andyetf

Posts Tagged ‘unemployment’

Record Corporate Profits Are Not Lowering Unemployment Rate

In Uncategorized on November 14, 2011 at 6:00 am

U.S. corporations are making record profits quarter after quarter, yet unemployment seems to be stuck at a devastatingly high rate. Why aren’t these financially flush big businesses hiring?

I’ve been writing a string of blogs about how tax debts are dealt with in bankruptcy, and I’ll get back to that after today. But this is the time of year when the nation’s major corporations report their 3rd quarter profits, and so I found myself scratching my head about the disconnect between their huge profits and their lack of hiring. So I read a number of news stories and editorials, and this is what I got out of them:

1.  Big businesses have gotten to be more “productive,” in the sense of producing more goods and services with less labor. That has happened partly through investments in labor-saving technology and partly by requiring employees to work harder and faster for the same pay. With the cut-throat labor market, companies don’t need to increase salaries to retain or replace their employees.

2.  Profits have increased because a larger percentage of sales for large U.S. corporations have been overseas. Around 40 per cent of their profits are from foreign sales. For many companies, sales are growing modestly in the U.S. while growing much faster elsewhere, especially in the “emerging markets” of China, India, and South America.

3.  Relatively strong overseas sales come with job growth overseas instead of here. According to the U.S. Commerce Department, in the past decade, U.S.-based multi-national corporations added 2.4 million jobs outside the country while cutting 2.4 million jobs here. Jobs naturally grow where sales are growing–someone has to take customer orders at the 3,000+ KFCs in China! But of course there’s also increased foreign outsourcing of work that used to be done here, from manufacturing to computer programming.

4. Normally when businesses are more productive, resulting in more profits, they tend to expand, thus creating more employment opportunities. But this has not been happening for three reasons.

a. With the double-whammy of very high unemployment and loss of home values, U.S. consumers either don’t have the means or the attitude to spend money, so companies are leery about expanding to increase production.

b. The international business environment—particularly the European sovereign debt crises in Greece, Italy and elsewhere—is making big business cautious.

c. Political gridlock in Washington, D.C. makes business planning very difficult. With the Congressional deficit-reduction “super committee” scheduled to issue its report very shortly, big businesses have been sitting tight to see if this “super committee” will come up with its momentous compromise, and what it’ll consist of.

The bottom line: big businesses don’t need to hire to produce the goods and services they are producing, at least within the U.S., and they don’t want to expand and hire here because of lackluster consumer demand and high uncertainty in the world economy and in domestic politics.

– Patrick J. Conway, attorney. http://www.patrickconwaylaw.com

Advertisements

Unemployment Should Be The Focus

In Uncategorized on June 16, 2011 at 1:44 pm

Consider the following statistics:

12 million – Number of people unemployed.
4 million- Number of people unemployed for one year or more.

30% – chance of someone unemployed for five weeks finding a job.
10% – chance of someone unemployed for twenty-seven weeks finding a job.

25% – increase in unemployed people from December 2009 to December 2010.
30% – people, including college graduates, unemployed for more than a year.

Shouldn’t politicians be focused on ways to reduce unemployment?

Jobless Rate Rises In January

In Uncategorized on March 11, 2011 at 11:00 am

Unemployment in Greater Cincinnati and Northern Kentucky climbed to 10% as of January 2011. January marks the twenty-third month with more than 100,000 people unemployed in the region. During the same period, more workers gave up looking and dropped out of the job market.

If you find yourself in financial difficulties because of a job loss, don’t blame yourself. A lot of people are in the same boat. Use the bankruptcy law to protect your assets and clear your credit report. Contact me for a free consultation.

The One-Sided Economic Recovery

In Uncategorized on February 11, 2011 at 10:38 am

US business as a whole has recovered from the rescession. Profits for US companies are up 12 per cent since 2007. That is much better than businesses in Canada, Japan and most of Europe.
Despite the increased profits, US businesses are not hiring. Jobs available to new employees are often part-time with no benefits.
This is the third economic recovery in twenty years with little job growth. Gallup poll shows US with higher unemployment than Britain, Germany, Japan, Russia, and China. Even if pace of job growth accelerates to record levels, we will not reach full employment until 2016.
So the recovery is one-sided. US business is on the rebound and doing better than ever. Unemployment for many remains on the horizon for years.

Bankruptcy Filings Up Nearly 14%

In Uncategorized on November 18, 2010 at 8:46 am

New bankruptcy cases increased 13.8% over the last year. This continues a trend that started several years ago. Since 2006, new bankruptcy case filings have increased. Expect the case filings to rise during the next year.

Its not difficult to understand why this is happening. High unemployment, foreclosure and credit card payment defaults also continue to go up. People need protection from creditors because their income doesn’t keep up with expenses.

The Long Slow Recovery

In Uncategorized on October 13, 2010 at 8:10 am

Recent economic news provided two important statistics. At the current rate of job creation, it will take nine years to get back the number of jobs lost during the recession. The unemployment numbers could get worse in the months ahead.

Median house prices have declined 20 percent since 2005. The outlook is that it will take thirteen years for housing to recover its value. That explains why so many people own houses worth less than their mortgages.

Commerical real estate vacancy rates are high. So high, it may take a decade for them to get back to where the rates were.

It looks like a long road to recovery.