January, 2010
Government Ignores Rising Unemployment, Touts Accomplishment in Job Creation
David Yakobovitch
The global economic recession continues to plague the U.S. economy. Rising unemployment figures for America's part-time youth, middle-class families, and blue collar workers shows that the economic distress is worsening. According to the Wall Street Journal, unemployment of teenagers 16 to 19 hit 24% in June 2009, almost three times the national average (9.4%).
The soon to take effect minimum wage increase from $6.55 to $7.25 will continue to deter teenagers from receiving jobs, as the service industry greater sheds its workforce to minimizing operating expenses. Unemployment will not stabilize to its 5% pre-Recession level until an estimated first quarter of 2014, according to the Heritage Foundation, indicating a turbulent economy for years to come. Initial jobless claims filings jumped to 576,000 this week, up from 561,000 the previous week. Currently, 6,241,000 people are collecting unemployment benefits. Over 500,000 will lose their benefits in the next month, since benefits typically last 26 weeks.
Unemployment numbers are stark. Over 247,000 workers have lost their jobs in July alone. Over 2.5 million Americans have lost their jobs since the November presidential election, and more continue to be abandoned by the federal government. President Obama's administration has failed to improve economic conditions. Less than 10% of the government's $1.89 trillion has been spent, let alone on small businesses. Banks, the auto-industry, housing companies, and supporters of the government continue to receive bailouts as the average American suffers.
The economy will get worse. As new tax policies apply in 2010, businesses will continue to lay off employees for cost savings. Ironically, U.S. worker productivity surged in the second quarter at a 6.4% annualized rate, according to the Bureau of Labor Statistics. In an attempt to boost consumer confidence, Obama painstakingly is misusing government data and manipulating it for his administration's gains. An increase in worker productivity does not correlation the end of a recession! Less employees means more work on each person's shoulders, undoubtedly making worker productivity “surge” in the recession.
Our government needs to stop playing semantics games with American citizens. Data being released by the government is shined upon as beacons of hope for economists, yet many Americans never see the hard-core figures. Statistics are being released one day to drive up the stock market and retracted the next in a disclosed statement away from the masses. Where is the credibility in these statements?
Economic analysts again have attempted to manipulate the decrease of unemployment, associating it with a general economic recovery. Noting that the loss in Gross Domestic Product (GDP) has been lower than negative “estimates”, federal officials hope to boost the stock market over falsified and estimated figures. For the second quarter of 2009 (April through June) GDP has been adjusted to a 4.6% decline, an incredibly despairing number.
The decrease in unemployment from June to July hides the truth in the closet. Unemployment has and continues to worsen. An unemployed person is legally obligated to 6 months of paid leave by the federal government to cover expenses during the search of a new job, which does not exist right now. The government claims that less people are unemployed, which should increase consumer confidence and consumer spending. Yet look around at your friends, family, and loved-ones. Has your financial situation truly gotten better since October 2008?
Nine months after the economic recession has been realized, commercial and private lending remains frozen. Families continue to face swelling credit card debt. The economic recession drags on as strong as before. Recovery will not come until well into 2010.
Imagine millions of households declaring bankruptcy in 2009 and 2010 to erase credit card debt. Credit card default rates are up four-folds from last year, more than 1.6%. Bankruptcy is an easy and quick solution to erase debt, as long as you have emergency cash reserves. The reality is here and believe it or not, thousands of American households are truly considering it. Our economy is unstable, the national debt continues to increase, but average Americans continue to suffer. When will the unscrupulous spending end?
The global economy is built on credit, a system or borrowing money now, and paying later. But this credit has finally caught up with the American lifestyle. Trapped in the middle, Obama has failed to resolve the economic crisis, instead spending his time on moderating health care reform and climate change. My friends, be ready to pinch your pockets and tighten your belt, because this ride is picking up speed and going downhill.