The unemployment timebomb is quietly ticking – Telegraph
One often finds news of home that our own MSM is reluctant to report.
……the US lost 467,000 jobs in May, but also … time worked fell 6.9% from a year earlier, dropping to 33 hours a week. “At no time in the 1990 or 2001 recessions did we ever come close to seeing such a detonating jobs figure,” said David Rosenberg from Glukin Sheff. “We have lost a record nine million full-time jobs this cycle.”Earnings have fallen at a 1.6% annual rate over the last three months. Wage deflation is setting in – like Japan. (And like Japan we have been trying to buy our way out of a recession that is now a depression. BB) Interestingly, The International Labour Organization is worried enough to push for a global pact, fearing countries ( US and Europe) may set off a ruinous spiral by chipping away at wages try to gain beggar-thy-neighbor advantage.
Some of the US pay cuts are disguised. Over 238,000 state workers in California have been working two days less a month without pay since February. Variants of this are happening in 22 states.
The Centre for Labour Market Studies (CLMS) in Boston says US unemployment is now 18.2%, counting the old-fashioned way. The reason why this does not “feel” like the 1930s is that we tend to compress the chronology of the Depression. It takes time for people to deplete their savings and sink into destitution. Perhaps our greater cushion of wealth today will prevent another Grapes of Wrath, but 20 million US homeowners are already in negative equity (zillow.com data). Evictions are running at a terrifying pace.
Some 342,000 homes were foreclosed in April, pushing a small army of children into a network of charity shelters. This compares to 273,000 homes lost in the entire year of 1932. Sheriffs in Michigan and Illinois are quietly refusing to toss families on to the streets, like the non-compliance of Catholic police in the Slump.
Europe is a year or so behind, but catching up fast. Unemployment has reached 18.7% in Spain (37% for youths), and 16.3% in Latvia. Germany has delayed the cliff-edge effect by paying companies to keep furloughed workers through “Kurzarbeit”. Germany’s “Wise Men” fear that the jobless rate will jump from 3.7m to 5.1m by next year. The OECD expects unemployment to reach 57m in the rich countries by the end of next year.
What is so disturbing is that governments have not even begun the spending squeeze that must come to stop their countries spiraling into a debt compound trap.
Do be sure to read the comments as they are especially insightful.
And also keep one other thought in mind: hungry people are apt to get real mean real fast. Congress had better start listening to the people who are making themselves heard loud and clear in the Tea Party rallies. I am hoping congress will come back after the July 4th. break with a new perspective. BB
