Category Archives: Unemployment

New Zealand Uses Pandemic To Explore Four-Day Workweek

Source

http://www.zerohedge.com

As New Zealand’s economy adjusts to the COVID-19 pandemic, Prime Minister Jacinda Ardern has pitched a four-day workweek and other flexible working options, saying it will stimulate the economy, boost domestic tourism and encourage better work-life balance while the country’s borders remain closed to foreign nationals, according to The Guardian.

The pitch comes as the NZ economy is expected to contract up to 8% this year according to the IMF, while unemployment could hit 15% – 30%.

Ardern was sharing suggestions during a Facebook live session while she was in the tourist city of Rotorua – adding that New Zealanders would travel more within the island nation if they had more flexibility, helping the country’s collapsed tourism sector.

I hear lots of people suggesting we should have a four-day workweek. Ultimately that really sits between employers and employees. But as I’ve said there’s just so much we’ve learned about COVID and that flexibility of people working from home, the productivity that can be driven out of that,” said Ardern.

I’d really encourage people to think about that if you’re an employer and in a position to do so. To think about if that’s something that would work for your workplace because it certainly would help tourism all around the country.”

Andrew Barnes is the founder of Perpetual Guardian, a business of more than 200 people that transitioned to a four-day workweek in 2018.

Barnes found the shift made his employees happier and more productive and said the regime also had benefits for mental and physical health, the environment, family and social lives, and climate change.

New Zealand could definitely go to a four-day week in the aftermath of Covid, and in fact it would be a strategy to rebuild the economy and particularly the hard-hit tourism market as it pivots to a domestic focus,” Barnes said.

We need to retain all the productivity benefits working from home has brought, including cleaner air and a lack of gridlock lost productivity from commuting while helping businesses stay afloat. We have to be bold with our model. This is an opportunity for a massive reset.” –The Guardian

According to Barnes, a four-day workweek could be modeled after the German system of kurzarbeit, or “short work,” which would theoretically allow people to remain in their jobs.

“Finally, we have to factor in the need to address widespread mental health problems,” said Barnes. “The Kindness Institute reported a 25% uptick in use of its services during the lockdown, so we must understand that there has to be a focus on mental health in order to resurge economically. The 4 Day Week is a tool to protect the health of workers in every respect, making this model all the more relevant to the new world we find ourselves in.

Are We on the Verge of a Global Financial Collapse?

Coronavirus financial collapse Feature photo
COVID-19

 

As jobs disappear and our everyday lives are disrupted in the name of flattening the coronavirus curve, a picture of what tomorrow will look like is still too uncertain to make out, but all indications show that we are close to a breaking point.

It Is Much Worse Than You Are Being Told

theeconomiccollapseblog.com
May 10, 2020

For a long time I warned that our economic bubble would burst and that we would plunge into a nightmarish economic collapse.  Now it has happened, and it turns out that fear of COVID-19 was the “black swan event” that triggered the collapse.  The ironic thing is that COVID-19 is not even close to the worst thing that is going to happen to us.  But it was more than enough to topple our incredibly fragile economic system, and now tens of millions of Americans are deeply suffering.  On Friday, the April jobs report was released, and it was the worst jobs report in U.S. history by a very, very wide margin.  According to the official numbers, 20.5 million Americans lost their jobs during the month, and the unemployment rate shot up to 14.7 percent.  During the last recession, the unemployment rate peaked at about 10 percent, and we have already left that number in the dust.  The figures that we are seeing now are truly, truly horrifying, and what is even more frightening is that they aren’t even that accurate.

But don’t take my word for it.

On Friday, the U.S. Labor Department publicly admitted that the true unemployment rate in April was closer to 20 percent

Millions of U.S. residents were counted as employed in April despite having no job, suggesting April’s true unemployment rate was closer to 20%, much higher than the official 14.7% reported, the Labor Department said Friday.

The jobless rate should have included people on temporary unpaid leave, furloughed because of the coronavirus pandemic, the government said.

I applaud the Labor Department for trying to be honest.  In the report, they openly admitted that an “additional 7.5 million workers” should have been classified as unemployed

But responses to the survey by which the data was collected show 11.5 million people were categorized as employed but absent from work because of vacation, parental leave or other reasons, but including 8.1 million absent for “unspecified” reasons, a group that usually numbers about 620,000.

“One assumption might be that these additional 7.5 million workers …should have been classified as unemployed on temporary layoff,” a note attached to the government’s jobs report Friday said.

If those workers had been correctly classified, the official unemployment rate would have been about 19.5 percent, and that would have put us solidly in Great Depression territory.

But others have looked at the numbers and calculated that the true rate of unemployment should be even higher than that.

For example, Standard Chartered has calculated that the true rate of unemployment could be as high as 27.5 percent

While it is true that what the BLS reported that the April unemployment rate (UR) was less than expected (14.7% versus consensus of 16.0%) and the drop in payroll employment of 20.5 million was also less than the 22.0 million expected, Standard Chartered bank has calculated that adjustments to the headline unemployment rate push the effective number of unemployed to 42 million and the effective UR rate to 25.5%, higher even than the U-6 underemployment rate of 22.8%. Worse, if one treats underemployed in line with the U-6 methodology, the true April unemployment number would rise to an mindblowing 27.5%.

So how did Standard Chartered arrive at those numbers?  The following is how Zero Hedge explained it…

How does one get these numbers? As the bank’s chief FX strategist Steve Englander explains, start with the 23.1 million unemployed as published by BLS. To this add 8.1mn people who have dropped out of the labor force since February (previously the labor force had been growing steadily, so these are likely unemployed).

Add back 7.5MM workers classified as ‘employed but not at work for other reasons’ – BLS states that these workers are likely misclassified as employed, when they are in fact unemployed. Involuntary part-time work for economic reasons has gone up by 6.6MM and we treat these as half-unemployed (i.e., a contribution of 3.3MM).

This totals almost 42 Million effectively unemployed.

And Standard Chartered is not the only one that has come up with such a high figure.

In fact, John Williams of shadowstats.com says that if honest numbers were being used that the U.S. unemployment rate would now be an eye-popping 35.4 percent.

Wow.

Of course everyone admits that things are really, really bad and that the numbers for next month are likely to be even worse.

If you can believe it, even White House economic adviser Kevin Hassett is admitting that the official unemployment rate is likely to surge above 20 percent in “May or June”

White House economic adviser Kevin Hassett believes the unemployment rate could rise above 20% and the worst job losses would come in “May or June” because of the ongoing coronavirus pandemic.

When asked Sunday what the “bottom” of the country’s unemployment pain would be, Hassett, who advises the Trump administration on economic policy and is the former chair of the Council of Economic Advisers, told CBS’s “Face the Nation,” “to get unemployment rates like the ones that we’re about to see … which I think will climb up toward 20% by next month, you have to really go back to the Great Depression to see that.”

And even once this pandemic fades, many of those jobs won’t be coming back.

Initially, many employers had anticipated that they would be bringing all of their employees back following a short, severe crisis.  But at this point reality is beginning to set in for many of them.

For example, a restaurant owner in Kentucky named Britney Ruby Miller has had to lower her expectations as this pandemic has dragged on…

In late March, Britney Ruby Miller, co-owner of a small chain of steakhouse restaurants, confidently proclaimed that once the viral outbreak had subsided, her company planned to recall all its laid-off workers.

Now? Miller would be thrilled to restore, by year’s end, three-quarters of the roughly 600 workers her company had to let go.

Yes, the state of Kentucky is starting to “reopen for business”, but for now her restaurants will “be limited to 33% of capacity” and there will be all sorts of other new expenses that Miller will be forced to deal with…

Yet business won’t be returning to what it was before. In Kentucky, the restaurants will be limited to 33% of capacity. They are putting six feet between tables in all their restaurants, thereby limiting seating. Miller estimates that the company’s revenue will plunge by half to three-quarters this year.

And expenses are rising because the company must buy face masks and other equipment for the workers it does recall and restock its food, drink, and equipment supplies.

There are very, very few restaurants that can be profitable under such circumstances.

Unless the state of Kentucky lifts those ridiculous restrictions, Miller may soon lose all of her restaurants and all of her employees may soon be permanently out of jobs.

Of course more layoff announcements just keep rolling in from all over America with each passing day.  The following examples come from the Wall Street Journal

This past week, General Electric Co., Uber Technologies Inc. UBER 6.01% and Airbnb Inc. said they would lay off thousands of workers. MGM Resorts International MGM 4.42% warned that some of the 63,000 employees it has furloughed may be let go permanently starting in August. Aerospace supplier Raytheon Technologies Corp., RTX 2.91%  job-listings site Glassdoor and United Airlines Holdings Inc. UAL 11.74% also said in the past week that they had reduced jobs or planned to do so.

This is what an economic depression looks like, and it is going to be so incredibly painful.

And it is critical to understand that what we have experienced so far is just a warm-up act for the next chapters.

If you remember how bitter the last recession was, that should motivate you to take action to prepare for what is ahead, because this economic downturn is already even worse.

Yes, the months in front of us will be exceptionally challenging, but you can get through this.  Things may look really bleak, but for now you just need to keep hanging in there.

There will be life on the other side, but your future may end up looking far different than you originally anticipated.

 

 

 

Podcasts for the Pandemic 2, Let’s Hear it From Jessee Ventura on Yemen and the Virus

Jesse Ventura and Brigida Santos reveal why Saudi Arabia may finally end the war in Yemen. They also discuss what the U.S. government is doing to help millions of Americans survive the unprecedented economic crisis caused by COVID-19. Journalist Ben Swann joins the governor to talk more about the economy.

 

Reality of American capitalism exposed: Millions line up for food aid as pandemic spreads

“Capitalism is being exposed to a degree without precedent in modern history. Workers must draw the lessons. A system that funnels trillions to a handful of financial parasites while condemning millions to poverty and death must be swept aside.”

Source

http://www.wsws.org

April 13, 2020

“… in the eyes of the hungry there is a growing wrath. In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage.”—John Steinbeck, The Grapes of Wrath, April 1939

***

The rapid spread of the coronavirus in the United States is revealing the consequences of decades of ruling-class policy, which have left the center of world capitalism completely unprepared for a significant health care emergency. At the same time, the economic crisis brought on by the pandemic is exposing the reality of widespread poverty and insecurity.

During the Great Depression of the 1930s, breadlines became a symbol of social distress. Such scenes are reemerging in the form of massive line-ups for emergency food assistance in every state and community.

On Thursday, 6,000 cars lined up for five miles at a food bank drive-through in San Antonio, Texas. Some families arrived 12 hours early to ensure they received some aid. In Inglewood, California, south of Los Angeles, 5,000 cars lined up to receive food on Friday. Foodbank usage in Pittsburgh, Pennsylvania, has increased by 543 percent in recent days.

Boxes of food are distributed by the Greater Pittsburgh Community Food Bank, at a drive-thru distribution in downtown Pittsburgh, 10 April, 2020 [Credit: AP Photo/Gene J. Puskar]

Those who are lining up are not just the poorest workers, who typically rely on food banks in hard times, but also broader sections of the working class and middle- class families who have never had to rely on such aid in their lives.

“I’ve never had to go to a food pantry in my life,” Shanell Gray, a recently laid-off hotel worker, told the Columbus Dispatch at a food distribution in Ohio’s capital city this weekend. “This just went really fast. I was able to pay my rent for this month. May is the struggle.”

Nearly 17 million workers have filed for unemployment in the last three weeks, the highest number ever recorded. Even this figure, however, underestimates the scale of layoffs. Millions more are either ineligible for benefits or have been unable to apply due to overloaded websites and call centers.

The vast majority of the population has yet to receive any financial assistance. Just 10,000 people had received a direct deposit to their bank account as of Friday, and most states still have not established a means of sending out the $600 weekly increase in unemployment for four months.

While trillions have been handed over to the banks and gigantic corporations—with no requirement that they wait in lines—every obstacle is being put in place to prevent workers from getting anything and to cut off aid as soon as possible.

Labor Secretary Eugene Scalia, son of the late arch-reactionary Supreme Court Justice Antonin Scalia, has done everything in his power to limit payments, including by excluding gig workers who use phone apps to find work and making it easier for companies to avoid paying sick and family leave.

“We want workers to have work, not to become dependent on the unemployment system,” Scalia declared in an article posted last week on Fox Business News. The comments mirrored Trump’s outraged response to the fact that “we’re paying people not to go to work.”

The consequences will be catastrophic. According to one survey, nearly three-quarters of all workers live paycheck to paycheck. Almost three in 10 American adults have no savings. With so many hanging on by their fingernails before the pandemic, the often-individual experience that one missed paycheck spells personal disaster has become a mass phenomenon.

Already, one-third of Americans missed paying rent in the first week of April, a figure that is sure to be higher in May as millions deplete their savings accounts to get by without a paycheck. If they are not immediately being evicted, due to a patchwork of local and state level moratoriums, then millions will eventually be thrown into the streets because they cannot afford to pay back the rent they will owe when workplaces reopen.

If the promised stimulus money does arrive from the federal government, it will count for little. The one-time $1,200 payment will not cover the cost of rent in most cases, let alone food and other essentials. The stopgap measures included in the Coronavirus Aid, Relief, and Economic Security Act passed by Republicans and Democrats last month are woefully inadequate to meet social need.

While so many are hungry for food, the anarchy of the capitalist market has been exposed by the fact that farmers are destroying crops of staple foods as orders and prices fall. No measures have been taken to redistribute and process food for consumption even as stores struggle to keep up with demand for basic food items such as milk and eggs.

Instead eggs are smashed by the tens of thousands, countless tons of green beans mulched and plowed into fields, onions buried by the tens of thousands of pounds in trenches to rot. Five percent of the country’s milk supply has been dumped, and it could rise to ten percent with the continued closure of schools, restaurants and hotels.

The massive economic devastation that is unfolding will be exploited by the Trump administration to agitate for a return to work, creating conditions in which those who are unable to find work or refuse to endanger their lives are cut off from unemployment and other aid.

The working class, however, will have its say. Over the past several days, worried comments have begun to appear on the likelihood of mass social unrest.

Bloomberg editorial board member Andreas Kluth warned Saturday that the pandemic will lead to “social revolutions,” which the ruling elites must be prepared to confront.

Kluth explains that countless Americans simply do not have the option to stay home to avoid the coronavirus, putting them at risk of getting sick or infecting their families. He notes that the situation is even worse for the millions who live in slums in countries like South Africa and India, where social distancing is not an option, handwashing is impossible without running water and there are no emergency supplies of face masks.

“In this context, it would be naïve to think that, once this medical emergency is over, either individual countries or the world can carry on as before. Anger and bitterness will find new outlets… In time, these passions could become new populist or radical movements, intent on sweeping aside whatever ancien régime they define as the enemy.”

Capitalism is being exposed to a degree without precedent in modern history. Workers must draw the lessons. A system that funnels trillions to a handful of financial parasites while condemning millions to poverty and death must be swept aside.

Niles Niemuth