Article 43

 

Next Recession, Next Depression

Thursday, June 24, 2021

NWO - Whose Buying All the Houses?

image: home equity

A new company called Pacaso that was buying houses in the area. The company was co-founded by a Napa resident, and it converts houses into LLCs. Pacaso then sells shares of these corporate houses to multiple investors.
- A Startup Is Turning Houses Into Corporations

“The transformation of thousands of single homes into corporate rentals is a new business model”

Early buying by investors actually did serve a “public purpose” by soaking up vacant foreclosed homes, said Thomas Lawler, a former Fannie Mae (FNMA) economist who in 2005 warned of a housing bubble fueled by easy credit and a shift toward treating homes as investments rather than shelter. Now it’s just free-market capitalism and big money is coming in because they have an advantage. Is that good? Well, its gone from being good to being disturbing.
- Kiss Home Ownership Good-Bye, 2013

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America’s Largest Landlord Just Got Bigger
Blackstone Buys 17,000 Houses For $6 Billion

By Tyler Durdan
Zerohedge
June 22, 2021

Wall Street won’t rest until it become the biggest - and perhaps only - landlord in the US.

At least that’s the impression one gets by observing the behavior of the two Wall Street “black” giants, Blackrock and Blackstone. As a reminder, the WSJ SPARKED WIDESPREAD OUTRAGEe recently when it exposed what most industry insiders had known for a long time, namely that Blackrock (and other institutional investors) have been ravenously gobbling up US real estate. Now it’s Blackstone’s turn.

On Tuesday, the WSJ REPORTED that Blackstone - which already is NOT ONLY AMERICA’S LARGEST LANDLORD but also the WORLD’S LARGEST REAL ESTATE COMPANY with a $325 billion portfolio - has agreed to buy single-family rental company Home Partners of America for $6 billion, betting the demand for suburban housing will stay hot even as the pandemic eases. Home Partners owns more than 17,000 houses in the United States; the company buys, rents out and eventually offers its tenants a chance to buy them. Now all those functions will be done by the largest US private equity firm.

Single-family rentals have been a favorite institutional bet over the past year, as real estate investors have sought new places to invest during a pandemic that kept Americans away from offices, hotels and malls. The result, as the WSJ reported, has been a frenzy among 200 companies and investment firms who have entered the house hunt: computer-assisted flipper Opendoor Technologies, money managers including J.P. Morgan and BlackRock, platforms such as Fundrise and Roofstock that buy and arrange for the management of rentals on behalf of individuals and builder LGI Homes Inc., which now reports wholesale home sales to bulk buyers in its quarterly results.

At the same time, remote work and school created strong demand for suburban homes by buyers and renters alike, pushing prices up and inventory down.

Clearly the tenant demand is still robust, and that’s driving significant cash flow increases at the property level, said Jeff Langbaum, an analyst at Bloomberg Intelligence. “Smart people with smart money want to get a piece of that.”

Not so smart people with dumb money also want a piece of that.

Unlike BlackRock which is a relatively recent entrant into the US housing market, Blackstone - which built Invitation Homes - into the largest single-family landlord following the U.S. foreclosure crisis, has rekindled its interest. Last August, it led a group of investors that acquired a minority stake in Toronto-based Tricon Residential Inc., which owns and operates more than 31,000 homes and apartments.

As Bloomberg notes, there may also be a case of sellers regret. The company exited its stake in Invitation Homes in 2019, selling the last of its position at $30.10 per s"hare. Blackstone made about $7 billion on its stake in Invitation, more than doubling its money, Bloomberg reported at the time. But shares in the company have increased by 25% since then.

So now it’s time for Blackstone to easily double its money again, once again courtesy of the Fed’s ultra easy money which grants the likes of Blackstone virtually unlimited funds, even as most Americans struggle to pay off their 20% APR credit cards.

The flood of investor capital comes as low inventory pushes prices higher at the fastest pace ever, and tenants opt for rental houses over apartments. Moments ago, the NAR reported that the median existing home sale price hit a record $350,000, up 24% in the past year.

image: existing home sales prices

.... while sales of houses in the $1 million price range are up 245%.

image: existing home sales price percent change

Invitation Homes posted an occupancy rate of more than 98% in the first quarter, allowing the industry giant to increase rents on new leases at a record rate.

Rising rents and low inventory have also made single-family landlords a target across the political spectrum.

Recently, book author J.D. Vance started a firestorm on Twitter by arguing that Wall Street investors were making it hard for regular Americans to buy homes… and spoiler alert: he’s right - although it’s hardly new, and is something we have been saying since 2013 when we first profiled Wall Street as America’s New Landlord (click the image to enlarge):

image: rental home infographoic

In 2019, Democratic Senator Elizabeth Warren blasted Blackstone for “shamelessly profiting from the U.S. foreclosure crisis,” arguing that Wall Street’s investment in single-family homes was a huge loss for America’s renters.

SOURCE

Posted by Elvis on 06/24/21 •
Section Revelations • Section NWO • Section Dying America • Section Next Recession, Next Depression
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Monday, May 03, 2021

No There Isn’t A Worker Shortage

image long-tern unemployment March 2021

The Biden administration - and Biden - was one of the principal architects of the policies that fleeced the working class and made war on the poor - is nothing more than a brief coda in the decline and fall, set against which is China’s rising global economic and military clout.
- Imagining A Real American Rescue, March 2021

More Americans than ever (39%) now think that if people cant find work for an extended period of time, the government should do nothing at all to help them.
- Real Help, Real Indifference, and Real Disdain For The Long-Term Unemployed, 2012

As someone who is active in this industry I should say it was Tourism industry long term plan to use pandemic as an excuse to TERMINATE OLDER, unionized workers and once the pandemic is over hire younger workers with no benefits and lower wages. Many of our members lost their jobs permanently as hotels terminated them and will never be called back.  And hotels are already talking about more cuts in wages, pension etc…
- Anonymous

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With five million long-term unemployed from the pandemic, Pinocchio’s nose couldn’t grow any longer if he tried to convince me employers can’t find workers.

A easier pill to swallow is employers love desperate workers.

A desperate worker won’t ask for a raise, won’t care about the boss not taking COVID precautions, willl be afraid to join a union, will come to work sick, etc.

Claiming specifically that workers don’t want to come back to work - tells me the days of STIMULUS CHECKS and enhanced unemployment may be over soon. Not because that’s the right thing to do - but because we live in a corporate controlled oligarchy, and the oligarchs want us go back to work - cheap - and shut up.

A few years ago I battled with the inner conflict of supporting a union strike, or scabbing to replace a striking worker - I CHOSE TO SCAB because being sodamn poor, and needed work so bad - does that you.

Other excuses for business owners crying about workers are maybe they used up their VISA QUOTAS for the year, or trying to GET THE GOVERNMENT TO FOOT THE BILL FOR TRAINING workers - things we’ve seen in the past like THIS and THIS.

They want cheap labor.  Why they’re not doing the usual of outsourcing and offshoring our jobs is the big question.  It’s not they lost any of their [power.

If the heavens are looking down fondly working America - now is the time for a general strike for a liveable minimum wage, affordable health care, and all the other things we’ve lost the past few decades.

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By Laura Clawson
Daily Kos
April 30, 2021

Employers are outraged that workers won’t come crawling to work for peanuts in a pandemic

The big push is on to blame the American Rescue Plan for businesses not being able to find enough workers to fill their jobs. Business owners - restaurant owners in particular - are lining up to tell reporters how those darn lazy workers would rather stay home and collect unemployment than go back to work. Rarely do these stories of employer pain ask questions like, say, how much pay they’re offering or how careful they’re being with their workers health in the midst of the pandemic. Stories asking people why they’re hesitating to go back to work are mysteriously not so common.

"People felt abused in the beginning stages of opening back up,” a Washington, D.C., server and bartender TOLD WASHINGTON CITY PAPER in one of the few stories that did consider the workers side. It shook people enough to say, “I don’t think I want to get back into this. If you’re not going to follow protocols and you’re not going to have my back if guests get out of line, what’s the point?

A woman who bartends as second job in Florida EXPLAINED TO THE SOUTH FLORIDA SUN-SENTINEL that she’d seen ‘a lot of people leaving the restaurant industry for other careers partially due to COVID and the hours changing and not making consistent money.” The people she was talking about had gone into fields like nursing and accounting - but business owners looking for applicants aren’t talking about the people who went elsewhere, they’re talking like everyone is just sitting home.

And about that. People still have kids at home they’re responsible for taking care of, as even THIS SERIES OF EMPLOYER SOB STORIES from The Wall Street Journal acknowledges. They’re still afraid of contracting COVID-19, because, again, many have experienced bosses who will put their health at risk.

Some of those bosses are the very same ones who are featured in articles wailing about how difficult it is to hire people, as Anne Helen Petersen found: “In Waterville, Ohio, for instance, there’s this sad, sad song about the difficulties finding workers at Dale’s Bar & Grillwhich somehow fails to mention that the owner is a Covid hoaxer (he believes that doctors have been falsely labeling deaths as covid-related) and has brazenly violated masking rules, and did not require employees to wear masks.”

FOX NEWS BUSINESS interviewed a California restaurant owner who feels aggrieved that his former employees don’t want to come back after “He told them he would only allow them to come back and work full time or the same shift they had before.” That restaurateur was PREVIOUSLY SEEN explaining to the Los Angeles Times why he was defying a shutdown order. Now, with his workers, he’s all” It’s my way or the highway,” and when they choose the highway, he whines about it. I dunno, maybe give people a little flexibility and respect to accommodate their changed lives after 13 months of historic pandemic.

And, yes, there’s a money issue. “Even for unskilled positions” one of the employers who talked to The Wall Street Journal “is offering several dollars over minimum wage.” What largesse! Except hes not getting many takers so, you know, maybe offer more. Even with the current $300 a week federal supplement to unemployment insurance, 58% of people would earn as much or more at their previous jobs, and frankly, that says more about the jobs than about the people.

FLORIDA provides another dispatch from the “struggling employers” genre, and a high-profile politician - Sen. Marco Rubio - tweeting “Florida small business owners are all telling me the same thing, they can’t find people to fill available jobs. You can come up with all kinds of reasons & wave around all the Ivy League studies you want, but what does common sense tell you is the reason?”

What does common sense tell me is the reason, Marco? Well, the NOTORIOUS for DELAYS IN UNEMPLOYMENT BENEFITS. Most people are probably getting significantly less, and a LIVING WAGE for a single person with no children is $14.82 an hour in Florida. So I’m thinking that Florida employers need to offer higher pay.

“If there’s one thing I’ve learned about American capitalism,” Anne Helen Petersen writes, “it’s the skill and swiftness with which it translates resistance into personal, moral failure - which is precisely what so many of these business owners and politicians have done. Exactly. Workers are saying “enough.” If bosses won’t pay a living wage and respect their workers health and safety, people who’ve gutted it out through a year of terror and watching their loved ones get sick and die may not be so willing to come crawling. Thats not a personal failing, and talking like it is shows how bad your values are. Not that it was in any doubt when it came to, say, Marco Rubio.

SOURCE

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U.S. Labor Shortage? Unlikely. Here’s Why

By Heidi Shierholz
The Commons
May 4, 2021

There are lots of anecdotal reports swirling around about employers who can’t find workers. Just search “worker shortages” online and a seemingly endless list of stories pops up, so it’s easy to assume there’s an alarming lack of people to fill jobs. But a closer look reveals there may be a lot less to this than meets the eye.

First, the backdrop. In good times and bad, there is always a chorus of employers who claim they can’t find the employees they need. Sometimes that chorus is louder, sometimes softer, but its always there. One reason is that in a system as large and complex as the U.S. labor market there will always be pockets of bona fide labor shortages at any given time. But a more common reason is employers simply don’t want to raise wages high enough to attract workers. Employers post their too-low wages, can’t find workers to fill jobs at that pay level, and claim they’re facing a labor shortage. Given the ubiquity of this dynamic, I often suggest that whenever anyone says, I can’t find the workers I need, she should really add, “at the wages I want to pay.”

Furthermore, a job opening when the labor market is weak often does not mean the same thing as a job opening when the labor market is strong. There is a wide range of “recruitment intensity” that an employer can apply to an open position. For example, if employers are trying hard to fill an opening, they will increase the compensation package and perhaps scale back the required qualifications. Conversely, if employers are not trying very hard, they may offer a meager compensation package and hike up the required qualifications. Perhaps unsurprisingly, RESEARCH SHOWS that recruitment intensity is cyclical. It tends to be stronger when the labor market is strong, and weaker when the labor market is weak. This means that when a job opening goes unfilled when the labor market is weak, as it is today, employers are even more likely than in normal times to be holding out for an overly qualified candidate at a very cheap price.

This points to the fact that the footprint of a bona fide labor shortage is rising wages. Employers who truly face shortages of suitable, interested workers will respond by bidding up wages to attract those workers, and employers whose workers are being poached will raise wages to retain their workers, and so on. When you don’t see wages growing to reflect that dynamic, you can be fairly certain that labor shortages, though possibly happening in some places, are not a driving feature of the labor market.

And right now, wages are not growing at a rapid pace. While there are issues with measuring wage growth due to the unprecedented job losses of the pandemic, wage series that account for these issues are NOT SHOWING an increase in wage growth. Unsurprisingly, at a RECENT PRESS CONFERENCE, Federal Reserve Chairman Jerome Powell dismissed anecdotal claims of labor market shortages, saying, We don’t see wages moving up yet. And presumably we would see that in a really tight labor market.

Further, when restaurant owners can’t find workers to fill openings at wages that aren’t meaningfully higher than they were before the pandemic - even though the jobs are inherently more stressful and potentially dangerous because workers now have to deal with anti-maskers and ongoing health concerns - that’s not a labor shortage, that’s the market functioning. The wages for a harder, riskier job should be higher.

Another piece of evidence against widespread labor shortages is the fact that the labor market added more than 900,000 JOBS in March, the seventh highest percent increase in jobs in the last half century. It is difficult to imagine that labor shortages were creating a large impediment to hiring when hiring was happening at such a scale. Further, despite many anecdotes of restaurants in particular not being able to find workers, the labor market added 280,000 jobs in the leisure and hospitality sector in March, the sixth highest percent increase in the last half century, even though AVERAGE WEEKLY EARNINGS for nonsupervisory workers in that sector equate to annual earnings of just $19,651. With these kinds of numbers it is difficult to take the claims of widespread shortages very seriously.

And there are far more unemployed people than available jobs in the current labor market. In the latest data on job openings, there were nearly 40% more unemployed workers than job openings overall, and more than 80% more unemployed workers than job openings in the leisure and hospitality sector.

While there are certainly fewer people looking for jobs now than there would be if Covid weren’t a factor, many people are out of the labor market because of Covid-related care responsibilities or health concerns - without enough job openings to even come close to providing work for all job seekers, it again stretches the imagination to suggest that labor shortages are a core dynamic in the labor market.

One question people raise is whether the expanded pandemic unemployment benefits keep workers from taking jobs. Right now, for example, unemployed workers who receive unemployment insurance benefits get not just the (very meager) level of benefits they would get under normal benefits formulas, but an additional $300 a week. That means that some very low-wage workers - like many restaurant workers - may receive more in unemployment benefits than they would at a job. Is this making jobs hard to fill? There was a lot of fuss about this same question a year ago, when workers were getting a $600 additional benefit a week. There were SEVERAL RIGEROUS PAPERS that looked at this question, and they all found extremely limited labor supply effects of that additional weekly benefit. If the $600 a week wasn’t keeping people from taking jobs then, it’s hard to imagine that a benefit half that large is having that effect now.

I cut my labor-market-monitoring teeth during the Great Recession, and it was a formative experience. In the aftermath of that recession, there were nearly constant tales of employers who couldn’t find workers. The stories at that time about LABOR SHORTAGES IN CONSTRUCTION, when the unemployment rate in construction was still close to 13%, have a similar feel as claims today of labor shortages in restaurants, considering that the unemployment rate in leisure and hospitality is CURRENTLY 13%. The Great Recession was caused by the bursting of a giant housing bubble that threw many construction workers out of work, and the Covid recession was caused by a public health crisis that shuttered many restaurants.

In both cases, counterintuitive reports about employers not able to find the workers they need really captured the public’s imagination. But a look under the hood reveals that beyond the anecdotes there is little evidence of a real shortage.

SOURCE

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We Regret to Inform You That Workers Are Not Suddenly Winning
Wages and job openings are up. Heres why they won’t stay that way.

By Timothy Noah
The New Republic
June 11, 2021

How do you like the Great American Labor Shortage so far? Wages are rising faster than they have in nearly 40 years, REPORTS BUSINESS INSIDER, excluding a freakish momentary spike last year when Covid-19 lockdowns began. The number of JOB OPENNGS (9.3 million) and the number of people quitting their jobs (4 million, or 2.7 percent) are higher than weve seen in 20 years. Prices, meanwhile, are UP 5 PERCENT over May 2020, the fastest rise in the Consumer Price Index in 13 years. When you exclude volatile food and energy prices, The New York Times REPORTS, prices are rising faster than they have in almost 30 years.

The Wall Street Journal editorial page, from which I have borrowed the phrase GREAT AMERICAN LABOR SHORTAGE, is practically suicidal, while The New York Times is heralding an imminent dictatorship of the proletariat. WORKERS ARE GAINING LEVERAGE OVER EMPLOYERS RIGHT BEFORE OUR EYES was the headline last week on the Times’ front page. The papers Neil Irwin conceded that the jump in wages and job vacancies “reflects a strange moment” in which the economy is reopening faster than workers are returning to work. But “the shift builds on changes already underway in the tight labor market preceding the pandemic,” as demographic trends shrank the pool of available workers. Karen Fichuk, chief executive of the staffing company Randstad North America, told Irwin that “we’re witnessing a historic moment for the American labor force.”

We are not witnessing a historic moment for the American labor force. We aren’t even witnessing a genuine labor shortage like the one we saw at the peak of the tech boom during the late 1990s. WeҒre seeing a momentary respite from the ghastly long-term shift of national income from labor to capital that - ACCORING to those Bolsheviks at McKinsey and Co. has been increasing especially fast since 2000.

Nothing that happens during a nationwide pandemic, even as its winding down, follows normal rules. Economic recovery from the Covid lockdown will taper off next year as it becomes a distant memory. (I don’t intend to remember very much about this pandemic; do you?) The current mismatch between job openings and available workers will likely end sooner than that. Indeed, if enhanced unemployment insurance benefits are finally doing what Republicans claimed, incorrectly, they were doing all along - keeping unemployed workers from returning to work - then come fall, when they expire, you may be reading Page One stories about a labor surplus killing off wage growth.

The evidence throughout the pandemic has shown that enhanced unemployment benefits - a $600 add-on to weekly benefits, followed by six months of no add-on, followed by a $300 add-on that expires in early September - did not depress employment to any significant degree. A much-cited UNIVERSITY OF CHICAGO STUDY concluded that the small disincentive created by the U.I. benefit expansion was outweighed by the economic stimulus created by the spending of that benefit, creating a net increase in employment. AS RECENTLY AS MAY 29, a paper by economists at the Federal Reserve Bank of San Francisco said the disincentive effect of the $600 and $300 add-ons was “small.”

There’s still no empirical evidence that these circumstances have changed. But increasingly, economists think the $300 work disincentive has lately become significant. Too many employers are going begging right now, and alternative explanations are in short supply.

For a long time it seemed likely that remote or hybrid schooling for young children was keeping mothers from returning to work, but a persuasive May study by Harvard’s Jason Furman and Wilson Powell III, and the University of Maryland’s Melissa Kearney, SAID that wasnt the case. Rather, they found that during the pandemic, parents of young children left the workforce at about the same rate as other groups. Georgetown economist Harry Holzer points out that the study didn’t look at workers caring for elderly parents; still, that would be a much smaller group.

It’s very likely that some significant proportion of the unemployed aren’t returning to work because it still doesn’t feel safe. A May survey sponsored by the National Retail Federation FOUND 35 percent of respondents said they wouldn’t feel comfortable returning to work unless they knew their co-workers were vaccinated. A CENSUS SURVEY TAKEN IN MARCH showed that the number of people not working for fear of contracting Covid-19, though declining, was a still significant 4.2 million.

Yet the Biden administration announced this week that, with the exception of hospitals, clinics, and doctors offices, workplaces will not have to follow the emergency temporary Covid standard that then-candidate Joe Biden excoriated Donald Trump for not imposing. It’ll be up to employers to compel returning workers to get vaccinated and/or wear masks. And although an APRIL SURVEY by the Rockefeller Foundation found that 60 percent of employers planned to require returning workers to show proof of vaccination, that means 40 percent of employers will not. The employers that don’t will likely be mostly in low-wage industries, where the perceived labor shortage is concentrated.

Josh Bivens of the left-leaning Economic Policy Institute has floated an INTERESTING HYPOTHESIS that wages might not be accelerating as quickly as we think. May’s wage growth was driven by the leisure and hospitality sector, which consists mostly of workers at restaurants that customers are only just starting to patronize again. What if that wage surge, Bivens posits, is really a tip surge? This sector reported a huge decline in wages in March and April 2020 as restaurants were shutting down, even as other sectors were experiencing that freakish momentary wage spike at the start of the pandemic.

What’s different about restaurants? Well, Bivens observes, restaurant workers get tips, and when customers disappear, tips disappear. Now customers are coming back, along with tips.

Ultimately, it doesn’t matter what explanation you favor for the sudden mismatch between available jobs and willing workers, or for the recent spike in wages. The conditions that created these things are temporary. Writing in The New York Times, Dan Alpert, managing partner at Westwood Capital and adjunct professor at Cornell Law School, EXPRESSES WORRY not about a labor shortage but about an imminent labor surplus, particularly in low-wage jobs. As unemployment benefits dry up, Alpert said, there’s a decent chance “there won’t be enough jobs for the people eventually looking for work because so many businesses closed during the pandemic” (especially the SMALL ONES where low-wage workers typically work).

As for wages, yes, the aging of America is shrinking the pool of available workers. It remains to be seen whether Trumpian opposition to immigration will continue to dominate the GOP. But I have a hard time imagining Republican legislators will keep the spigot closed if wage pressures cause employers to howl in pain.

I doubt wage pressures will rise even that high. That’s because of a largely overlooked factor: the rise of the CRAP JOB. Even as the U.S. worker pool shrinks, the quality of available jobs will likely diminish, as it has now for decades. Alpert helped create a very useful economic indicator called the JOB QUALITY INDEX to trace the displacement over time of good jobs by crap jobs (as measured by pay). In effect, Alpert argues, crap jobs are becoming the norm. Policymakers and corporations (over whom banks hold the whip hand far more than during most of the twentieth century) prefer it that way.

Why have wages stagnated during the past four decades? The EPIs Bivens and Lawrence Mishel argued last month that the blame rests with high interest rates, proliferating trade deals, ever-more-brazen wage theft (i.e., employers failure to pay minimum wage or overtime), an eroding legal minimum wage, diminishing legal overtime eligibility, judicial decisions restricting the ability of workers to sue their employers, deregulation, privatization, economic concentration, a fissuring workforce (meaning a trend toward outsourcing labor within the U.S. to smaller, less scrupulous companies), and declining union power. These were policies consciously pursued by government at all levels at the behest of the business lobby.

I’m inclined to believe that the decline of union power - that is, the shrinking proportion of private-sector workers who belong to unions, amid steep government barriers to union organizing - is the linchpin. Ultimately, it all comes down to the exercise of power, and workers just don’t have any. That won’t change until the labor movement is rebuilt. The House-passed Protecting the Right to Organize Act would be a good start, but nobody expects it to pass anytime soon. It is therefore a childish fantasy to presume the American worker is gaining any real leverage over employers. Management has little to fear.

Timothy Noah is the author of The Great Divergence: Americas Growing Inequality Crisis and What We Can Do About It.

SOURCE

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Job searches haven’t jumped in states canceling unemployment benefits early

By Denitsa Tsekova
Yahoo Money
June 22, 2021

Job seekers in the 10 states that canceled federal unemployment programs early haven’t accelerated their online searches for new jobs, DATA from Indeed found.

In fact, job searches in those states are below late April levels and lower than the volume in states that aren’t opting out of the programs.

“We aren’t seeing a jump in search activity right around the time that those benefits ended,” Jed Kolko, Indeed’s chief economist, told Yahoo Money. “That search activity in those states that have already opted out the enhanced federal UI benefits is a little bit below the national trend.”

Twenty-six states - all but one with GOP governors - eliminated or plan to eliminate the unemployment programs this month or in early July, including the popular $300 weekly bonus.

Alaska, Iowa, Mississippi, and Missouri canceled the programs on June 12, the earliest states to do so. Job search activity ticked higher after the cancellation, but is down 4% from the baseline national job search level in late April.

Idaho, Indiana, Nebraska, New Hampshire, North Dakota, and Wyoming ended the programs on June 19. Similarly, job search activity there also edged higher before the expiration, but remains 1% lower than the baseline national job search level in late April.

Only 19.6% of unemployed workers were on temporary layoff unlike early in the pandemic - meaning fewer workers are being recalled and more are looking for new jobs instead.

Other factors that are probably holding people back from searching’

Twenty of the 26 states have halted or intend to halt the Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs. PUA provides benefits to workers like contractors who dont otherwise qualify for regular unemployment insurance. PEUC provides additional weeks of benefits.

In those 26 states, more than 4 million workers will see their benefits slashed by at least $1,200 a month in June or early July, losing a total of $22.1 billion in benefits, according to estimates by the Century Foundation.

Several studies have found that the extra pandemic-era unemployment benefits largely don’t keep workers from accepting new jobs - most recently a PAPER by the Federal Reserve Bank of San Francisco. If seven out of 28 unemployed workers received job offers they would normally accept, only one declined because of the extra $300 in weekly unemployment benefits, the paper found.

“There are other factors that are probably holding people back from searching like continued concern about the virus,” Kolko said. “Some people might be waiting until later in the summer when schools are closer to opening and when people get a chance to take some time off.”

SOURCE

Posted by Elvis on 05/03/21 •
Section Revelations • Section NWO • Section Dying America • Section Next Recession, Next Depression
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Monday, April 26, 2021

The Next Depression Part 64 - Half of America In or Near Poverty

image: poor

2021 Update: Half of America In or Near Poverty

We need Guaranteed Jobs. President Biden’s proposed Civilian Climate Corps is a positive step in this direction.

By Paul Buchheit
Common Dreams
February 22, 2021

Poverty, as DEFINED BY THE WORLD BANK, is a “pronounced deprivation in well-being.” This describes the millions of Americans who are UNABLE TO PAY for medical treatment; who suffer the stress of delinquent RENT and MORTGAGE payments; who see a steady decline of jobs that pay enough to support a family; and who are victims of the surge in drug and alcohol and suicide DEATHS OF DESPAIR that continue to increase among poor Americans during the COVID-19 crisis.

The facts and numbers from numerous sources reflect the reality of deprivation in America, and help to CONFIRM what has been CALLED the “sharpest rise in the U.S. poverty rate since the 1960s.”

The Majority of American Households Are Living Paycheck-to-Paycheck During the Pandemic

The Washington Post SUMMARIZES: “According to Nielsen data, the American Payroll Association, CareerBuilder and the National Endowment for Financial Education, somewhere between 50 percent and 78 percent of employees earn just enough money to pay their bills each month....[this was] before the coronavirus pandemic....[since then] the number of first-time unemployment claims has exceeded 1 million per week, an unprecedented number in U.S. history.”

There’s much more evidence of Americans in trouble. An NPR REVIEW states that “survey after survey for years has found that most people in the U.S. live paycheck to paycheck.” One of these is a SURVEY REPORTED BY CNBC, which concluded that “63% of Americans have been living paycheck to paycheck since Covid hit.” Both SCHWAB’S 2020 MODERN WEALTH SURVEY and a recent HARRIS POLL found that a sizable majority of Americans are suffering financial stress during the pandemic. The AMERICAN PSYCHOLOGICAL ASSOCIATION concurs. In BANKRATE’S LATEST POLLING NUMBERS, 6 out of 10 Americans would be unable to afford an unexpected $1,000 expense.

With month-to-month survival preoccupying most Americans, retirement savings are far beyond reach. SCHWAB’S WEALTH SURVEY found that Americans need a net worth of $655,000 to be “financially comfortable.” According to CREDIT SUISSE, NOBODY in the bottom half of North America has more than about ONE-TENTH of that retirement amount.

Half of American Households Were Even Uncertain about FOOD for the Holidays. And Soon the Rent is Coming Due..

Not enough food! ACCORDING to the Census Bureau’s HOUSEHOLD PULSE SURVEY for October 14-26, 2020, 56% of households with children reported that they were “not very confident” that they would be able to be able to afford food for the holidays. BROOKINGS REPORTS that two in five households with mothers with pre-teen children were food insecure, meaning that “a household has difficulty providing enough food due to a lack of resources.”

And not enough money for rent! Thankfully, RENT and MORTGAGE moratoriums have been extended through the end of March and June, respectively. But then what? Twelve million renters owe an average of $5,600 in back RENT and utilities. A $1,400 stimulus paymentor even $5,600 for a family of fourחwill keep them housed for just a few months.

Over Half of Black and Latino Families Lack the Funds to Sustain Them for Three Months at a Poverty Level

According to RESEARCH AT DUKE UNIVERSITY, 57 percent of Black families with children and 50 percent of Latino families with children were poor in terms of net worth in 2019. By comparison, the rate for white families was 24 PERCENT. Said Christina Gibson-Davis, co-author of the study, “Their savings are virtually nil, and they have no financial cushion to provide the basics for their children.”

A STUDY conducted in part by the Universities of Chicago and Notre Dame found that the poverty rate for Blacks rose over 5 percent in just six months.

Almost Half of America’s Children Live in Households that Can’t Meet Basic Expenses

This is the greatest shame of all. By late October, 2020 ONE OUT OF EVERY FIVE American kids was living in poverty conditions. And it’s much worse for Black and Latino families. Incredibly, TWO OUT OF THREE Black children (and slightly less for Latinos) live in households that “have trouble covering usual expenses,” according to a Census Bureau Household Pulse Survey conducted in early 2021.

According to One Careful Study, Over Half of Americans Are Trying to Survive Without Full-Time Living-Wage Jobs

Official unemployment figures inspire skepticism when ‘employed’ is defined as working just ONE HOUR per week. A REALISTIC PORTRAYAL OF LIVING WAGE EMPLOYMENT is provided by the Ludwig Institute for Shared Economic Prosperity, which considers part-time workers, those working full-time but earning too little to climb above the poverty line, and discouraged workers who’ve stopped looking for unemployment. As of December 2020, a full 53.9 percent of working-age Americans did not have living-wage full-time jobs.

As further evidence of underemployment, BROOKINGS NOTES that “Fifty-three million Americans, 44 percent of the labor force, earn low wages.” For these underpaid workers, the MEDIAN HOURLY WAGE in 2019 was $10.22, the median annual income was $18,000. Poverty level.

Half of America has to scramble for second and third jobs, gig jobs, short-term and temporary jobs, to make ends meet. A stunning 62% of survey respondents plan to work a second job in 2021 to sustain their families.

And on top of all this, MCKINSEY JUST REPORTED that “Households with less than $30,000 in annual income faced double the unemployment rates of higher-income households.”

Glimmers of Hope

Researchers at Columbia University ESTIMATED that the support provided by the CARES Act maintained the U.S. poverty rate at a level about 30 percent lower than otherwise expected. STIMULUS payments have kept us afloat. An overwhelming MAJORITY of Americans are in favor of further relief, and the Biden Administration is preparing a massive STIMULUS BILL to accommodate a troubled populace.

But for most Americans, stimulus checks will NOT SUSTAIN family needs for more than a few months. We need GUARANTEED JOBS. President Biden’s proposed CIVILIAN CLIMATE CORPS is a positive step in this direction.

There is plenty of POTENTIAL WORK out there. Biden’s website describes a national investment to “create millions of good, union jobs rebuilding America’s crumbling infrastructure from roads and bridges to green spaces and water systems to electricity grids and universal broadband..” Just as with FDR’s Civilian Conservation Corps in the 1930s, young Americans would have the opportunity to improve themselves, make money, and serve their country. A recent Gallup poll FOUND that nearly 70% of workers don’t feel ‘engaged’ (enthusiastic and committed) in their jobs. A Guaranteed Jobs program could change that. With half of America facing poverty conditions, we can’t afford to wait.

Paul Buchheit is an advocate for social and economic justice, and the author of numerous papers on economic inequality and cognitive science. He was recently named one of 300 Living Peace and Justice Leaders and Models. He is the author of “American Wars: Illusions and Realities” (2008) and “Disposable Americans: Extreme Capitalism and the Case for a Guaranteed Income” (2017). Contact email: paul (at) youdeservefacts.org.

SOURCE

Posted by Elvis on 04/26/21 •
Section Dying America • Section Next Recession, Next Depression
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Monday, April 19, 2021

Suffering And More Suffering

image: dying america

The first Gilded Age rested on industrialization; the second, on deindustrialization. In our time, a new system of disaccumulation looted American industry, liquidating its assets to reward speculation in “fictitious capital.” After all, the rate of investment in new plants, technology, and research and development all declined during the 1980s. For a quarter-century, the fastest-growing part of the economy has been the finance, insurance and real estate (FIRE) sector.
- Class Warfare 2

The unemployment rate is not always the best indicator of the economy’s health. In fact, it’s probably a much worse indicator right now… The labor force participation rate [is more accurate.]
- Labor Participation

People that really understand political economy have a saying: “capitalism implodes into fascism.” Thats because it produces mass poverty, not riches, decline, not upward mobility - and the new poor then turn on everyone, neighbours, friends, allies, values, morals.
- Third Worls USA Part 11

Whatever future developments may prove to be, my best guess is that the U.S. will continue to maintain a facade of constitutional government and drift along UNTIL FINANCIAL BANKRUPTCY overtakes it. Of course, bankruptcy will not mean the literal end of the U.S. any more than it did for Germany in 1923, China in 1948, or Argentina in 2001-2002. It might, in fact, open the way for an unexpected restoration of the American system, or for military rule, revolution, or simply some new development we cannot yet imagine.
- Empire vs Democracy, Tom Dispatch 2007

Within CORPORATE boardrooms and thinktanks, inside USA government sanctums: globalization describes a PRIVATIZATION of the world. It is about the global corporatization of PRACTICALLY EVERYTHING: from goods and services to water, air, health care and education; from ideas and histories to art, genes and body parts. It is about the “rule of law” and therefore the military power of the United States of America (and its so-called דallies in assorted multi-nation alliances like NATO, WTO, etc.) - doing the bidding of the propertied few and their giant corporations.
- Globalization Defined

Now, GLOBALISTS are not the only source of our social pain. WE BEAR SOME RESPONSIBILITY.  When we are NOT VIGILANT, when we IGNORE OUR OWN IGNORANCE and refuse to learn, when we lie to ourselves, when we cater to personal superficial desires rather than taking the future into account, we open the door for the devil, as it were. Evil, like conscience, resides in us all.
- True Evil

Abuse CAN ONLY take place if enough people are SILENT about it, which is to say that those who are silent about the abuse are complicit in it. EVIL can only PLAY ITSELF OUT without restraint when good people see what is happening and do nothing. Staying silent in the PRESENCE OF ABUSE, though seemingly a passive role, is to unwittingly play an active role enabling our own victimization.
- Breaking the Vow Of Silence

---

It’s hard to imagine how we can hide and ignore so much financial sorrow and suffering over the years:

OBAMA’S BIGGEST BLEMISH remains the ongoing tragedy of mass unemployment. Not only does this have a human element - the countless lives harmed or destroyed by poverty and desperation - but it is a huge drag on our economy. Mass unemployment reduces spending - the engine of our economy - which in turn, reduces growth. And without meaningful growth, there’s no way to reduce long-term debt without inflicting a large dose of harmful austerity. That, in my view, is unacceptable.

AFTER THE 2007-09 FINANCIAL CRISIS, the imbalances and risks pervading the global economy were exacerbated by policy mistakes. So, rather than address the structural problems that the financial collapse and ensuing recession revealed, governments mostly kicked the can down the road, creating major downside risks that made another crisis inevitable. And now that it has arrived, the risks are growing even more acute.

About 400,000 small business went under last year, and nine million more workers are unemployed now than a year ago:

WHITE HOUSE:

Since the beginning of this pandemic, 400,000 small businesses have closed - 400,000 - and millions more are hanging by a thread.

NEW YORK TIMES:

Roughly 8 million fewer Americans are working today than at this time last year, just before the coronavirus gripped the economy… The United States doesn’t have a proven strategy for minimizing long-term unemployment.

NEW YORK TIMES AGAIN:

The next six months could witness one of the biggest consolidations of corporate power in the United States in almost a century, yet a variety of legal and economic factors may leave the federal government unable to stop it.

The essence of the problem is that during the extended economic crisis created by the coronavirus pandemic, many large companies and especially their stock market values - have been growing rapidly while their small business competitors have faced something of an apocalypse. More than 400,000 small businesses have already closed and millions more are at risk.

CBS:

More than one-third of U.S. nonprofits are in jeopardy of closing within two years because of the financial harm inflicted by the viral pandemic, according to a study being released Wednesday by the philanthropy research group Candid and the Center for Disaster Philanthropy.

MEANWHILE:

Shoplifting is up markedly since the pandemic began in the spring… what’s distinctive about this trend, experts say, is what’s being taken - more staples like bread, pasta and baby formula… Those who are stealing to survive are not out there talking to the Washington Post about it… They’re ashamed to be in the position in which they have to steal.

AND:

In 2020, the National Diaper Bank Network distributed more than 100 million diapers to 220 diaper banks across the country, a 67 percent spike year-over-year. Most public aid programs dont cover diapers, which run about $80 a month per child.

Now watch this:

image: homeless in california

HOW can you not be moved?

There’s so much BAD STUFF and INDIFFERENCE to it going on for decades - that it just floors me how people DON’T KNOW - or DON’T WANT TO KNOW - what’s happening in our political, social and economic lives - while society turns into an expose of massive suffering and massive denial of everything.

I just posted an article about PEOPLE THAT LIVE IN STORM DRAINS in Las Vegas.  Add them to those in growing TENT CITIES - and maybe you’ll get an idea how horrible it is living in the United States with its brutal ruling class making sure more and more of us are forced into poverty.

The man in the White House - just SCREWED 17 MILLION OF OUR FELLOW SUFFERING AMERICANS from a lousy $1400 stimulus check:

During the campaign for the two Georgia Senate races, Joe Biden REPEATEDLY PROMISED to pass $2,000 stimulus checks if the Democrats won. After they did, the administration argued that $2,000 really meant $1,400 in addition to the $600 that had already gone out in the December rescue package.

But now singles making between $80,000-100,000 and couples making between $160,000-200,000 will get nothing. The Washington Post’s Jeff Stein REPORTS that roughly 17 million people who previously got checks now will not.

The supposed justification here is that moderates want the aid to be more “targeted.” In fact this formula is horribly inaccurate, because the income data the IRS uses is from the year before the pandemic (unless people have already filed their taxes and by the way, if your income decreased in 2020, you should do that immediately). This formula is therefore doubly wrong - there are no doubt millions of people who have lost jobs and should qualify but wont, and a smaller number that have gotten raises and shouldn’t qualify but will. And this change will only save a pitiful $12 BILLION.

Speaking of those stimulus checks what are people SPENDING THE MONEY ON?

Two-thirds of recipients say they use them for groceries, monthly bills

For all the talk of revenge spending and pent-up demand for travel… just 13 percent of stimulus check recipients plan to spend the money on discretionary activities or nonessential items,” said one analyst.

the majority of that money continues to be spent on groceries, rent and other monthly bills

More than 40 percent of households are earning less now than they were prior to the pandemic

“More than half of the jobs lost last year have been recovered,"McBride said. “But there are still nearly 9 million jobs that disappeared that haven’t yet come back. There are 18 million Americans still drawing some form of unemployment compensation.”

More than 6 in 10 Americans believe the $1,400 won’t last them longer than three months, while 34 percent say the extra funds wont even last them one month, the Bankrate survey found.

Remember the last recession?  And that new term - jobless recovery?  What the heck is a JOBLESS RECOVERY?

Businesses might also curb their spending. INSTEAD of responding to sales increases with hiring, they could invest in relatively cheaper technology to replace eliminated positions.

Economists don’t have to go back very far to find an example of a recovery that didn’t push unemployment back to its prior lows. The lowest unemployment fell after the 2001 recession was 4.4% in December 2006 (it hit that number again in March 2007). That was significantly lower than the 6.5% high in 2003. But it wasn’t close to the sub-4% rates seen in 2000.

That sort of recovery was what economists call a jobless recovery. We weren’t really growing wages and income for people in the bottom half of the economic distribution,” says Alan Berube, an economist with the Brookings Institution.

Along with the great recession of a decade ago another new term came into our awareness - and LONG-TERM UNEMPLOYMENT - joined our vocabulary.

Those of us that survived, and haven’t disappeared into a black of hole of homelessness or SUICIDE - are still around to talk about it.

What we’re going through now is far worse - regardless how many QUESTIONABLE FACTS the people that claim to represent us spew out of their mouths.

FEDERAL RESERVE Chairman Jerome Powell seems like an honest guy and NOTES:

America has witnessed the sharpest drop in labor force participation in many decades

HERE’S WHAT we’re talking about:

image: population to employed ratio - great recession through  now

image: population to employed ratio - great recession through  now

The jaggedy blue lines explain what I mean when I say WE HAVEN’T RECOVERED FROM THE LAST RECESSION.

The folks at Wolfstreet UNDERSTAND:

The employment-population ratio, which is the broadest measure of employment and covers the working-age population (16 years or older), ticked up to 57.6%. It has gained a minuscule 0.2 percentage points since October (57.4%)

Long-term, the Employment Population Ratio is one of the most dismal two-decade trends out there. The ratio drops during each recession - that much is normal - but until 2000, the ratio more than recovered each time. In the three recessions since 2000, it never fully recovered before the next recession hit, a testimony to companies trying to bring their costs down by sending work overseas or automating it away

So many of us want a job - and can’t find one.

Not even a LOUSY TEMP or GIG JOB.

If President BIDEN doesn’t do something (like a NEW DEAL 2.0) to turn things around and grow back the middle-class - I’ll SUPPORT anyone - maybe even the devil himself - to help replace THE RULERS of our once great country with a system that represents people like you and I.

For those of us that got layed off from regular (W2) jobs early last year, and got EXTRA UNEMPLOYMENT - President Biden may be overlooking us this year. I know people who are denied EXTENDED UNEMPLOYMENT BENEFITS in 2021, and competing with the millions layed off the past year - for the few jobs out there.

The help for those longest-unemployed from this collapse is a tax refund for the FIRST $10,200 UNEMPLOYMENT INSURANCE COLLECTED last year. Gee thanks, Mr President.

Like the last recession - when this latest financial crisis is over - the rich will be richer, poor will be poorer, and middle-class squeezed a little more out of existence.

And they’ll talk about another JOBLESS RECOVERY:

[L]abour’s share of income is going to continue its downward trend after the current crisis ends. Aside from the profit incentive that has always existed to motivate automation, this crisis has highlighted the pandemic risks associated with relying on labour availability. Industries that employed millions of people pre-pandemic, such as accommodation and food service, as well as retailers, will take advantage of the technological advances in the coming years, suggesting that the so-called “jobless recovery” we saw after the Great Financial Crisis might end up proving to have been an absolute.

Posted by Elvis on 04/19/21 •
Section Revelations • Section Dying America • Section Next Recession, Next Depression
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What Unemployment Insurance Tells Us About Work During A Pandemic

image: enough of red/blue politics

What Unemployment Insurance Tells Us About Work During A Pandemic

By Samuel Cai
NPR
March 30, 2021

Editor’s note: This is an excerpt of Planet Money’s newsletter. You can SIGN UP HERE.

One of the most expensive provisions in President Biden’s COVID-19 relief plan involves giving unemployed workers an added $300 per week, through September 6th, on top of their existing state unemployment insurance benefits. While the House version of the bill called for $400 per week, this was revised down to $300 in the Senate proposal, due to a last minute push supported by moderate Democratic Senator Joe Manchin. Senator Manchin ARGUED that an extra $400 per week was too much, and could stifle people’s motivation to find jobs. “We want people to get back to work,” he said. “We’re going to have a hard time getting people ready to go back in and keep the economy going.” Seems like basic economics: if you make nearly as much money as you do working, then why would you work?

Every state in the nation requires individuals to seek and accept available work in order to claim unemployment benefits. Still, assuming unemployed people can choose whether to work or not, economic logic tells us that each dollar increase in unemployment benefits reduces the incentive to work, by making the alternative, not working, slightly more appealing. Finding the right unemployment benefit levels can be a tricky balancing act for politicians: they want to provide as much of a social safety net as possible, but they also want to encourage people to get back to work as soon as they can. A NEW WORKING PAPER from Professor Arindrajit Dube of the University of Massachusetts at Amherst, however, suggests that policymakers need not worry: higher unemployment benefits don’t seem to affect employment levels the way many economists assumed.

Last March, President Trump’s CARES Act stimulus package began providing a $600 per week federal bonus in unemployment benefits. The bonus affected people differently depending on which state they lived in, based on income levels in the state, and the generosity of state unemployment benefits. For example, the median unemployed person in Louisiana received benefits worth 143 percent of their previous income because of the federal bonus, compared to 39 percent without the bonus. The median unemployed person in Hawaii also had their unemployment benefits boosted to a similar level 149 percent of their previous income ח but even without the bonus, they were already receiving benefits worth 62 percent of their previous income.

The federal bonus from the CARES Act eventually expired, and by mid-September of last year, states returned to their pre-pandemic levels of benefits. For the next few months, Dube compared how employment levels varied across states using data collected by the U.S. Census Bureau. He concluded that states with low unemployment insurance benefits (and thus the strongest incentives for returning to work) did not increase employment levels more than states with high levels of unemployment insurance benefits. In fact, just the opposite: high unemployment benefits led to slightly higher employment levels.

So policymakers can breathe easy, then: raise the unemployment benefits, and watch the employment numbers rise!

Well, there are a few caveats. While Dube did find that high unemployment benefits led to slightly higher employment levels, the rise was so slight as to be statistically insignificant. The results, therefore, don’t rule out the possibility that high unemployment benefits may in fact have led to lower employment levels. Dube pointed out, however, that his results do suggest that any decrease in employment would be relatively small; smaller than most estimates from prior research on the topic.

Dube also noted that the period he studied was a deep economic downturn and had unique health restrictions. It’s unclear, therefore, whether the results he found would hold up even during the later periods of the pandemic. Biden’s relief plan addresses a time period with economic and public health conditions markedly different than those of the CARES Act. Those conditions could change how people weigh the value of unemployment insurance benefits against the value of working, so economists can’t fully predict how labor markets will behave during the rest of the pandemic and recovery process. While no one can be certain which policies will lead to the most streamlined recovery, Dube’s work suggests that at least in some cases - providing more support to unemployed workers may not be the delicate balancing act policymakers once thought it was.

SOURCE

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“Biden’s Trillions” Spark Historic Labor Shortage: Record 42% Of Businesses Can’t Fill Job Openings

By Tyler Durden
ZeroHedge
April 15, 2021

Last week we made a remarkable observation: despite some 100 million Americans not in the labor force (of which 94 million do not want a job)..

image: not in labor force 4/2021

... there is now a full-blown labor shortage in the US, for one simple reason - trillions in Biden stimulus are now incentivizing potential workers not to seek gainful employment, but to sit back and collect the next stimmy check for doing absolutely nothing in what is becoming the world’s greatest “under the radar” experiment in Universal Basic Income.

Consider the following striking anecdotes:

· Early in the Covid-19 pandemic, Melissa Anderson laid off all three full-time employees of her jewelry-making company, Silver Chest Creations in Burkesville, Ky. She tried to rehire one of them in September and another in January as business recovered, but they refused to come back, she says. They’re not looking for work.

· Sierra Pacific Industries, which manufactures doors, windows, and millwork, is so desperate to fill openings that itԒs offering hiring bonuses of up to $1,500 at its factories in California, Washington, and Wisconsin. In rural Northern California, the Red Bluff Job Training Center is trying to lure young people with extra-large pizzas in the hope that some who stop by can be persuaded to fill out a job application. WeӒre trying to get inside their head and help them find employment. Businesses would be so eager to train them, says Kathy Garcia, the business services and marketing manager. ԓThere are absolutely no job seekers.”

Even more amazing: a stunning 91% of small businesses surveyed by the NFIB said they had few or no qualified applicants for job openings in the past three months, tied for the third highest since that question was added to the NFIB survey in 1993.

One of our favorite labor market metrics, the so-called “take this job and shove it” indicator- or the “Quits” rate from the JOLTS survey - is the latest confirmation of how empowered workers feel: in March the number of people quitting jobs hit 2.3% of overall employment in January, just a tenth of a percentage point below the record going back to 2001.

But what is most striking is the context on these figures: recall that just one year ago, the unemployment rate was a depression-era 14.8%. And while it has since dropped to 6%, it remains well above the 3.5% rate of February 2020, before the pandemic. So judging from the jobless rate - which the Federal Reserve tracks closely - theres still plenty of slack in the labor market.

Fast forward to this week when we got the results of the latest, April, NFIB Small Business survey.

First the good news: small business optimism index rose 2.4 points in March to 98.2, its first return to average levels since last November.

Next the not so good news: business uncertainty increased too about whether it is a good time to make capital expenditures. But the kicker: 42% reported job openings that could not be filled, a record high.

image: nfig small business hard to fill jobs 4/2021

The key quote from NFIB Chief Economist Bill Dunkelberg was Main Street is doing better as state and local restrictions are eased, but finding qualified labour is a critical issue for small businesses nationwide.” And the explicit admission that BIden’s “trillions” in stimulus are behind this predicament:

“Small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force.”

As if it wasn’t clear, the NFIC added that “finding eligible workers to fill open positions will become increasingly difficult for small business owners.”

Seven percent of owners cited labor costs as their top business problem and 24% said that labor quality was their top business problem. Finding eligible workers to fill open positions will become increasingly difficult for small business owners.

And for those readers quick to bash potential employers for being stingy and not simply raising wages to find qualified employees, a net 28% of owners reported raising compensation (up three points) and the highest level in the past 12 months, while another 17% plan to raise compensation in the next three months. Still, with the labor shortage well ahead of wage hike plans..

image: small business compensation 4/2021

... one things is clear: profits margins - if only for small businesses - are about to collapse, making the big megacorporations winners once again.

As for wages, while owners are still kicking and screaming, the Universal Basic Income so generously doled out by the government has reset the minimum practical wage so high that companies will have no choice but to hike compensation, the Fed just may get the benign, “non-transitory” inflation it has been so desperately seeking for so long… at least as long as the government continues to print welfare checks for some 18 million Americans.

image: collecting unemployment benefits 4/2021

Summarizing the data, Rabobank’s Michael Every writes “so unemployment benefits are ironically helping to push up wages, at least temporarily - which I am sure nobody intended, but underlines just how radical policy has to get in the US to make it happen.”

His conclusion: ‘’the problem is that small businesses trying to get past Covid are least well placed to lead this socio-economic charge; and if this points to a wage-price spiral - which is still unlikely - then the bond market will soon be pointing its finger at the Fed.”

SOURCE

Posted by Elvis on 04/19/21 •
Section Dying America • Section Next Recession, Next Depression
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