Tag Archives: job loss

‘A Crisis of Historic Proportions’

Unemployment moving map

The New Poor

Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.

Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.

Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.

Yet the social safety net is already showing severe strains. Roughly 2.7 million jobless people will lose their unemployment check before the end of April unless Congress approves the Obama administration’s proposal to extend the payments, according to the Labor Department.

Here in Southern California, Jean Eisen has been without work since she lost her job selling beauty salon equipment more than two years ago. In the several months she has endured with neither a paycheck nor an unemployment check, she has relied on local food banks for her groceries.

She has learned to live without the prescription medications she is supposed to take for high blood pressure and cholesterol. She has become effusively religious — an unexpected turn for this onetime standup comic with X-rated material — finding in Christianity her only form of health insurance.

“I pray for healing,” says Ms. Eisen, 57. “When you’ve got nothing, you’ve got to go with what you know.”

Warm, outgoing and prone to the positive, Ms. Eisen has worked much of her life. Now, she is one of 6.3 million Americans who have been unemployed for six months or longer, the largest number since the government began keeping track in 1948. That is more than double the toll in the next-worst period, in the early 1980s.

Men have suffered the largest numbers of job losses in this recession. But Ms. Eisen has the unfortunate distinction of being among a group — women from 45 to 64 years of age — whose long-term unemployment rate has grown rapidly.

In 1983, after a deep recession, women in that range made up only 7 percent of those who had been out of work for six months or longer, according to the Labor Department. Last year, they made up 14 percent.

Twice, Ms. Eisen exhausted her unemployment benefits before her check was restored by a federal extension. Last week, her check ran out again. She and her husband now settle their bills with only his $1,595 monthly disability check. The rent on their apartment is $1,380.

“We’re looking at the very real possibility of being homeless,” she said.

Every downturn pushes some people out of the middle class before the economy resumes expanding. Most recover. Many prosper. But some economists worry that this time could be different. An unusual constellation of forces — some embedded in the modern-day economy, others unique to this wrenching recession — might make it especially difficult for those out of work to find their way back to their middle-class lives.

Labor experts say the economy needs 100,000 new jobs a month just to absorb entrants to the labor force. With more than 15 million people officially jobless, even a vigorous recovery is likely to leave an enormous number out of work for years.

Some labor experts note that severe economic downturns are generally followed by powerful expansions, suggesting that aggressive hiring will soon resume. But doubts remain about whether such hiring can last long enough to absorb anywhere close to the millions of unemployed.

A New Scarcity of Jobs

Some labor experts say the basic functioning of the American economy has changed in ways that make jobs scarce — particularly for older, less-educated people like Ms. Eisen, who has only a high school diploma.

Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks.

“American business is about maximizing shareholder value,” said Allen Sinai, chief global economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.”

During periods of American economic expansion in the 1950s, ’60s and ’70s, the number of private-sector jobs increased about 3.5 percent a year, according to an analysis of Labor Department data by Lakshman Achuthan, managing director of the Economic Cycle Research Institute, a research firm. During expansions in the 1980s and ’90s, jobs grew just 2.4 percent annually. And during the last decade, job growth fell to 0.9 percent annually.

“The pace of job growth has been getting weaker in each expansion,” Mr. Achuthan said. “There is no indication that this pattern is about to change.”

Before 1990, it took an average of 21 months for the economy to regain the jobs shed during a recession, according to an analysis of Labor Department data by the National Employment Law Project and the Economic Policy Institute, a labor-oriented research group in Washington.

After the recessions in 1990 and in 2001, 31 and 46 months passed before employment returned to its previous peaks. The economy was growing, but companies remained conservative in their hiring.

Some 34 million people were hired into new and existing private-sector jobs in 2000, at the tail end of an expansion, according to Labor Department data. A year later, in the midst of recession, hiring had fallen off to 31.6 million. And as late as 2003, with the economy again growing, hiring in the private sector continued to slip, to 29.8 million.

It was a jobless recovery: Business was picking up, but it simply did not translate into more work. This time, hiring may be especially subdued, labor economists say.

Traditionally, three sectors have led the way out of recession: automobiles, home building and banking. But auto companies have been shrinking because strapped households have less buying power. Home building is limited by fears about a glut of foreclosed properties. Banking is expanding, but this seems largely a function of government support that is being withdrawn.

At the same time, the continued bite of the financial crisis has crimped the flow of money to small businesses and new ventures, which tend to be major sources of new jobs.

All of which helps explain why Ms. Eisen — who has never before struggled to find work — feels a familiar pain each time she scans job listings on her computer: There are positions in health care, most requiring experience she lacks. Office jobs demand familiarity with software she has never used. Jobs at fast food restaurants are mostly secured by young people and immigrants.

If, as Mr. Sinai expects, the economy again expands without adding many jobs, millions of people like Ms. Eisen will be dependent on an unemployment insurance already being severely tested.

“The system was ill prepared for the reality of long-term unemployment,” said Maurice Emsellem, a policy director for the National Employment Law Project. “Now, you add a severe recession, and you have created a crisis of historic proportions.”

Fewer Protections

Some poverty experts say the broader social safety net is not up to cushioning the impact of the worst downturn since the Great Depression. Social services are less extensive than during the last period of double-digit unemployment, in the early 1980s.

On average, only two-thirds of unemployed people received state-provided unemployment checks last year, according to the Labor Department. The rest either exhausted their benefits, fell short of requirements or did not apply.

“You have very large sets of people who have no social protections,” said Randy Albelda, an economist at the University of Massachusetts in Boston. “They are landing in this netherworld.”

When Ms. Eisen and her husband, Jeff, applied for food stamps, they were turned away for having too much monthly income. The cutoff was $1,570 a month — $25 less than her husband’s disability check.

Reforms in the mid-1990s imposed time limits on cash assistance for poor single mothers, a change predicated on the assumption that women would trade welfare checks for paychecks.

Yet as jobs have become harder to get, so has welfare: as of 2006, 44 states cut off anyone with a household income totaling 75 percent of the poverty level — then limited to $1,383 a month for a family of three — according to an analysis by Ms. Albelda. Full Story

Obama Sees Light at end of Tunnel in a Shrinking Economy

Obama Says “pointed in the Right Direction”

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US food stamp list tops 34 million for first time

For the first time, more than 34 million Americans received food stamps, which help poor people buy groceries, government figures said on Thursday, a sign of the longest and one of the deepest recessions since the Great Depression

Enrollment surged by 2 percent to reach a record 34.4 million people, or one in nine Americans, in May, the latest month for which figures are available.

It was the sixth month in a row that enrollment set a record. Every state recorded a gain in participation from April. Florida had the largest increase at 4.2 percent.

Food stamp enrollment is highest during times of economic stress. The U.S. unemployment rate of 9.5 percent is the highest in 26 years.

Average benefit was $133.65 in May per person. The economic stimulus package enacted earlier this year included a temporary increase in food stamp benefits of $80 a month for a family of four. Full Story

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Demand At Food Banks Up, Even In Well-Off D.C. Suburbs

Mezmure Dawit, 22, showed up at the food bank in Fairfax, Va., looking for help. He said he’d lost his job as a maintenance man at an apartment building last month and he needed food for his 14-year-old brother and 18-year-old sister.

He said their father had left them five months ago. “He just left. No money, nothing,” said Dawit, wearing crisp blue jeans and a striped shirt. “It’s been hard, man.”

As the national unemployment rate nears 10 percent, more and more people are turning to food banks for help keeping food on their plates. Feeding America, the nation’s largest domestic hunger-relief charity, reports that demand at food banks across the United States is up 30 percent from last year.

Feeding America spokeswoman Maura Daly told the Huffington Post that as recently as May of last year, 90 percent of Feeding America’s clients cited food and fuel costs as their reasons for needing assistance. By December 90 percent were citing unemployment as the primary reason. Full Story

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U.S. Recession Worst Since Great Depression, Revised Data Show

The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

The world’s largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008, compared with the 0.8 percent drop previously on the books, the Commerce Department said yesterday in Washington. Gross domestic product has shrunk 3.9 percent in the past year, the report said, indicating the worst slump since the Great Depression.

Updated statistics also showed that Americans earned more over the last 10 years and socked away a larger share of that cash in savings. The report signals the process of repairing tattered balance sheets following the biggest drop in household wealth on record may be further along than anticipated.

“The current downturn beginning in 2008 is more pronounced,” Steven Landefeld, director of the Commerce Department’s Bureau of Economic Analysis, said in a press briefing this week. The revisions were in line with past experience in which initial figures tended to underestimate the severity of contractions during their early stages, he said.

America’s Make Believe Economy

What Economy?
There’s Nothing Left to Recover
Paul Craig Roberts

There is no economy left to recover. The US manufacturing economy was lost to offshoring and free trade ideology. It was replaced by a mythical “New Economy.”

The “New Economy” was based on services. Its artificial life was fed by the Federal Reserve’s artificially low interest rates, which produced a real estate bubble, and by “free market” financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fraudulent financial products.

The real economy was traded away for a make-believe economy. When the make-believe economy collapsed, Americans’ wealth in their real estate, pensions, and savings collapsed dramatically while their jobs disappeared.

The debt economy caused Americans to leverage their assets. They refinanced their homes and spent the equity. They maxed out numerous credit cards. They worked as many jobs as they could find. Debt expansion and multiple family incomes kept the economy going.

And now suddenly Americans can’t borrow in order to spend. They are over their heads in debt. Jobs are disappearing. America’s consumer economy, approximately 70% of GDP, is dead. Those Americans who still have jobs are saving against the prospect of job loss. Millions are homeless. Some have moved in with family and friends; others are living in tent cities.

Meanwhile the US government’s budget deficit has jumped from $455 billion in 2008 to $2,000 billion this year, with another $2,000 billion on the books for 2010. And President Obama has intensified America’s expensive war of aggression in Afghanistan and initiated a new war in Pakistan. Full Story

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V.P. Biden: “We Misread How Bad The Economy Was”

IBM’s Anti-American Labor Practices

Today, on International Workers’ Day, I bring you a story on IBM’s labor practices. The post IBM Outsourcing Thousands of Jobs to India has been one of the most widely read and commented articles on this blog. Understandably, there is a lot of agitation around the issue of outsourcing American jobs. I recently spoke with Alliance@IBM Representative Rick White on what is transpiring at IBM. Following the interview are a series of videos with IBM in the news. The hypocritical comments from IBM CEO Sam Palmisano in the first video, and his audacity to ask for stimulus money, are reprehensible.

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Can you tell us a little about your role in the Alliance IBM. What are you attempting to accomplish?

I’m presently the Treasurer, Web Maintenance, Organizer, and Health & Safety Representative for Alliance@IBM CWA Local 1701. Alliance@IBM was formed in August of 1999 as a union and employee advocate for IBM employees, domestic USA.

We’re a National/Local which is not an oxymoron; but appears that way. We represent all IBMers that want to be represented by CWA (Communications Workers Of America) and we also serve as a Local for each IBM USA location where we have active and public members. Since the 1990’s, 40% or more of USA IBMers have been working from home. Many of these workers are in IBM departments that are scattered around the world, i.e. their boss could be in Texas, their co-workers as far away as China; while they work at home in Poughkeepsie, NY.

We also work closely with unions in Europe and Japan that are firmly placed in IBM locations there. Since IBM is an “International” company by definition, we believe that it should be unionized internationally. That status is yet to be realized, but we’re continuing to work at it.

Our goals are preserving and improving our rights and benefits at IBM. We also strive towards restoring management’s respect for the individual and the value we bring to the company as employees. Our mission is to make our voice heard with IBM management, shareholders, government and the media. While our ultimate goal is collective bargaining rights with IBM, we are building our union now and continue to challenge IBM on the many issues facing employees from off-shoring and job security to working conditions and company policy.

Our membership is large by local standards, but very small by national standards. We have @5000 total supporters and about 360 dues paying members, out of a company population of about 120,000 USA wide. The reasons we formed in 1999 were centered around IBM’s treatment of it’s workers; both blue-collar and white-collar in regard to the Pension swindle and layoff practices, and other issues in the 1990’s. We forced IBM to change its policy on its Cash Balance pension plan in 1999, from no choice for IBMers with less than 25 years of service; to the option for an additional 35,000 IBMers (40 years of age and 10 years of service) to choose between the Cash Balance pension and the defined benefit pension (the one workers with 25 years service had).

We even got help from the Senate Finance Committee, when they asked then IBM HR director, Tom Bouchard to testify before them and explain why there was such a disparity between the two plans. Mr. Bouchard announced and offered the choice between the two plans on the day he testified before the committee.

How many jobs have been lost at IBM in 2009? Prior to then?

That is a hard question to answer. Mostly because of the churn, over the years and the offshoring and outsourcing; which has been happening in IBM, steadily since the 1990’s. The other reason is that IBM rarely announces the numbers. When they do; its a hard figure to confirm. IBM USA employed roughly 135,000 people in the 1990’s…we’ve run the calculations many times, and the number keeps changing because of the way IBM does business in other countries. We can never get a net job loss. My guess is somewhere between 15,000 and 25,000 jobs or more, since the 1990’s. Again, it’s very hard to know for sure. (Note: Resource Action is IBM’s term for firing. it’s not a lay-off because the workers are not recalled to work.)

How many of those job losses were a result of outsourcing?

Again, very difficult to answer. It’s very complicated; or appears to be as a result of IBM’s practices world wide. In 2007 and 2008 IBM replaced 14,000 jobs world-wide. We still don’t know for sure, how many of those were here in the US.

Did IBM offer to relocate the employees to the countries the jobs were being outsourced too?

No. IBM usually tells employees being RA’ed that they have 30 days to find another job within IBM; however, behind the scenes, IBM freezes internal IBM hiring for IBMers being fired. It’s nothing but an egregious ruse.

You may also be referring to an IBM company policy called “Project Match”; which offers IBMers that are fired, an “opportunity” to move out of the United States and go to IBM Brazil, IBM Russia, IBM India, IBM China, IBM Vietnam, IBM Philippines, etc. Supposedly, IBM pays for the trip, but that’s it. Once the ex-IBMer leaves he/she cannot have their USA IBM job back. They must work for the IBM location they chose and figure out how to function in the same job capacity, for say 40% of their pay or less in their new ‘home’ country. They are also assigned the additional task of training the employees in that country, once they arrive.

For example, an Operation Analyst may make between $40,000 and $60,000/year working in the US for IBM. When he/she becomes an IBM India employee in the same job, they make about 250,000 rupees or $5,000.00/year. Living conditions are unknown to us so far. Rick Clark, fired IBM employee spoke to the press about his experience during his RA and subsequent offer to go to another country. To read the interview with Rick Clark: If You Want a Job…

Were there employees who chose the option of relocation?

There may be. We haven’t confirmed any yet. Our Comments sections have mentioned people actually doing it, but they didn’t leave their name or contact information. My guess is, not many take it.

What is the solution to keeping these jobs in the U.S.?

One step to take is for IBMers and ex-IBMers to speak out about this and come forward and testify, if necessary, to the Federal govt about this program and the offshoring. Globalism may not be stopped; but we should stop giving bailout money and tax breaks to companies that offshore and outsource, without regard to the impact on the USA.

IBMers need to organize and get IBM to the bargaining table. In exchange for very limited outsourcing, a union contract could stipulate a process that benefits both the workers and the company. The details could be worked out to everyone’s advantage.

Explain what an “At Will Employee” is.

Basically, “At Will Employee” means that a worker has the right to quit without notice for any reason or no reason; and the Company has the right to fire the worker without notice for any reason or no reason. The workers have no bargaining rights whatsoever, under this policy. The Dept. of Labor will not help workers who are fired under this policy. That’s why a union contract is so important. Most workers in the USA today do NOT understand “At Will Employee” policy.

How are labor laws skewed in favor of corporations (such as IBM) over the employee?

They have high priced lawyers that have subverted labor law in favor of the corporations. They have used labor law cases and sympathetic labor board members to turn labor law against the employees. They use their power, money and influence to run roughshod over workers.

Most present day labor policies are derived from the NLRB decisions on the multitude of cases brought before the NLRB, between unions and management of a company. These are disputes, over a large list of reasons for filing an Unfair Labor Practice or other reasons, between labor and management. Many are only significant to the particular company or union and do not affect the whole USA. For example, a union organizer gets fired for “misconduct” during an organizing campaign at a particular company. The union files a ULP (Unfair Labor Practice) and the case goes to an NLRB appointed administrative judge. The judge decides in the union’s favor, and the company appeals to the NLRB labor board. The NLRB also decides in favor of the union organizer. The company appeals to the US District court of appeals The Court decides in favor of the company. This means only union organizers in that Court’s district are affected by that decision; however, if the union appeals to the Supreme Court, and the Court hears the case and then decides in the company’s favor, the decision applies to ALL union organizers in that situation, in the entire country.

A relatively recent case (2004) was the reversal of the Weingarten Rights. The right of employees to have union representation at investigatory interviews was announced by the U.S. Supreme Court in a 1975 case (NLRB vs. Weingarten, Inc. 420 U.S. 251, 88 LRRM 2689). These rights have become known as the Weingarten rights. The reversal basically removed Weingarten Rights from non-union workers, enacted in 2000, under the Clinton Administration. Which means that workers called into the boss’s office for a disciplinary meeting or investigatory interview, etc.; no longer have the right to have a co-worker witness the meeting and/or exchange between the affected worker and his/her boss.

Union workers still have Weingarten Rights. Here is a link to a Weingarten Rights explanation: EMPLOYEE’S RIGHT TO UNION REPRESENTATION

How common is it for an employee nearing their retirement to be fired from their job at IBM?

Fairly common since the 1990’s. IBM disguises the reason, to steer clear of age discrimination law suits; Although there have been Class Action law suits filed, in the past.

A review of their Resource Action packages will show, statistically, that the older workers (45-60yrs) are affected in greater amounts than the younger ones (18-35yrs).

Are there currently any online petitions or actions in circulation?

We currently have a “Take Action” on our web site to contact The President, Vice President, and the respective Congressional and Senate Reps for the person’s districts: Take Action” is “Job cuts and job shifting offshore by IBM!

Where can readers learn more about issues re to IBM?

Our web site is chock full of information about IBM: AllianceIBM There are also many articles on the internet that discuss IBM and its practices and Globalism in general.

From Endicott Alliance

From Endicott Alliance

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IBM CEO Palmisano

IBM criticized for plans to shift U.S. jobs to India while seeking stimulus money

IBM draws criticism for job cuts, outsourcing

Sacramento’s Tent City Residents to be Evicted

After Oprah brought national attention to the tent city in Sacramento, California, Governor Schwarzenegger paid them a visit. The occupants of tent city were excited, thinking that Schwarzenegger’s visit means they are now going to be taken care of, but are they simply being evicted with no future homestead in place? Is the offer of a free dumpster a way to clean the area up before they get ousted?

Schwarzenegger Visits Sacramento’s ‘Tent City’

California “tent city” for homeless to be closed

The mayor of California’s state capital unveiled plans on Thursday to shut down a sprawling “tent city” of the homeless that has drawn worldwide media attention as a symbol of U.S. economic decline.

Sacramento Mayor Kevin Johnson promised to first make alternative shelter space available for the estimated 150 men and women who inhabit the squalid encampment near the American River, at the edge of the city’s downtown.

Johnson, who toured the area with California Governor Arnold Schwarzenegger a day earlier, said he hoped to have the ramshackle settlement cleared of tents and debris in the next two to three weeks.

“We want to move as quickly as we can,” he told a news conference, insisting the city was determined to treat the tent dwellers with compassion.

“They are people out there. We have to do whatever we can do,” he said. “We as a city are not going to shy away from it. We’re going to tackle it head-on.”

Advocates for the homeless applauded the mayor’s action. Municipal authorities in Sacramento have been debating the fate of the tent city for weeks.

Sacramento has one of the highest mortgage foreclosure rates in the United States, and the homeless total in the city and surrounding county is estimated to have jumped nearly 10 percent last year to nearly 2,700. About half are believed to be living outdoors, according to a local survey.

The tent city site, near an almond-processing plant beside a railroad freight line, made global headlines after it was featured last month on “The Oprah Winfrey Show.” Full Story

Food and Shelter: The New American Dream

ABC News California’s Economy & Un-Employment Worsen 3/02

Laying-off America

U.S. private sector cuts 697,000 jobs in February

food

U.S. private sector job losses accelerated in February, according to a report by ADP Employer Services that suggests hefty employment declines are on the way in the government’s payrolls report due on Friday.

ADP said on Wednesday that private employers cut 697,000 jobs in February versus a revised 614,000 jobs lost in January. The January job cuts were originally reported at 522,000.

It was the biggest job loss since the report’s launch in 2001 and showed the misery of declining employment spreading broadly and evenly throughout the economy.

The service sector, which often resists the grip of recession longer than other areas, accounted for more than half of the total losses, reflecting the rapid deterioration of the economy in recent months.

“None really escaped the sword here,” Joel Prakken, chairman of Macroeconomic Advisers, whose firm jointly developed the ADP report, said about the service sector.

Economists had expected 610,000 private-sector job cuts in February, according to the median of 23 forecasts in a Reuters poll.

The forecasts in the poll ranged widely from a drop of 730,000 to losses of 500,000.

Still, on Wall Street, stock futures held onto earlier gains. Government bonds, which generally benefit from weak economic data, extended their losses.

Full Story

Layoff Daily – See who is laying workers off and who is hiring.