What does it take to get a job? My daughter is a current job seeker. It is hard to watch her. It breaks my heart.
With unemployment more than 9% and underemployment more than 10%, it is hard for her to find a job that is something that she wants to do.
There are thousands of people applying for every job and for every grant. So it takes more than being good at what you want to do to get a desired job.
Why is it so hard?
According to several financial periodicals, this is the slowest economic recovery since 1932.
Housing sales are low which affects lots of other industries like furniture and appliances etc. And “new housing sales” are only one third of what they need to be to sustain the economy. “New housing” is the key because it creates jobs through the construction supply chain and ancillary products like furniture and appliances.
Inflation for energy and food are high which sucks money out of the economy. And the combination of unemployment and underemployment are very high (close to 20%) which reduces demand for products and creates too much competition for each job.
The federal deficit has increased from $160 Billion to $1.75 Trillion in just 30 months with no improvement to the economy because people with no business experience implemented it.
The little secret is that the most important statistic is not the unemployment number. The most important statistic is the total disposable income of Americans. 70% of the economy is based on consumption … and disposable income is decreasing as wages fall and taxes increase which causes a squeeze on money available for consumption. That leaves less money for folks to buy stuff. So that squeeze eventually causes more unemployment.
The governments (federal and local) are playing a shell game. While they have us focused on income taxes, they increase all kinds of other taxes like road tolls, gasoline taxes, taxes imbedded in programs like Obamacare, sales taxes, etc.
Employment increased in the the first quarter of 2011. But 2 problems were hidden from the public as the administration wants us all to just focus on the increase in jobs.
1. half of the new jobs are for minimum wages. Employing 200,000 more people at McDonalds and Walmart does not replace the buying power lost from 200,000 unemployed manufacturing workers or 200,000 unemployed lawyers. To trade a worker who earns $50 per hour for one who earns $10 per hour is insane .. but this government is trying to sell us that the economy is getting better because more people are employed even though those replacement jobs are for lots less money.
2. jobs are not being created as fast as new workers are entering the work force. Just to maintain the unemployment percent at its current level, 200,000 net new jobs are required each month. To reduce the unemployment percent to less than 6% within the next 18 months, 400,000 net new jobs are required each month. This administration has not come close to that yet in 2 1/2 years of trying and $1.75 trillion of deficits. 5% unemployment is considered to be full employment. At 20% for unemployment and underemployment, we are very far from full employment.
Food prices are increasing from the increased costs of transportation and corn (ethanol increased the price of corn 100% in the last 6 months and corn is used to feed live stock and provide milk). The increase to GDP is from inflation … not from product sales. Increased prices are driving up the GDP, not increased product sales. So even though this administration claimed “mission accomplished” because GDP increased, … job creation is a failure. And since the true inflation is more than the 2%, the economy is actually shrinking in terms of net present value. We are still in a recession.
As the government keeps pumping money into the economy and spending lots of it for more government, that will only make things get worse. Government actions destroy the will of the people. It was like that in 1974. By 1980, Carter drove unemployment to 12% and inflation to 16% with his big government spending before anyone noticed it. It was hidden in how the numbers were calculated. This current government is doing the same thing. For the average family, inflation is close to 10% when food and gas are included.
The current actions of unions are exactly opposite of supply/demand economics. And when an entity is forced to employ from unions, that exacerbates the economic problems for the employer and for the economy. GM stock price has not increased because the bailout only temporarily held off the inevitable … unions cause companies to be uncompetitive in the world market. While the liberals and the media have us all focused on Wisconsin for political reasons, two liberal states, Massach