip is inevitable and imminent, as Keynesian stimulus measures have never worked anywhere. We are in the equivalent of a Great Depression following 3 years of credit crisis," he added.

Griffiths also says he has charted a 20-year secular downturn in the West, which we are currently halfway through.

Griffiths’ comments echo those of other notable economists and experts who have concluded that zero growth, mass unemployment, and devastating monetary tightening spells depression on a 1932 level.

With real measures of unemployment having been at around 20% and rising for some time, other analysts have pointed out that the numbers are in the same ballpark as the Great Depression.

The number of Americans relying on food stamps is at a record level of over 40.8 million, that is one out of every eight, with the figure projected to rise to 43.3 million next year. At the height of the Great Depression, the rate was just one out of thirty-five Americans.

Furthermore, the M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the all the stimulus activity.

July’s dismal jobs report and forecasts of even weaker job growth ahead, along with signs of food inflation, also signals an era of stagflation is upon us, a phenomenon not seen during even the Great Depression.

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Other economists are beginning to pin the blame for the continuing spiral into depression at the feet of the central bankers:

"The major problem is that quantitative easing has been counter-productive." Brendan Brown, head of research at Mitsubishi UFJ Securities tells CNBC.

"The central banks have stopped prices from falling. When prices fall, people buy but by shoring up asset prices the central bankers have stood in the way of recovery," he added.

"The big risk is that the Fed reacts to its own depression. The Fed could over-react and would be better off going on holiday rather than announcing yet more QE," Brown said on the eve of a Fed meeting to discuss more QE.

Real Jobs, Fake Jobs

Lew Rockwell - In many ways, the unemployment numbers are much worse than they appear. One factor has been the timing of the US census. The bureau hired some 700,000 workers to collect data, people who otherwise were having a very difficult time navigating the choppy labor markets. They went for the jobs because they were a sure thing, paid decently, and didn’t require unusual skills (anyone can knock on a door and pester people about their private lives).

That inflated the jobs number for a while. But now these jobs are at an end — a highly unusual event in government employment, which usually lasts a lifetime. Now all of these people are facing the bracing reality of looking for employment in an economy wrecked by the government.

The press has been posting tributes to these people and their jobs and wailing about their fate now that their jobs are vanishing. And that raises questions. If these jobs were so great, why should they be eliminated at all? Surely, there is a way that these people could be transitioned to some other kind of government-funded service? That way, one might reason, people would have jobs, work would get done, and everyone would be better off.

Right? Wrong. Census jobs perform no market function, and the wages of these workers are paid by the taxpayer, meaning that these jobs are actually destructive of wealth. They siphon wealth and work out of the private sector into the wasteful sector. In fact, we can go further to say that eliminating these jobs is actually a step toward economic recovery.

Given the way economic fallacy has gone viral these days, it seems necessary to explain the issue further. The point of employment is not just jobs; it is productive and economically viable jobs.

It would be possible, for example, to reduce unemployment to its bare minimum simply by a mandatory regression in technology. We could abolish the trucking industry and force all freight to be carried by car, thereby creating millions of new jobs. Or we could abolish the car and create even more jobs for people to haul freight around by hand.

In each case, the number of jobs created would vastly outnumber the number of jobs lost. But would we be richer as a result? Not in any way. It would amount to a mandatory drop in living standards for everyone. These kinds of policies violate the Hazlitt dictum that part of good economic thinking consists in looking at what is good not just for one group (the unemployed), but all groups in society, and not just for the short term but for the long term.

The point of jobs is for people to work towards providing goods and services that are valued by the marketplace. If there is no consumer-driven demand for the things people are doing, their jobs are nothing more than waste. It does nothing for society if everyone is employed building pyramids, contrary to what Keynes once claimed. It would be senseless to have a business that employs thousands to do nothing but break new cellphones and repair them again, or to dig holes and fill them. And why is that? Because there is no economically rational basis for these tasks to exist.

To be sure, a wealthy entrepreneur can create a business doing anything, even something that loses money and is even socially ridiculous. But in order to sustain that, he will have to continue to throw good money after bad for an indefinite period of time, even unto the end of time. The day that he decides to stop doing it, the jobs will go away.

Of course, no businessman in his right mind wants to do such a thing. If you are going to create and retain uneconomic jobs, there is really only one way to do it: government. The government takes money from the private sector to throw around in inefficient ways, regardless of whether the job is worth doing in the first place.

The taxing and debt creation that is necessary to fund the government jobs is extracted from the real engine of wealth creation. This is not only true of census jobs but of all public sector jobs, whether in the federal bureaucracy, the military, or the educational sector. For this reason, the public sector’s payrolls really ought to be excluded from the employment rolls.

One objection might be that some of what public jobs produce is actually necessary for long-term economic health. We need an educated society, people might say, and even the results of the census are necessary for private-sector planning. But if that is true, there is no reason why the private sector would not have the incentive to provide these services themselves.

And they do in fact. The private sector has ever more sophisticated means for educating its employees, and making up for the inferior products of public schooling. It is the same with the census results, which are used by the state to keep track of us and control us; the private sector has its own methods of assessing demographic concerns over business location and product development. Even if there were government jobs that are in fact productive in their results, they could be performed at a profit instead of by extortion.

While everyone obsesses about the plight of census workers, there is a genuine calamity taking place in the private sector, which is being attacked by government every day. This is why the latest jobs numbers show nothing like robust job growth where it matters most. We see only slight overall increases from a decade ago, with boom-time jobs almost entirely wiped out in the bust.

This is what needs attention, but not from government programs. We need an absence of government programs, plus dramatic cuts in taxes and regulations of all sorts, and across the board. We need wage reductions in some sectors so that employment can grow in other sectors. Government cannot plan real job growth. It can only get out of the way and let it happen.

Jobless Americans: The Real Unemployment Rate 16.5% To 22%

Pallavi Gogoi - Raghavan Mayur, president at TechnoMetrica Market Intelligence, follows unemployment data closely. So, when his survey for May revealed that 28% of the 1,000-odd households surveyed reported that at least one member was looking for a full-time job, he was flummoxed.

"Our numbers are always very accurate, so I was surprised at the discrepancy with the government's numbers," says Mayur, whose firm owns the TIPP polling unit, a polling partner for Investors' Business Daily and Christian Science Monitor. After all, the headline number shows the U.S. unemployment rate today is 9.5%, with a total of 14.6 million jobless people.

However, Mayur's polls continued to find much worse figures. The June poll turned up 27.8% of households with at least one member who's unemployed and looking for a job, while the latest poll conducted in the second week of July showed 28.6% in that situation. That translates to an unemployment rate of over 22%, says Mayur, who has started questioning the accuracy of the Labor Department's jobless numbers.

Even Austan Goolsbee Has Been Skeptical

Mayur isn't alone in harboring such doubts, nor is he the first to wonder about inaccuracies. For years, many economists have pointed to evidence that the government data undercounts the unemployed. Economist Helen Ginsburg, co-founder of advocacy group National Jobs For All Coalition, and John Williams of the newsletter Shadow Government Statistics have been questioning these numbers for years.

In fact, Austan Goolsbee, who is now part of the White House Council of Economic Advisers, wrote in a 2003 New York Times piece titled "The Unemployment Myth," that the government had "cooked the books" by not correctly counting all the people it should, thereby keeping the unemployment rate artificially low. At the time, Goolsbee was a professor at the University of Chicago. When asked whether Goolsbee still believes the government undercounts unemployment, a White House spokeswoman said Goolsbee wasn't available to comment.

Such undercounting of unemployment can be an enormously dangerous exercise today. It could lead to some lawmakers underestimate the gravity of the labor market's problems and base their policymaking on a far-less-grim picture than actually exists. Economically, and socially, that would make a bad situation much worse for America.

"The implications of such undercounting is that policymakers aren't going to be thinking as big as they should be," says Ginsburg, also a professor emeritus of economics at Brooklyn College. "It also means that [consumer] demand is not going to be there, because the income from people who are employed isn't going to be there."

Indeed, it will add additional stress to an already strained economy. Businesses that might start ramping up after seeing the jobless number drop could set themselves up for disappointment when customers don't appear or orders don't flow in.

College Grads Serving Fries

Plus, having a job today is quite different from what it was just a few years ago: Many Americans have had their hours cut and are working for less pay. A Pew Research survey found more than half of all adults in the labor force had either lost a job or suffered a reduction in income because of the recession.

Ginsburg says the biggest source of undercounting comes from people who can't find a full-time job that they're qualified to do, for instance recent college graduates who take part-time jobs at fast-food joints or retail stores. Today, the Labor Department estimates that 8.6 million people are in this category.

The federal government counts such people as employed. However, polls show that these folks actually consider themselves "unemployed" and "looking for a job," and probably accounted for a large chunk of TechnoMetrica's respondents.

Jobless Workers Who Disappear

Another major source of undercounting is the unemployed who've given up looking for jobs. The Bureau of Labor Statistics headline number counts as unemployed only people who have actively looked for a job in the previous four weeks. About 2.6 million people had pursued jobs in the past 12 months but, discouraged by the lack of opportunity, had stopped looking altogether.

"Isn't it interesting that if you stopped looking for a job, you evaporate as a jobless person and are just not counted," says Gerald Celente, director of Trends Research Institute in Kingston, N.Y. Celente believes this kind of undercounting has suited the government politically. "It's what government does: Downplay disasters and amplify success."

According to the Pew Research Center, a large number of people are out of jobs for a longer period during this economic downturn. The typical unemployed worker today has been out of work for nearly six months. That's almost double the previous post-World War II peak for this measure, which was 12.3 weeks in 1982-83.

Indeed, if all of the truly unemployed were counted, the rate would be significantly higher. The BLS, in a data point titled "U-6," says it counted the total unemployment rate in June at 16.5%.

Misreading Americans' Anxiety

However, John Williams, founder of Shadow Government Statistics, says when accounting for the long-term unemployed, the jobless rate runs up to as much as 22% currently. Williams's newsletter, which analyzes flaws in government economic data, points out that such a rate isn't that far from the 25% it hit during the Great Depression.

Both Celente and Ginsburg believe lawmakers' not-dire-enough view of unemployment is one reason why they didn't extend federal unemployment benefits. Of course, party politics is another deterrent. Ginsburg says the Administration's decision to tackle the health care reform over unemployment reflects its lack of priority.

By taking his eye off one of the most fundamental issues affecting the country, President Obama has seen his popularity sink. The most recent Public Policy Polling survey says 45% of voters approve of the job he's doing, while 52% disapprove -- the first time Obama's disapproval ratings have exceeded 50% in this survey.

It's obvious that Americans view unemployment more urgently than either lawmakers or the president. And if pollsters like Mayur or economists like Ginsburg and Williams are right, it will take longer to fix this hole because it's already bigger than Washington thinks.

Obama And FDR: Failed Economic Policies

Walter Williams - Let's think about President Obama's failed economic stimulus program. Before getting to the nitty-gritty of why stimulus packages fail, let's look at the failed stimulus program of Obama's hero, Franklin Delano Roosevelt. FDR's Treasury Secretary, Henry Morgenthau, wrote in his diary: "We have tried spending money. We are spending more than we have ever spent before and it does not work. … We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started … and an enormous debt to boot!"

Morgenthau was being a bit gracious. The unemployment figures for FDR's first eight years were: 18 percent in 1935; 14 percent in 1936; by 1938, unemployment was back to 20 percent. The stock market fell nearly 50 percent between August 1937 and March 1938. Columnist Walter Lippmann wrote, "With almost no important exception every measure he (Roosevelt) has been interested in for the past five months has been to reduce or discourage the production of wealth." The last year of the Herbert Hoover administration, the top marginal income tax rate was raised from 24 to 63 percent. During the Roosevelt administration, the top rate was raised at first to 79 percent and then later to 90 percent. Hillsdale College economic historian Professor Burton Folsom notes that in 1941, Roosevelt even proposed a whopping 99.5 percent marginal rate on all incomes over $100,000. Much more of the Hoover/FDR fiasco can be found in "Great Myths of the Great Depression" (http://fee.org/articles/great-myths-of-the-great-depression/).

The Great Depression did not end until after WWII. Why it lasted so long went unanswered until Harold L. Cole, professor of economics at the University of Pennsylvania, and Lee E. Ohanian, professor of economics at UCLA, published their research project "How Government Prolonged the Depression" in the Journal of Political Economy (August 2004). Professor Cole explained, "The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes. Ironically, our work shows that the recovery would have been very rapid had the government not intervened." Professors Cole and Ohanian argue that FDR's economic policies added at least seven years to the depression.

Where do the trillion-plus dollars come from that Congress and Obama are spending in an effort to stimulate the economy? How about Santa Claus, or maybe the Tooth Fairy? If you said, "Come on, Williams, you're being silly! The only way government can spend a dollar is to tax or borrow it," go to the head of the class. In the case of a tax, one should ask what would that taxpayer have done with the dollar had it not been taxed away. He would have spent it on something that would have created a job for someone. If the government hadn't borrowed the dollar, it might have been invested in some project that would have created a job. When government taxes, borrows and spends, it shifts unemployment from one sector to another. Of course, the sector that benefits tends to be a political favorite of the shifter.

Between 1787 and 1930, our nation has seen both mild and severe economic downturns, sometimes called panics, that have ranged from one to seven years. During that interval, no one considered it to be the business of the federal government to try to get the economy out of a depression because there was no constitutional authority to do so. It took Hoover, FDR and a frightened and derelict U.S. Supreme Court to turn what might have been a three- or four-year sharp downturn into a 15-year meltdown.

Middle Class Families Around The World Face A Triple Whammy

Edmund Conway - You don't usually expect radical neo-Marxism from the International Monetary Fund – the last great bastion of capitalism, spreading the gospel about the free market to the furthest reaches of the world. And yet, hidden away in an obscure IMF report a few years back is a short sentence that explains precisely the problems that Britain, and the rest of the Western world, have been sleepwalking towards for years.

The claim made by the IMF's Financial Stability Report in 2005, in a seemingly throwaway remark, was that households had become the financial system's "shock absorber of last resort". In other words, whereas in previous eras, much of the pain of recession and financial crisis was borne by businesses or governments, with families afforded some degree of protection by the pensions system or welfare state, it was now households who were far more likely to face the music.

At the time, the idea received little attention. But it has truly radical implications for economics and politics around the world. This is not merely about the financial crisis, but something more deep-seated: the way in which wealth is distributed around society. It is about the middle classes, and why they have become the biggest victims of all.

The problem is that families face a threefold threat to their prosperity. The first issue – the one that the IMF was originally focusing on – is pensions. Not so long ago, households were lucky enough to receive gold-plated pensions that would guarantee a certain pay-out upon retirement. Most companies have closed their schemes after realising they are simply unaffordable. The public sector at last looks like following suit, if the BBC's decision this week to reduce the generosity of its pension plan is anything to go by.

This is, in the IMF's words, a "quantum leap". Suddenly households have gone from being able to rely on a constant stream of legally protected income from their employer to having to manage their own investments (as they technically do under the new breed of pensions).

This would be fine if one could be assured that most people would have either the time or the inclination to understand these new responsibilities. But every piece of evidence – academic and anecdotal – suggests that they do not. The result is that the majority of households are heading blindly towards a future of relative poverty.

The second issue is that the welfare state has become unaffordable, and yet many of Britain's poorest families have become overly reliant on it. Here, too, there is to be a reckoning. Whereas Gordon Brown used his first Budget to save money by grabbing an annual £6 billion from pension funds (and the middle class), George Osborne used last month's emergency Budget for a similar-sized grab on the welfare class. Re-indexing tax credits against a lower measure of inflation will cost Britain's poorest families billions by the end of this parliament.

And it is not merely that the middle class and the poorest have found themselves squeezed so hard: it is that so much of the extra cash generated during the boom years (and even after them) has been actively funnelled towards the most wealthy. The median wage in the US, adjusted for inflation, has been stagnant for pretty much three decades. But the figures at the high end of the scale have soared; whereas in 1970 the average US chief executive made $25 for every dollar of their typical employee's salary, today the figure is more like $90.

Much of this disparity is down to globalisation. When the world is changing fast, those qualified to deal with the technology du jour (be it the steam engine or the internet) will earn more than their peers. But the fact remains that not only is inequality at the highest level since the Thirties, the pension and welfare systems set up then for the express purpose of levelling this divide are in an exponential decline, threatening to widen the gulf further.

Moreover, there is good reason to suspect, as Raghuram Rajan points out in his new book, Fault Lines, that policy-makers have only been able to persuade people to live with this manifestly unfair situation by pumping up ever bigger booms in the property and stock markets to give them the impression that they are actually making money. Now that the bubble has burst and debt is harder to procure, that illusion has evaporated.

All this before one even takes into account the third problem for households – that they are having to bear the costs of the clean-up for the financial crisis. The austerity budgets being imposed across Europe will mean that families are taxed more and receive less in the way of welfare and public services. Police numbers will be cut; university fees are likely to rise further. In other words, the cost of trying to live a stable, contented middle-class life will balloon.

So I have one simple question: when do the politicians intend to let the public know about the fate that awaits them? The longer they put it off, the nastier the reaction, the bigger the strikes and the greater the chance that governments will fall. Don't say you weren't warned. Repairpal is a terrific idea that is likely to become even more valuable as it grows in popularity. The concept is simple a one stop website.

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Obamanomicis: China To Overtake U.S. In Manufacturing

The good news just keeps rolling in, doesn’t it? From the Financial Times:

The US remained the world’s biggest manufacturing nation by output last year, but is poised to relinquish this slot in 2011 to China – thus ending a 110-year run as the number one country in factory production.

This is an outright disaster and proof that our economic system is fundamentally flawed. We have a massive government, special privileges for some companies which work out as restraint of trade for small and start-up firms, a burdensome tax and regulatory climate which makes it easier for corporate pinheads to move factories to China rather than keeping them here. And it all adds up to a system which makes life hard for the working poor and middle class.

The very rich and the very poor get on ok with this – only in America are the non-working poor overweight, driving cars and watching cable TV. Meanwhile, the super rich are still out there buying luxury goods at a fast pace while regular retailers face bankruptcy

Revolution, my friends – it is the only way. We must overturn this bastard combine of corporatism and socialism and build an economy fit for regular men and women to work in. November will likely prove a good first step in this, but keep in mind that it is just a first step – if we are not relentless post-November, then our own GOP will slip back in to the bad, old ways.

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Tax Hikes And 2011 Economic Collapse

Arthur Laffer - People can change the volume, the location and the composition of their income, and they can do so in response to changes in government policies.

It shouldn't surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates. People and businesses change the location of income based on incentives.

John Fund of WSJ's Political Diary breaks down Tuesday's most interesting primary contests. Also, WSJ Columnist Mary Anastasia O'Grady translates the latest economic signals from Washington.

Likewise, who is gobsmacked when they are told that the two wealthiest Americans—Bill Gates and Warren Buffett—hold the bulk of their wealth in the nontaxed form of unrealized capital gains? The composition of wealth also responds to incentives. And it's also simple enough for most people to understand that if the government taxes people who work and pays people not to work, fewer people will work. Incentives matter.

People can also change the timing of when they earn and receive their income in response to government policies. According to a 2004 U.S. Treasury report, "high income taxpayers accelerated the receipt of wages and year-end bonuses from 1993 to 1992—over $15 billion—in order to avoid the effects of the anticipated increase in the top rate from 31% to 39.6%. At the end of 1993, taxpayers shifted wages and bonuses yet again to avoid the increase in Medicare taxes that went into effect beginning 1994."

Just remember what happened to auto sales when the cash for clunkers program ended. Or how about new housing sales when the $8,000 tax credit ended? It isn't rocket surgery, as the Ivy League professor said.

On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. President George W. Bush's tax cuts expire on that date, meaning that the highest federal personal income tax rate will go 39.6% from 35%, the highest federal dividend tax rate pops up to 39.6% from 15%, the capital gains tax rate to 20% from 15%, and the estate tax rate to 55% from zero. Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts.

Tax rates have been and will be raised on income earned from off-shore investments. Payroll taxes are already scheduled to rise in 2013 and the Alternative Minimum Tax (AMT) will be digging deeper and deeper into middle-income taxpayers. And there's always the celebrated tax increase on Cadillac health care plans. State and local tax rates are also going up in 2011 as they did in 2010. Tax rate increases next year are everywhere.
[laffer]

Now, if people know tax rates will be higher next year than they are this year, what will those people do this year? They will shift production and income out of next year into this year to the extent possible. As a result, income this year has already been inflated above where it otherwise should be and next year, 2011, income will be lower than it otherwise should be.

Also, the prospect of rising prices, higher interest rates and more regulations next year will further entice demand and supply to be shifted from 2011 into 2010. In my view, this shift of income and demand is a major reason that the economy in 2010 has appeared as strong as it has. When we pass the tax boundary of Jan. 1, 2011, my best guess is that the train goes off the tracks and we get our worst nightmare of a severe "double dip" recession.

In 1981, Ronald Reagan—with bipartisan support—began the first phase in a series of tax cuts passed under the Economic Recovery Tax Act (ERTA), whereby the bulk of the tax cuts didn't take effect until Jan. 1, 1983. Reagan's delayed tax cuts were the mirror image of President Barack Obama's delayed tax rate increases. For 1981 and 1982 people deferred so much economic activity that real GDP was basically flat (i.e., no growth), and the unemployment rate rose to well over 10%.

But at the tax boundary of Jan. 1, 1983 the economy took off like a rocket, with average real growth reaching 7.5% in 1983 and 5.5% in 1984. It has always amazed me how tax cuts don't work until they take effect. Mr. Obama's experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011.

Consider corporate profits as a share of GDP. Today, corporate profits as a share of GDP are way too high given the state of the U.S. economy. These high profits reflect the shift in income into 2010 from 2011. These profits will tumble in 2011, preceded most likely by the stock market.

In 2010, without any prepayment penalties, people can cash in their Individual Retirement Accounts (IRAs), Keough deferred income accounts and 401(k) deferred income accounts. After paying their taxes, these deferred income accounts can be rolled into Roth IRAs that provide after-tax income to their owners into the future. Given what's going to happen to tax rates, this conversion seems like a no-brainer.

The result will be a crash in tax receipts once the surge is past. If you thought deficits and unemployment have been bad lately, you ain't seen nothing yet.

"Key Indicators of a Great New Depression

Neeraj Chaudhary - With the mainstream media focusing on the country's leveling unemployment rate, improving retail sales, and nascent housing recovery, one might think that the US government has successfully navigated the economy through recession and growth has returned. But I will argue that a look under the proverbial hood reveals a very different picture. I believe the data shows that the US economy is badly damaged, and a modern-day depression has begun. In fact, just as World War I was originally called The Great War (and was retroactively renamed after World War II), Peter Schiff has said that one day the world will refer to the 1929-41 era as Great Depression I, and the current period as Great Depression II.

For starters, look at unemployment. During Great Depression I, unemployment broke 25%. If government statistics are taken at face value, the current unemployment rate is 9.9%, but a closer look reveals that the broadest measure of unemployment is currently at 20% - and rising. So, today's numbers are in the same ballpark as the '30s even though the federal government is using unprecedented measures to keep the economy afloat. Remember, in Great Depression I, FDR never ran a deficit nearly as large as President Obama's. Moreover, the Federal Reserve of the 1930s still had a gold standard with which to contend, while today's Fed has increased the monetary base with impunity. Yet even with all that intervention, unemployment figures still indicate that we have entered depression territory.

What is demoralizing to an unemployed person is not simply being let go, it is being unable to find a new job for an extended period of time. And this is where Great Depression II really rears its ugly head. According to the US federal government's own data, the median duration of unemployment is now over five months - and rising. This is the highest it's been since the BLS started compiling this statistic in 1965. As workers start to go this long without jobs, they eat into their savings. Eventually - and especially in a country with a savings rate as low as ours and debt as high as ours - they run out of cushion and hit the street. Formerly middle-class people have to make decisions never thought possible: do I eat in a shelter or go hungry in my home?

It's no surprise, then, that about 40 million people - or one out of every eight Americans - are receiving food stamps in Great Depression II. During the height of Great Depression I, the rate was just one out of thirty-five Americans. Even with the stimulus programs, Great Depression II is actually worse on this measure than Great Depression I - and the USDA estimates that the program could grow by another 50%. Soon, out of ten people you know, one may depend on federal assistance for daily survival.

Despite tax credits that have created a rush of purchases this spring, housing is in just as bad shape. During Great Depression I, home prices dropped some 15% from their pre-depression peak (achieved in 1925). In Great Depression II, housing is down at least 30% from the pre-depression peak (achieved in 2005), with some markets down more than 50%.

So, many of the people expected to keep making mortgage payments as they eat tuna fish to stay alive will be paying double their home's resale value. This is a tremendous incentive to walk away, with disastrous consequences for the country's social fabric in these trying times. Empty homes breed crime and vandalism, encouraging more to flee in a negative feedback loop. Moreover, the many 'walkaways' may create a class of Americans with ruined credit - right when many employers have started checking credit scores before hiring.

Even more worrisome, the present drop in home prices is against a backdrop of price inflation. In Great Depression I, our grandparents may have lost value in their home, but everyday goods (milk, diapers, automobiles, etc.) got cheaper at the same time. That made their savings 'cushion' deeper when they needed it most. Today, as home equity (now our main store of savings) declines, prices for consumer goods are rising. It's a tight squeeze indeed.

From jobs to food to the roofs over our heads, the current period of economic turmoil is at least as bad as the First Great Depression, whether or not the financial media wishes to acknowledge it. The main difference is that unlike in the '30s, the US dollar is now the world's fiat reserve currency, so we are able to push our problems overseas for awhile. The plight of the rural Chinese is really our plight - we are living lavishly on the wealth they create. Were they to quit this dastardly arrangement, the full effects of Great Depression II would be felt in America.

By contrast, in Great Depression I, the US was on the gold standard like everyone else, which forced us to live within our means. This, in turn, made it easier to recognize that the economy was in decline and changes had to be made.

Unfortunately, because of the responses of the Administration and the Federal Reserve, which I believe to be deeply misguided, I remain concerned that Great Depression II could develop into something far more devastating than its predecessor, something that other countries in the world have experienced but was thought impossible in the United States: a hyperinflationary depression. As bad as the current downturn has been, inflation would make it immeasurably worse. It would require an honest accounting of the problems we face today to avert the disaster we see coming tomorrow.

Food Stamp Tally Almost 40 Million, Sets a New Record

(Reuters) - Nearly 40 million Americans received food stamps -- the latest in an ever-higher string of record enrollment that dates from December 2008 and the U.S. recession, according to a government update.

Food stamps are the primary federal anti-hunger program, helping poor people buy food. Enrollment is highest during times of economic distress. The jobless rate was 9.9 percent, the government said on Friday.

The Agriculture Department said 39.68 million people, or 1 in 8 Americans, were enrolled for food stamps during February, an increase of 260,000 from January. USDA updated its figures on Wednesday.

"This is the highest share of the U.S. population on SNAP/food stamps," said the anti-hunger group Food Research and Action Center, using the new name for food stamps, Supplemental Nutrition Assistance Program (SNAP). "Research suggests that one in three eligible people are not receiving ... benefits."

Enrollment has set a record each month since reaching 31.78 million in December 2008. USDA estimates enrollment will average 40.5 million people this fiscal year, which ends Sept 30, at a cost of up to $59 billion. For fiscal 2011, average enrollment is forecast for 43.3 million people.

Real Unemployment Rate Jumps To 17.1%

Business Insider - Nonfarm payroll employment rose by 290,000 in April, the unemployment rate
edged up to 9.9 percent, and the labor force increased sharply, the U.S.
Bureau of Labor Statistics reported today. Job gains occurred in manufactur-
ing, professional and business services, health care, and leisure and hospi-
tality. Federal government employment also rose, reflecting continued hiring
of temporary workers for Census 2010.

Household Survey Data

In April, the number of unemployed persons was 15.3 million, and the unem-
ployment rate edged up to 9.9 percent. The rate had been 9.7 percent for the
first 3 months of this year.

Among the major worker groups, the unemployment rate for whites (9.0 percent)
edged up in April, while the rates for adult men (10.1 percent), adult women
(8.2 percent), teenagers (25.4 percent), blacks (16.5 percent), and Hispanics
(12.5 percent) showed little or no change. The jobless rate for Asians was
6.8 percent, not seasonally adjusted.

The number of long-term unemployed (those jobless for 27 weeks and over) con-
tinued to trend up over the month, reaching 6.7 million. In April, 45.9 percent
of unemployed persons had been jobless for 27 weeks or more.

Among the unemployed, the number of reentrants to the labor force rose by
195,000 over the month.

In April, the civilian labor force participation rate increased by 0.3 percent-
age point to 65.2 percent, as the size of the labor force rose by 805,000. Since
December, the participation rate has increased by 0.6 percentage point. The em-
ployment-population ratio rose to 58.8 percent over the month and has increased
by 0.6 percentage point since December.

The number of persons employed part time for economic reasons (sometimes refer-
red to as involuntary part-time workers) was about unchanged at 9.2 million in
April. These individuals were working part time because their hours had been cut
back or because they were unable to find a full-time job.

About 2.4 million persons were marginally attached to the labor force in April,
compared with 2.1 million a year earlier. (The data are not seasonally adjusted.)
These individuals were not in the labor force, wanted and were available for work,
and had looked for a job sometime in the prior 12 months. They were not counted
as unemployed because they had not searched for work in the 4 weeks preceding
the survey.

Among the marginally attached, there were 1.2 million discouraged workers in
April, up by 457,000 from a year earlier. (The data are not seasonally adjusted.)
Discouraged workers are persons not currently looking for work because they be-
lieve no jobs are available for them. The remaining 1.2 million persons marginal-
ly attached to the labor force had not searched for work in the 4 weeks preceding
the survey for reasons such as school attendance or family responsibilities. (See
table A-16.)

In April, nonfarm payroll employment rose by 290,000. Sizable employment gains oc-
curred in manufacturing, professional and business services, health care, and in
leisure and hospitality. Federal government employment increased due to the hiring
of temporary workers for Census 2010. Since December, nonfarm payroll employment
has expanded by 573,000, with 483,000 jobs added in the private sector. The vast
majority of job growth occurred during the last 2 months.

Manufacturing added 44,000 jobs in April. Since December, factory employment has
risen by 101,000. Over the month, gains occurred in several durable goods indus-
tries, including fabricated metals (9,000) and machinery (7,000). Employment also
grew in nondurable goods manufacturing (14,000).

Mining added 7,000 jobs in April, with most of the increase in support activities
for mining. Since last October, mining has added 39,000 jobs.

In April, construction employment edged up (14,000), following an increase of 26,000
in March. Over the month, nonresidential building and heavy construction added 9,000
jobs each.

Employment in professional and business services rose by 80,000 in April. Temporary
help services continued to add jobs (26,000); employment in this industry has in-
creased by 330,000 since September 2009. Employment also rose over the month in ser-
vices to buildings and dwellings (23,000) and in computer systems design (7,000).

In April, health care employment grew by 20,000, including a gain of 6,000 in hospi-
tals. Over the past year, health care employment has increased by 244,000.

Employment rose by 45,000 in leisure and hospitality over the month. Much of this
increase occurred in accommodation and food services, which added 29,000 jobs. Food
services employment has risen by 84,000 over the past 4 months, while accommodation
has added 18,000 jobs over the past 3 months.

Federal government employment was up in April, reflecting the hiring of 66,000 tem-
porary workers for the decennial census.

Over the month, employment changed little in wholesale trade, retail trade, informa-
tion, and financial activities.

Employment in transportation and warehousing fell by 20,000 in April, reflecting a
large decline in courier and messenger services.

In April, the average workweek for all employees on private nonfarm payrolls increased
by 0.1 hour to 34.1 hours. The manufacturing workweek for all employees increased by
0.2 hour for the second straight month to 40.1 hours, and factory overtime was up by
0.1 hour over the month. The average workweek for production and nonsupervisory em-
ployees on private nonfarm payrolls increased by 0.1 hour to 33.4 hours in April.


Average hourly earnings of all employees in the private nonfarm sector increased by
1 cent to $22.47 in April. Over the past 12 months, average hourly earnings have in-
creased by 1.6 percent. In April, average hourly earnings of private-sector production
and nonsupervisory employees increased by 5 cents to $18.96.

The change in total nonfarm payroll employment for February was revised from -14,000
to +39,000, and the change for March was revised from 162,000 to 230,000.

Real Income Falls 3.2% During Obama's Term

Real personal income for Americans - excluding government payouts such as Social Security - has fallen by 3.2 percent since President Obama took office in January 2009, according to the Commerce Department's Bureau of Economic Analysis.

For comparison, real personal income during the first 15 months in office for President George W. Bush, who inherited a milder recession from his predecessor, dropped 0.4 percent. Income excluding government payouts increased 12.7 percent during Mr. Bush's eight years in office.

"This is hardly surprising," said Douglas Holtz-Eakin, an economist and former director of the nonpartisan Congressional Budget Office. "Under President Obama, only federal spending is going up; jobs, business startups, and incomes are all down. It is proof that the government can't spend its way to prosperity."

According to the bureau's statistics, per capita income dropped during 2009 in 47 states, with only modest gains in the other states, West Virginia, Maine and Maryland. But most of those increases were attributed to rising income from the government, such as Medicare and unemployment benefits.

Two of the most populous states in the country reported dramatic declines: Per capita income in California dropped 3.5 percent to $42,325; in New York, the drop was 3.8 percent to $46,957.

"The evidence from New York and California reinforces a basic lesson: Where government gets too large, prosperity suffers. Let's hope that the Congress learns this lesson before it is too late for the country as a whole," said Mr. Holtz-Eakin, who also served as chief economic policy adviser to Sen. John McCain's 2008 presidential campaign.

On the campaign trail, Mr. Obama often derided Mr. Bush for what he said were dramatically falling incomes for workers.

"American families, since George Bush has been in office, have seen average family incomes go down $2,000," Mr. Obama said in a September 2008 speech on the economy in Green Bay, Wis.

The bureau, which doesn't compile statistics on "family" income, reported that per capita income rose during Mr. Bush's two terms, from $29,159 to $32,632 (using 2005 dollar values as a base). During Mr. Obama's 15 months in office, per capita income has dropped nearly 1 percent to $32,343.

Economists agree that Mr. Obama inherited a severe recession, although some dispute that it is the "worst since the Great Depression," as Mr. Obama often asserts. Still, the dropping numbers show that the $862 billion stimulus package has not turned the tide on dropping incomes.
"All in all I think the [bureau's] data are just another confirmation of what we all know - the recession has been just brutal, and while we may in the past couple of months have stopped the downward slide in jobs and incomes, we'll be digging out of a big hole for a long time," said Josh Bivens of the Economic Policy Institute.

Carol Moylan, chief of national income and wealth division at the Bureau of Economic Analysis, said comparing real personal incomes while excluding government payments is a good barometer. "A lot of people like that number," she said.

The White House did not respond to requests for comments on the numbers.

Personal income with government "transfers" - which include such federal money as Social Security, unemployment insurance, Medicare and food stamps - has grown during Mr. Obama's time in office, up 1.2 percent from January 2009 to February 2010. During that period, government unemployment insurance benefits rose from $88 billion to $143 billion.

Despite a near doubling in unemployment payouts, Mr. Obama in February announced a multitrillion-dollar spending plan that boosted the federal deficit to a record-breaking $1.56 trillion.

"While the market income of Americans has fallen since early 2008, government assistance has offset this somewhat through greater transfer spending such as unemployment benefits and new tax credits such as the 'making work pay credit,' albeit at the expense of higher deficits," said Gerald Prante, a senior economist at the Tax Foundation organization.

Mr. Obama, who just finished pushing a $1 trillion health care reform bill through Congress, is falling behind on his predictions. In a September speech, he said: "All in all, many middle-class families will see their incomes go up by about $3,000 because of the Recovery Act."

Other numbers show dramatic differences between the state of the economy in the opening months of Mr. Bush's first term versus that of Mr. Obama. While disposal income during Mr. Obama's term has risen $2.5 billion, extra cash for Americans rose $113 billion over Mr. Bush's first 15 months in office.

Meanwhile, the findings of a new survey of leading economists by the Associated Press found widespread pessimism over a quick recovery.

The finding included ominous news:

c The unemployment rate will stay high for the next two years and still be at 8.4 percent by the end of 2011.

c Home prices will remain almost flat for the next two years, even after dropping an average 32 percent nationwide since peaking in 2006.

c The economy will grow about 3 percent this year, less than usual during the early phase of a recovery, but few jobs will be added.

Government workers thrive during economic recession

The recession and the ongoing jobless recovery devastated much of the private-sector work force last year, sending unemployment soaring, but government workers emerged essentially unscathed, according to data released Wednesday by the Labor Department.

Meanwhile, the compensation for state and local government employees continued to easily outdistance the wages and benefits for workers in private business, a separate Labor Department report showed.

Private-industry employers spent an average of $27.42 per hour worked for total employee compensation in December, while total compensation costs for state and local government workers averaged $39.60 per hour.

The average government wage and salary per hour of $26.11 was 35 percent higher than the average wage and salary of $19.41 per hour in the private sector. But the percentage difference in benefits was much higher. Benefits for state and local workers averaged $13.49 per hour, nearly 70 percent higher than the $8 per hour in benefits paid by private businesses.

Paul Booth, executive assistant to the president at the American Federation of State, County and Municipal Employees (AFSCME), attributed the pay difference to a changing government work force that has increased its proportion of higher-skilled workers during the past 15 to 20 years.

"In government payrolls, you no longer have low-wage occupations, such as janitors, whose jobs have been contracted out to the private sector," he said. This trend has effectively increased the average wage of those higher-skilled workers who remain, said Mr. Booth, whose union represents 1.6 million workers.

Compensation for government workers "is a gigantic problem" that will only get worse in future years, said Chris Edwards, director of tax policy studies at the Cato Institute, which advocates less government and lower taxes.

"The defined-benefit pension plans for state and local workers and their post-retirement health care costs do not include the extent to which those benefits are underfunded or overpromised," Mr. Edwards said.

Benefit costs eventually will soar, and taxpayers will be required to pay the difference between available resources and the overpromised benefits as government workers of the baby boom generation, who start to turn 65 next year, begin to retire en masse. Government workers also have the rare privilege of being able to retire at age 55.

With state budgets under extreme stress, the pension problem is worsening because workers are accruing future benefits that are not reflected in current data, Mr. Edwards said.

Meanwhile, private-sector workers who are unemployed or working part time are not paying as much in taxes.

Fifteen states and the District of Columbia reported double-digit unemployment during January, the Labor Department said Wednesday, as the private sector continued to shed jobs.

The recession reportedly ended in July, but the private work force suffered its biggest percentage decline in 2009 for any year since the end of World War II.

After shedding 3.8 million net jobs during 2008, private employers slashed an additional 4.7 million last year. During the same two-year period, the public sector, including the federal government, gained more than 100,000 jobs. The combined work forces of state and local governments added 35,000 jobs during the 2008-09 period.

While private-sector jobs declined in every state except North Dakota over the previous 12 months, public-sector employment increased in 23 states, the Labor Department report showed. Even in North Dakota, as the private work force gained 300 jobs over the past year, the government sector surged by 1,000 new workers.

In states where government employment declined during the previous 12 months, the drop has been relatively inconsequential, while the decline in private employment has been far more severe. In California, where the state government is still in the grips of a wrenching budget crisis, private employment has plunged 5.5 percent, nearly four times as fast as the 1.5 percent dip in government employment.

Mr. Booth of AFSCME acknowledges that total government payrolls are higher today than they were at the beginning of the recession. During the two years since the recession began, government workers took their economic medicine by accepting furloughs in lieu of layoffs, he said. Workers kept their jobs but received pay for two fewer days per month, he said.

He noted that government payrolls have been shrinking since April. State and local government work forces historically decline after a lag, he said. School district payrolls, for example, are based on property-tax revenues, which generally follow a two-year lag, he said.

Citing projections by Moody's Economy.com and Goldman Sachs, Mr. Booth said state and local government work forces could decline by as many as 900,000 workers during the next fiscal year, which begins July 1.

"Furloughs are likely to yield to RIFs," or reductions in force, he said.

Taxpayers in the private sector fortunate to have jobs were working more days and for less money to finance the vacation and holiday time of state and local workers, according to the compensation report.

For every hour worked in December, state and local government workers earned $2.99 in paid leave. Private-sector workers earned $1.86 per hour worked for paid leave, or nearly 40 percent less. Holiday pay for state and local workers was 50 percent higher per hour than it was for workers employed by private businesses.

The biggest difference in compensation was in payments for defined-benefit pension plans, in which employers (a private company or, in the case of government workers, the taxpayer) commit to paying their employees a specific benefit for life beginning at retirement.

State and local workers received an average of $2.86 for each hour worked for their defined-benefit pensions. That compares with 38 cents per hour paid for defined-benefit plans for private workers, the vast majority of whom now participate in defined-contribution pension plans.

"Many companies have eliminated their defined-benefit plans, and others have reduced the value of benefits and shifted to providing benefits through 401(k)s and other defined-contribution plans," notes the AFL-CIO Web site. "Defined-contribution plans shift the risk and responsibility to individual workers and typically reduce corporate costs."

In the cases of state and local government workers, the pension costs are principally borne by the taxpayer. The trillions of dollars of underfunded pension liabilities are augmented by increasingly expensive and underfunded health care costs in retirement before and after government workers become eligible for Medicare at age 65, Mr. Edwards of Cato said.