Danny Powell writing for Facefwd.com
I have been in the recruiting and staffing world for over 20 years. I have lived though the S&L bail out, the oil bust and the dot com bomb. The recent activity by the last half of the Bush administration, Barney Frank with the MAE/MACs and the power grab by the Obama administration have me very concerned that we are not yet near the bottom.
In the staffing industry, we normally see employment following somewhere between 6-9 months behind a recovery. Just prior to the recovery, a 3 to 6 month period, the unemployment will flatten out and remain flat until it starts to drop as the recovery takes hold. Because we see unemployment continue to creep upward, our best estimate is that we are at least 12 to 16 months before we see any recovery in jobs/employment.
The role of the Federal reserve in this whole mess is criminal. While they are portrayed as being the kind gentle savior working in the American public’s best interest, they are much closer to a parasite who has pulled too much life force from their victim and is desperately working to revive them. The Fed has toyed with our economy, recorded incredible returns on their money (actually our money), and helped fill the coffers of their cohorts, Goldman Sachs and others.
Even while the American public is suffering from record unemployment, Goldman Sachs is posting record profits enabled because the US government loaned them money that it had borrowed and we (the tax payer) will repay. The administrations said it was for the suffering public and had to be done. We now know it was for the banking industries and a slush fund to provide capital for the Obama administration’s takeover. Rahm Emanuel said, “you can’t let a good crisis go to waste”. As far as the banks go, he sure didn’t. I just wonder what the American public thinks now that they are out of work?
How many of you reading this have actually seen any of those shovel ready public projects started? Other than 18 million dollars to remake the website, “recovery.org”, I haven’t really seen an impact. (are they out of their mind? $18MM to rebuild a website?). Don’t expect to see any of the stimulus package unless you are a bank, the automotive industry, an new industry targeted for takeover or one of the Obama “fave” organizations i.e. ACORN. If you wish that your industry was getting some of that money, you might want to rethink your position. Just ask the people now not working who were laid off at car dealerships, banks and investment firms because some appointed CZAR demanded it.
Just as I have advised the people that come to me looking for work, if you are currently in need of a job you should consider taking a step down in salary to land something. This is not a great time to be holding out for a dream job.
I am not the only one to see a problem with unemployment dropping anytime soon. Here are 10 reasons given by the Wall Street Journal we are in even more trouble than the 9.5% unemployment rate indicates:
- June’s total assumed 185,000 people at work who probably were not. The government could not identify them; it made an assumption about trends. But many of the mythical jobs are in industries that have absolutely no job creation, e.g., finance. When the official numbers are adjusted over the next several months, June will look worse.
- More companies are asking employees to take unpaid leave. These people don’t count on the unemployment roll.
- No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn’t searched for work in the four weeks preceding the survey.
- The number of workers taking part-time jobs due to the slack economy, a kind of stealth underemployment, has doubled in this recession to about nine million, or 5.8% of the work force. Add those whose hours have been cut to those who cannot find a full-time job and the total unemployed rises to 16.5%, putting the number of involuntarily idle in the range of 25 million.
- The average work week for rank-and-file employees in the private sector, roughly 80% of the work force, slipped to 33 hours. That’s 48 minutes a week less than before the recession began, the lowest level since the government began tracking such data 45 years ago. Full-time workers are being downgraded to part time as businesses slash labor costs to remain above water, and factories are operating at only 65% of capacity. If Americans were still clocking those extra 48 minutes a week now, the same aggregate amount of work would get done with 3.3 million fewer employees, which means that if it were not for the shorter work week the jobless rate would be 11.7%, not 9.5% (which far exceeds the 8% rate projected by the Obama administration).
- The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
- The average worker saw no wage gains in June, with average compensation running flat at $18.53 an hour.
- The goods producing sector is losing the most jobs — 223,000 in the last report alone.
- The prospects for job creation are equally distressing. The likelihood is that when economic activity picks up, employers will first choose to increase hours for existing workers and bring part-time workers back to full time. Many unemployed workers looking for jobs once the recovery begins will discover that jobs as good as the ones they lost are almost impossible to find because many layoffs have been permanent. Instead of shrinking operations, companies have shut down whole business units or made sweeping structural changes in the way they conduct business. General Motors and Chrysler, closed hundreds of dealerships and reduced brands. Citigroup and Bank of America cut tens of thousands of positions and exited many parts of the world of finance.
Be patient America and work hard if you have a job. You are going to have to wait a while before we return to a normal employment environment.