All Articles Tagged "recession"
Layoff Cycle Leaves Many in Despair
(New York Times) — Not again. That is the plea of many Americans fearful about their jobs as the economy falters. “I don’t have any more savings or anything like that,” said Terrance Myricks, 21, who was dismissed for the second time in less than three years on Sept. 1. “I’ll probably have to rely on unemployment, which I’d really rather not do. And that’s assuming I can even get it.” Job growth halted entirely in the nation last month. And as Europe’s debt crisis acts as a drag on global growth and Washington debates another jobs bill, the possibility of a second recession is increasing in the United States along with the prospects of corresponding layoffs. Mr. Myricks’s tale of pain the second time around, economists fear, could become all too familiar. With headlines like the 30,000 layoffs planned at Bank of America and the United States Postal Service asking Congress to cut 120,000 workers, it is perhaps not surprising that workers’ concerns about job security are near the peak they reached during the last recession, according to a recent Gallup survey. At least one anecdotalstudy found that layoff announcements were greater in August than a year earlier.
How Blacks Think About Employment
In light of President Obama’s recent speech promoting his jobs bill, prominent African-American scholars have taken this opportunity to think deeply about the root causes of black unemployment. Blackvoicenews.com spoke to several leading African-American scholars who have examined the social customs, psychological damage, and persistent disconnection that consistently renders black unemployment twice as high as the national rate — recession or no. Also interviewed were activists who believe that blacks need to gain a much deeper understanding of the powers at work, political landscape, and changing technologies that impact job opportunities. Leaders need to create plans to attack harmful issues based on a broader scope of information.
Towards this end, “Researchers also believe that what is needed is to take the conversation about Black unemployment well beyond job training and creation and deep into an understanding of the future world of work as well as how to meaningfully connect youth and adults (including the formerly incarcerated) to this new and ever-changing employment landscape,” Blackvoicenews.com reports.
How is this to be done? Hope lies in the fact that the African-American community has typically been resilient and creative, even in the most dire of circumstances. While obvious issues like the education gap need to be addressed, more psychological elements like learned helplessness as a reaction to racism need to be unlearned. Also key is teaching poor blacks to think beyond mere survival, which will allow them to invest in developing the service-based skills required for 21st century jobs.
Another emotional issue is coping with the negative expectations levied on blacks in the work world, which can lead to a lack of reverence for work that comes from being disrespected by society. Again, this is a serious cultural element that cannot be solved by jobs training alone.
In particular danger of falling prey to these impediments are black men, who more often turn to an illegal “hustle” when society fails to fortify them for their tough road. This leads to a pattern of incarceration, which makes getting a job even more difficult. Combined with the lack of education that more black men struggle with, the end of manufacturing jobs that pay a decent wage (and require little education) has led to fewer black men supporting families.
This phenomenon alone has a wide-ranging negative impact on our community. Blackvoicenews.com elaborates:
Cleaning Up Your Credit is Killing the Economy
(Daily Finance) — America runs on credit. Before the recession in 2008, the U.S. consumer powered the economy forward with plenty of conspicuous consumption. Housing prices were on the rise, paychecks were plentiful, and the economy purred along as people used home equity loans and plastic to outspend their incomes. Three years seems like a lifetime ago. Since the fall of 2008, our relationship with credit has changed dramatically: More Americans have been cutting up their credit cards than opening new ones, according to data from the New York Federal Reserve. During the last 12 months, people cancelled 199 million credit cards and only opened 168 million new accounts. And since peaking at the end of 2008, the average balance has declined more than 20%. Unfortunately, our newfound fiscal restraint is killing the economy.
Will the American Jobs Act Work?
by Wayne Hodges
Fresh off his post-Labor Day speech in which he revealed preliminary details of the American Jobs Act, President Barack Obama’s disapproval rating escalated to a new high of 55% while his approval rating sunk to a new low of 48%, according to a CNN/ORC poll released Tuesday.
Obama’s approval numbers are even more dismal in the areas of unemployment and economic growth, where he received diminutive ratings of 39% and 36% respectively. A few months ago, in the aftermath of Osama bin Laden’s death, public support for President Obama couldn’t have been higher. Now, amid heightened concerns stemming from the infamous debt ceiling debates, the S&P credit downgrade and a stalled economy, Obama may have to sweat out re-election.
Given the fact eight out of ten Americans are completely dissatisfied with the economy, inquiring minds would like to know one thing: If approved through congress, will the $447 billion American Jobs Act work?
Obama says it’s imperative Congress take immediate action. ”We continue to face an economic crisis that has left millions of our neighbors jobless and a political crisis that has made things worse,” said Obama during his national address on employment. ”We need a tax code where everyone gets a fair shake and everybody pays their fair share. And I believe the vast majority of wealthy Americans and CEOs are willing to do just that if it helps the economy grow and gets our fiscal house in order.”
Here’s the details of the American Jobs Act:
Tax cuts
• The payroll tax would be cut in half on the first $5 million of businesses’ payrolls. The measure would cover 98 percent of U.S. businesses.
• Payroll taxes for businesses firms that increase their payrolls by adding new workers or increasing average wages would be eliminated. (The benefit would be capped at the first $50 million in payroll increases.)
• Payroll taxes would be cut in half for 160 million workers.
Jobs
• New tax credits of $5,600 to $9,600 to encourage the hiring of unemployed veterans.
• Renovation of 35,000 public schools with new science labs, Internet-ready classrooms and other upgrades.
• Increased spending on roads, rail, airports and waterways.
• A “Project Rebuild” program to people to work rehabilitating homes, businesses and communities.
• An extension of unemployment insurance for 5 million more Americans.
• A $4,000 tax credit for companies that hire long-term unemployed workers.
• A new government fund to expand job opportunities for low-income youth and adults.
On paper, the plan looks absolutely scrumptious.
Tax credits to employers in exchange for hiring new employees? Sounds pretty good. Grants and government funding geared towards putting our nation’s teens back to work? Not too shabby. Renovation projects designed to upgrade functionally obsolete schools? A little pricey, but necessary nonetheless.
Like I said, everything looks delicious.
However, skeptics are quick to point out discrepancies in Obama’s $787 economic stimulus package in 2009 as a precursor for what to expect with his new conception. Some have even labeled it a ‘bust.’ As of now, even the most optimistic of Obama supporters would concur it makes little sense to confute the critics. Why?
The U.S. unemployment rate sits at 9.2 percent, a figure that would be significantly higher if both the underemployed and those who have conceded rejection were included. By underemployed, we’re talking former full-time workers who have been inflicted with part-time hours and zero benefits. Also, a U.S. record 44.2 million Americans are currently receiving food stamps; a figure that’s expected to grow as new job creation remains stagnant, and has been for months.
The economic numbers are even more grim for African-Americans.
The black unemployment rate continues to marinate at a depression-like 16.1 percent, including 17 percent for black men, 13.8 percent for black women, and (gulp)… 39.9 percent for black teens. Just a few weeks ago, an estimated 5,000 unemployed souls braved the excessive dirty south heat to attend a job fair in Atlanta. Ninety companies were reportedly present as hundreds, perhaps thousands, camped out over night; wearing their best business suits and office heels.
Most of the job hopefuls spent hours waiting in line. And dozens more received medical treatment for heat exhaustion. To prevent a repeat occurrence, the expectation here is that the American Jobs Act will actually spur job growth. Then there’s the sensitive issue of education.
College graduates return home equipped with diplomas and high hopes. But, in reality, most are saddled with large student loan debt accompanied by rapidly shrinking job prospects. State budget cuts in the areas of public education continue to decimate urban communities nationwide where most school closings, mergers and scholastic extractions take place.
For instance, in Kansas City last year, former Superintendent John Covington contracted a U.S. record 26 public schools (most in the urban core) to help the district slice $68 million from its dwindling budget. As a byproduct, hundreds of teachers were either fired, laid off or reassigned.
Twelve months later, after Covington divorces Kansas City to serve in a similar role in Detroit, we learn his “right-sizing” project hasn’t fulfilled the academic goals many had anticipated. Today, the district’s accreditation remains in serious jeopardy of a state takeover.
Again, will the American Jobs Act work? Will the proposal protect education and keep teachers tenured as Obama profoundly announced on national television? Will college graduates receive a fair shake? Because, as of now, the aforementioned group is feeling nothing but melancholy, heartache and contempt. To say that a confidence boost is needed would be a vast understatement.
No excuses. The American Jobs Act simply has to work. ”We want them [Congress] to act now on this package,” said campaign strategist David Axelrod to ABC. “We are not in negotiation to break up the package. And it’s not an a la carte menu.” That’s right. An a la carte menu won’t do. For the economy to survive, a full entree and two sides are mandatory.
Wayne Hodges is the Editor-in-Chief of Mass Appeal News
Poverty an Unwelcome Growth Area
(New York Times) — Another 2.6 million people slipped into poverty in the United States last year, the Census Bureau reported Tuesday, and the number of Americans living below the official poverty line, 46.2 million people, was the highest number in the 52 years the bureau has been publishing figures on it. And in new signs of distress among the middle class, median household incomes fell last year to levels last seen in 1997. Economists pointed to a telling statistic: It was the first time since the Great Depression that median household income, adjusted for inflation, had not risen over such a long period, said Lawrence Katz, an economics professor at Harvard. “This is truly a lost decade,” Mr. Katz said. “We think of America as a place where every generation is doing better, but we’re looking at a period when the median family is in worse shape than it was in the late 1990s.” The bureau’s findings were worse than many economists expected, and brought into sharp relief the toll the past decade — including the painful declines of the financial crisis and recession —had taken on Americans at the middle and lower parts of the income ladder. It is also fresh evidence that the disappointing economic recovery has done nothing for the country’s poorest citizens.
American Dreaming Looking Mighty Nightmarish
(Daily Finance) — Every parent wants more for their child than they had for themselves. Ideally, each generation should move forward. But it’s not a given in America. A middle class upbringing does not guarantee the same status over the course of a lifetime, finds a new study Downward Mobility from the Middle Class: Waking up from the America Dream by The Pew Charitable Trusts. A third of Americans raised in the middle class, those defined as being between the 30th and 70th percentiles of the income distribution, fall out of the middle as adults, according to the report. In the parent’s generation, this definition of middle class roughly translates to income from about $32,900 to $64,000 in 2010 for a family with two adults and two children. For the children’s generation, the income range was $53,900 to $110,000 for a family of four. There are differences in the rates of downward mobility from the middle based on both family background and personal characteristics.
Small Profits Lead Business to Big Changes
(Wall Street Journal) — For nearly a century, Olympia Candy made mostly boxed chocolates and other bite-size treats. But last spring, the company’s owner converted part of his Strongsville, Ohio, factory into a diner serving burgers, grilled cheese sandwiches, onion rings and milkshakes. “We saw the way the economy was going and needed to do something,” says owner Bob McGrath, who had already cut staff to 18 from 24 employees while trimming expenses wherever possible. “It’s like a whole new business.” Mr. McGrath, who spent $60,000 converting his 15,000- square-foot factory, is like many entrepreneurs facing gut-wrenching decisions as a result of the prolonged economic slump. When basic cost-cutting and discounting fail, a growing number of small firms are shifting to more dramatic, sometimes risky overhauls of their businesses.
Recession Roommates: Ain't Nothin' Goin' on But the Rent
The Real World Consequences of Recession Talk
(USA Today) — Feeling glum? Unsure of the future? Putting plans on hold? Hoarding cash and buying gold? Chances are your negative state of mind has a lot to do with the double-dip crowd’s Weather Channel-like warnings of another catastrophic economic storm bearing down on the USA. The drumbeat of recession talk, which gathered steam Friday after the government reported that the economy created no jobs in August, has all but cemented a recession in the minds of investors — but not necessarily the type that is measured in negative GDP, ever longer lines at the unemployment office or shrinking output at factories. At least not yet. Instead, the gloomy predictions about the economy, which is now operating at stall speed, is causing a different type of contraction: shrinking confidence.
Black Unemployment Reaches New Height
(BET) — The Labor Department has released the August jobs report and the unemployment figured was unchanged from July’s 9.1 percent. In addition, the economy added only 17,000 new jobs. The African-American jobless rate climbed from 15.9 to 16.7, which only strengthens the argument of Black lawmakers that there is a critical need to specifically address this problem. The unemployment rate for Black males rose a whole percentage point to 18.0 percent and the rate for Black youths aged 16–19 jumped from 39.2 to 46.5 percent. According to William Darity, an economist at Duke University, the Black unemployment rate may be in part attributed to more people feeling less discouraged about finding employment and reentering the workforce to jumpstart their job searches, Still, he says, it is also a sign of the discrimination that continues to exist in the labor market.
