It’s All About The Economy, Stupid!

A LOOK BEHIND THE FACTS OF THE MATTER

While official stats suggest that the United States has the lowest unemployment rate in nearly a half century, the facts suggest otherwise.

FACT: Retaliers in 2019 throughout the nation are closing stores. They include:  Nordstrom 4 stores; Macy’s 4 stores; Target 6 stores; Kohl’s 8 stores; Lord & Taylor (America’s oldest department store company founded in 1826) 9 stores; Topshop 11 stores; Walmart 17 stores; J. Crew 20 stores; Southeastern Grocers (Winn-Dixie, Bi-Lo & Harveys) 22 stores; JC Penney 27 stores; Christopher & Banks closing 40 stores; Abercrombie & Fitch closing up to 40 stores; Francesca’s 40 stores; Bed Bath & Beyond 40 stores; Z-Gallerie 44 stores; The Children’s Place 45 stores; Party City 45 stores; CVS closing 46 stores; K Mart 48 stores; Lowes (see below) closing 51 stores;  Victoria Secret 53 stores; Office Depot 59 stores; Destination Maternity 67 stores; Sears 72 stores; Performance Bicycle 102 stores; Pier 1 Imports closing 145 stores; Signet Jewelry (Kay Jewelry, Jared The Gallery of Jewelry & Zales) closing 150 stores; Starbucks 150 stores; LifeWay Christian Stores 170 stores; Things Remembered 200 stores; Gap 230 stores; Chico’s (including White House Black Market & Soma) 250 stores; Charming Charlie 261 stores; Fred’s 312 stores; Shopko’s 363 stores; Family Dollar 390 stores; Charlotte Russe closing 512 stores; DressBarn 660 stores; Gymboree 800 stores and Payless ShoeSource closing 2,100 stores to name a few. This total, which is by no means complete comes to 7,613 stores that are or will be closed during 2019 alone. Store closings result in more job losses, all over the nation. Fox Business News proclaimed it was a Retail Apocalypse. It stated ‘The rise of e-commerce outlets like Amazon has made it harder for traditional retailers to attract customers to their stores and forced companies to change their sales strategies. Many companies have turned to sales promotions and increased digital efforts to lure shoppers while shutting down brick-and-mortar locations.’

FACT: Lowe’s is letting go of thousands of workers at roughly 1,800 U.S. stores. The company plans to outsource its maintenance and assembly jobs to third parties. The home-improvement retailer told CNBC that the shift is to allow store associates more time “serving customers.” Since Marvin Ellison took over as CEO in July 2018, Lowe’s has been closing stores to cut costs. According to a recent study, more than 7,000 U.S. store closures have been announced this year, with 12,000 expected by 2020. According to Anthony Cacciavillani, Senior Outside Sales Rep at NEFCO Corporation, “That’s very sad especially in this booming economy. It’s time for these large companies to be accountable to the large amount of people they hire . I remember when small hardware stores were closing due to Lowe’s and Home Depot massive stores, pricing and inventory, the hardware stores couldn’t keep up. Lowe’s and Home Depot can ruin the economy with these lay offs.

FACT: The automotive industry is closing plants and laying off people throughout North America. GM is laying off more than 14,000 workers and close three assembly plants and two component factories in North America by the end of 2019. ‘There’s nowhere to transfer. They’ve got nowhere to go. They’re just out of work,’ said Dave Green, a union leader near Youngstown where GM in early March plans to shut down its factory that makes the Chevrolet Cruze compact car. The dominoes already are starting to fall. A plant that makes seats for the Cruze and another business that does logistics and warehousing work for GM in Ohio have closed in March, too. Just three years ago, those two had a combined 800 workers. Green has compiled a list of more than 50 other businesses whose work is tied to the Ohio assembly plant. But it’s difficult to know how many will be forced to cut jobs because many do work for other auto plants and industries. Despite varying estimates, some economists project that for every auto plant job that is lost, three or four additional positions are eliminated. Research shows that auto plants, and manufacturing in general, create more spinoff jobs than other industries. Suppliers closest to factories that end up shutting down tend to be hit hardest because they’re usually more reliant on those plants than those farther removed with a broader customer base, said Albert J. Sumell, an economics professor at Youngstown State University. Workers at a parts plant in Whitby, Ontario, walked off the job in January to protest GM’s decision to shutter its Canadian plant while another nearby supplier plant announced it will be forced to close. Many of the parts that flow into the transmission plant near Baltimore come from other states, including South Carolina and Tennessee, and some are delivered from Mexico and Canada, said Guy White, a UAW shop chairman in Maryland.

“There’s all sorts of suppliers. It’s huge,” he said. “We get stuff from all over the world.” Other jobs that are directly tied to the plant are more likely to be in jeopardy, including those who supply its machines or sort parts, White said. Those who study the auto supply industry say it’s too early to know the full impact of GM’s transformation away from cars to focus on trucks, SUVs, and electric and autonomous vehicles.

Then there is the constant battle about closing the border with Mexico. The entire US auto industry would shut down within a week if Trump goes through with his pledge to close the US-Mexican border, according to a leading expert on the industry. That’s because every automaker operating an auto plant in the United States depends on parts imported from Mexico, said Kristin Dziczek, the vice president of industry, labor and economics at the Center for Automotive Research. About 37% of all auto parts imported to the United States originate in Mexico. Virtually all car models in America have Mexican parts, she said. Because of that reliance, she said the auto industry would stop producing vehicles relatively quickly. “You can’t sell cars with missing pieces,” she said. “You’ve got to have them all. I see the whole industry shutdown within a week of a border closing.”

FACT: The rising costs associated with maintaining a middle-class lifestyle are pushing American middle-class families further in debt, says The Wall Street Journal. In the past three decades, the median household income has risen 14% — while average house prices soared 290%. With wage growth failing to keep up with the rising costs of college, cars, medical care and housing, people are increasingly turning to financing where other generations might have bought outright, notes the Journal. According to Anthony Cacciavillani, Senior Outside Sales Rep at NEFCO Corporation, ‘Unemployment is low, but household debt continues to rise. Auto delinquencies are already at crisis levels. Any shift in unemployment will have exasperated consequences to credit quality. Be careful buying into the goldilocks economy. The 10 year is trading where it is for a reason. Fed Watchers are wishers.’

FACT: The U.S. will put an additional 10% tariff on the remaining $300 billion dollars of Chinese goods from Sept. 1, announced Trump —despite the two countries restarting trade talks in Shanghai this week which, according to the White House, have been “constructive.” Negotiations have been in limbo since May, when the U.S. accused China of backing out of provisions for a tentative deal. China responded earlier today that “while [it] did not want a trade war with the U.S.,” it would “have to take countermeasures” if a new levy was put into place, according to Reuters. Result: Dow dropped 280 points, giving up big earlier gain after Trump says US adding more tariffs on China.’ CNBC

FACT: The Real Unemployment Rate is vastly different than what the Government claims. The number doesn’t include the underemployed or the discouraged. The U-6 rate is a more encompassing unemployment rate that counts discouraged workers who aren’t currently looking for jobs as well as those holding jobs part time for economic reasons.

The U-6 rate, often called the “real” unemployment rate, was 7.3 percent in February.

The number of those employed part time for economic reasons was 4.3 million.

The U6 rate expands the range of the unemployed with three categories of individuals: underemployed, marginally attached or discouraged workers. Underemployed people are part-time workers who want full-time jobs. Marginally attached are those who have looked for work in the last year, but not during the previous four weeks. Discouraged workers are marginally attached people who have given up looking for work because they have gone back to school, are pregnant or became disabled. Based on their circumstances, they may or may not return to the labor force.

By including everyone on the fringes of the labor market, the U6 rate offers a broader perspective into the underutilization of the country’s workforce. For this reason, many economists consider U6 the “true unemployment rate.” In fact, Former Federal Reserve Chair Janet Yellen has said U6 paints a clearer picture of actual U.S. unemployment.

It’s important to revisit these categories and what they mean because for employers facing a shortage of qualified candidates, there may be large pockets of available workers tucked away among the underemployed, the marginally attached or discouraged workers who can fill open positions.

With three additional categories of unemployed people, U6 historically is about double the U3 rate. For example, in January 2019, the seasonally adjusted U3 rate was 4.0%, while U6 was 8.1%. But how does that translate into numbers of workers? According to BLS figures from February, U3 accounted for about 6.2 million unemployed workers (3.8%); U6 was 11.9 million workers (7.3%). The difference is approximately 5.7 million workers across the country. That’s a really big number of non-working unemployed people.

The underemployed and marginally attached represent an opportunity for employers to transition many of them to full-time work. But can they? Do they have the where-with-all and the foresight to fight against a potentially depressed economy looming on the horizon.

Then there are the older workers who have gone from good paying jobs to working two jobs to equal about 60% of their former pay. This underutilized, massively growing class leans heavily upon maximum credit and limited borrowing power, which places much of this society into a position of poverty. After the Great Recession ended, jobless older workers are the forgotten story of the economic recovery. U.S. employers are creating hundreds of thousands of new jobs every month, but millions of older workers who want a job cannot find work.

The jobless rate for workers over 55 was just 3.5%. But that figure is deceptive. If you add in workers holding part-time jobs who would rather be working full time, and unemployed workers who have recently given up on seeking work, the jobless rate for older workers last month was 8.7%, according to analysis of the government figures by the Schwartz Center for Economic Policy Analysis (SCEPA) at the New School.

Further, if you add jobless workers who gave up looking after more than four weeks, the 55-plus unemployment rate is a whopping 12%, SCEPA analysis shows. Looked at another way, 2.5 million older Americans want a job but do not have one.

The economic data documenting the problem is clear. So is one of the most important causes: age discrimination.

Age discrimination is illegal under the Age Discrimination in Employment Act of 1967. The law prohibits treating job applicants or employees who are over age 40 less favorably because of age. (The law applies to employers with 20 or more workers.) But most of the complaints filed with the U.S. Equal Employment Opportunity Commission focus on age-bias terminations rather than hiring—simply because hiring discrimination is so difficult to prove.

Yet two-thirds of older workers believe age discrimination occurs in the workplace, according to a 2013 survey by AARP. Older job seekers need much more time to find a job than older workers—36 weeks in 2015, compared with 26 weeks for younger workers, SCEPA data shows. A study by economists at the University of California at Irvine and Tulane University found strong evidence of age discrimination in hiring, particularly for older women. The researchers sent out 40,000 dummy job applications that included signals on the job-seekers’ ages, and then monitored the response rates. They measured callback rates for various occupations; workers age 49-51 applying for administrative positions had a callback rate 29% lower than younger workers, and it was 47% lower for workers over age 64.

According to Mark Miller and Reuters (090816), older American workers are still struggling to find jobs. Years after the Great Recession ended, jobless older workers are the forgotten story of the economic recovery. U.S. employers are creating hundreds of thousands of new jobs every month, but millions of older workers who want a job cannot find work.

Many companies discriminate in age by adding onto their employment forms, what year someone graduated from High School or College. This is age discrimination.

“Economists have been surprised by the increasingly weak relationship between wages and low unemployment,”. Indeed, in July, 29% of older full-time workers age 55-64 were in what Teresa Ghilarducci, a labor economist and SCEPA’s director calls “bad jobs.” That means they were earning less than two-thirds of the median wage for workers in that age range. She adds that when older displaced workers do find new jobs, they typically go back to work with about 75% of their former pay.

The American Dream for this group is now no longer reality, but now a myth of those who created it decades before.

The nation is on the brink of economic breakdown caused by a political Civil War with the head architect, an over privileged, disrespectful, bloated egotist who raves about civil disobedience and racial hatred. Hidden behind the facade of the rich, the stock market, this new leader of the Eastern World has created the largest debt in U.S. History, nearing $23 Trillion, representing a political party that was once famous for frugal, conservative economics. He has destroyed the very principles of what his Ripon party once cherished, along with party loyalists who stand beside him in deep, un-American fearful silence.

The 2020 Election is more than just a chance to voice one’s opinion. It may be your final chance to make sure that The American Dream lives…forward and beyond the next generation.

This entry was posted in 2020 Elections, Democratic Party, GOP, Political, Presidency of Donald Trump and tagged , . Bookmark the permalink.

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