Thread: US economy could lose 8 million jobs this year

US economy could lose 8 million jobs this year

Posted Mar 04 2009, 06:13 AM
by Douglas McIntyre
Comments: 114

Using the U.S. government’s count, about 2.4 million people lost their jobs in America last year. That does not include people who have been jobless for an extended period and are no longer looking for jobs. In January, another 598,000 people were put onto the streets by their employers, moving the unemployment rate up to 7.6%.

According to MarketWatch, the average forecaster thinks the economy shed 640,000 jobs last month. Some of the estimates are well over 700,000. The impression that the employment situation is getting worse was confirmed by Ben Bernanke’s comments testimony to the Senate yesterday.

Analysts may admit to a frightening February unemployment rate, but most either believe that the economy is going to get better or don’t want to say in public what they think. While it is comforting to claim that the February numbers will be a bottom for employment erosion, that may not be the case. The joblessness rate could thunder higher between now and year-end.


During the 1980 to 1982 recession, unemployment went from 7.9% in October 1981 to 10.1% the following September. Over the two months after that it hit 10.8%. The notion that 10% unemployment will not arrive until next year, if it comes at all, is bogus.

The proposition that the stimulus package and new budget will create jobs may be true. It is also true that not enough money will reach companies which actually have payrolls to have much impact on their hiring this year. No one knows whether the programs will work. Since they are untested, particularly in an economy this large that is destroying itself this fast, trying to assess their chances of success is as tough as making a winning wager on which dog team will win the Iditarod.

The most important business dynamic that works against job creation in an economy dropping this quickly is the fact that every worker is a consumer. Layoffs are a vicious cycle that undermine the major pillar of any expansion. Consumer confidence drives the process that is the largest single component of GDP. In this recession, the trouble is compounded by an unprecedented lack of access to credit because of housing prices and the near-failure of the banking system.

The other root cause that bedevils any attempt to improve the job situation is that private enterprise is suffering from an unusually rapid loss of earnings. Corporate bankruptcies are beginning to rise sharply and even companies which have been considered rock solid such as General Electric (GE) and Intel (INTC) admit that their core businesses are being hurt badly and will not guess about when the situation will improve. Large companies have gotten into the habit of saying that they cannot forecast earnings because they have “limited visibility.â€

Americans - revolution, abandonment, and diversity are the words you need and must practice everyday within our job markets. Create your job, start a business, too.

Study the Schedule "E" and "C" tax forms everyone.

It is even more devastating when American companies lay off American workers and then outsource a large percentage of those jobs overseas to third-world countries. We should call it what it really is: Job Redistribution. The government should step in and prevent that from happening, especially in these times when American workers are hurting and in need of those jobs.

At least we have not been overrun by any foreign power (yet) which declares our money worthless, our houses too big not to handle more people and take everything including food to send back to the old country.
My close relative lived through all that during WWII. The family was fairly well off with an apartment in the city and a farm when the Russians marched into Estonia on a nice summer evening. Suddenly, every penny they had was worthless and though they had thousands, they were only given 10 rubles. Russian soldiers stripped the farm and burned the house. Farm produce ended up going to Russia, and the Russians kept sending empty trains back with large signs saying "food for starving Estonians." This crap happened in every country that eventually became part of the Soviet Socialist Republic.
And what amazes me is that so many Americans have no idea, even if they lived through that time. The major thing they remember about this time was the sugar and butter rationing.
We all really have to get a grip and understand what is going on in the rest of the world.