Chronic unemployment plagues the jobless

From the Wall Street Journal online:

"An emergency jobless-benefits program due to expire this weekend would pinch the finances of more than a million Americans..."

"Sheri Minkoff is among those who would lose benefits.

Ms. Minkoff, who is 50 years old and divorced, has been looking for work since being laid off from a Pittsburgh nonprofit group in January.

In the past year, Ms. Minkoff's résumés "hit brick walls," she said,

and she often later learned employers went with someone "about 
20 years younger, with a master's degree, who will take a much smaller salary."

The government benefit she receives "pays my rent, it pays the electric, and that's all," said Ms. Minkoff, who has a 20-year-old son...."

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Link: http://online.wsj.com/news/articles/SB10001424052702304483804579280902013763832?

CNN: things aren't always as good as they seem

From CNN online:

For many Americans, all the good news in the larger economy isn't translating over to everyday life.

Only 24% of the public believe economic conditions are improving, while nearly four-in-ten say the nation's economy is actually getting worse, according to a recent CNN poll. Meanwhile, the Consumer Confidence Index declined two months in a row.

The economy still feels depressing because for many people, it is, said Elise Gould, a labor economist at the liberal-leaning Economic Policy Institute.

"Those at the very top have bounced back, but we have not seen that for people at the middle or at the bottom," she said...

Sure, companies are flush with cash, but workers' wages are up only about 1% from a year ago, making it harder for average folks to make ends meet. Union-led strikes by fast-food workers are on the rise...

About 11 million Americans remain unemployed, and 37% of them have been out of a job for at least six months....

With the Fed's decision to begin pulling back on economic support for the economy, mortgage rates will likely continue to rise, making homes less affordable for average Joes.

So yes, there are positive signs in the economy that will hopefully continue.

But will 2014 be the economy's breakout year? Probably not, says Jim O'Sullivan, chief economist for High Frequency Economics.

"The word 'break-out' is too strong," he said. "We're four-and-a-half years into the recovery, and if we haven't got a V-shape recovery now, we're certainly not going to get one."

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Link:  http://money.cnn.com/2013/12/18/news/economy/economy-outlook/index.html?

"Just pick the good ones" -- Chinese investors are buying up Detroit

From Forbes Digital and MSN:

...Chinese shoppers can't resist a bargain.

Where else can you buy a two-story home in the U.S. for $39? China Central Television, the state broadcaster, in March reported that two houses in Detroit cost the same as a pair of leather shoes.

No wonder a poster on Sina Weibo, the Twitter-like service, pitched, "Seven-hundred thousand people, quiet, clean air, no pollution, democracy -- what are you waiting for?"

Who says the Chinese are waiting? Dongdu International Group of Shanghai bought, sight unseen, two downtown icons, the David Stott building for $4.2 million and the Detroit Free Press building for $9.4 million, both at auction this September.

Moreover, Chinese purchasers are making bulk purchases of inexpensive properties -- those selling for $25,000 or less -- in the rings surrounding the city center.

"They're banking on the downtown resurgence spiraling out into those rings," explains Kelly Sweeney of Coldwell Banker Weir Manuel. Mainland parties often buy at tax and foreclosure sales, hold their property and patiently wait for appreciation.

The Chinese certainly have made an impact on the locals in Detroit.

"I have people calling and saying, "I'm serious -- I wanna buy 100, 200 properties,'" said Caroline Chen, a real estate broker in nearby Troy, Michigan, to Quartz.com.

"They say 'We don't need to see them. Just pick the good ones.'" Chen reports that one of her colleagues sold 30 properties to a Chinese investor.

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Link: http://money.msn.com/investing/post--chinese-investors-are-buying-up-detroit

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Robin Hood policies hurt poor

From Nolan Finley at the Detroit News:

President Barack Obama has some bad news for poor and working class Americans: He’s going to spend the final three years of his presidency attacking the income gap.

“The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American dream, our way of life, and what we stand for around the globe,” the president said in a recent speech.

No coincidence the pledge to stamp out inequality comes at the same time Obama’s popularity and performance ratings are plunging due to the Obamacare fiasco. He always pivots to populism when he gets in trouble.

But this is no grand shift. Obama has been playing Robin Hood since Day One. All his major initiatives have been built on soaking the rich.

And what’s happened? Those on the bottom rungs of the economic ladder have less disposable income than they did when he took office, and the fat cats are fatter than ever...
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Link: http://www.detroitnews.com/article/20131215/OPINION01/312150003/1008/OPINION01/Robin-Hood-policies-hurt-poor

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Poverty nation: How America created a low-wage work swamp

From Joan Walsh at Salon.com:

2013 is the year many Americans discovered the crisis of the working poor. It turns out it’s also the crisis of the welfare poor.

That’s tough for us: Americans notoriously hate welfare, unless it’s called something else and/or benefits us personally. We think it’s for slackers and moochers and people who won’t pull their weight.

So we’re not sure how to handle the fact that a quarter of people who have jobs today make so little money that they also receive some form of public assistance, or welfare – a proportion that’s much higher in some of the fastest growing sectors of the workforce. Or that 60 percent of able-bodied adult food-stamp recipients are employed.

Fully 52 percent of fast-food workers’ families receive public assistance – most of it coming from Medicaid, food stamps and the Earned Income Tax Credit — to the tune of $7 billion annually, according to new research from the University of California-Berkeley’s Labor Center and the University of Illinois....
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Link: http://www.salon.com/2013/12/15/poverty_nation_how_america_created_a_low_wage_work_swamp/

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Economic Reality and the Minimum Wage

From Steve Chapman at Realclearpolitics.com:

If you offer people something that is too good to be true, you will always find takers.

Ask Bernie Madoff. Or ask Barack Obama. He recently proposed an increase in the minimum wage -- an idea that suits the natural predilections of many people enough to distract them from the unsentimental and unwelcome logic of economics.

One poll found that 63 percent of Americans favor raising the federal floor from the current $7.25 to $10.10, as the president recommends doing over two years.

The reasons are obvious. Wages have stagnated, low-income Americans are getting a smaller share of national income and many working people are stuck in poverty despite their best efforts.

A higher minimum wage is the obvious solution.

Obvious, but wrong.

The proposal rests on the assumption that the government can decree the price of a commodity -- in this case, labor -- in defiance of the dictates of the market, without ill effects. But that view requires a heroic suspension of disbelief.

When stores want to move slow-selling merchandise, they cut prices.

When customers clamor for more of an item than sellers can provide, they raise prices. Lower prices result in higher demand, and higher prices do the opposite.

This is not exotic free-market dogma but elementary economics. Any CEO who proposed to boost sales by jacking up prices would see the company's stock price plummet in response to this lunacy.

But supporters of a higher minimum wage would have us believe that low-wage workers are magically exempt from these phenomena. They claim companies will employ just as many employees at $10.10 an hour as they do at $7.25...
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Link: http://www.realclearpolitics.com/articles/2013/12/15/economic_reality_and_the_minimum_wage_120957.html

The Challenge Is Growth, Not Banal Inequality Cliches

From Larry Kudlow at RealClearMarkets.com:

Can anyone think of a more boring, banal, irrelevant, or stale speech than the one (President Obama) gave this Thursday in Washington D.C.?

The speech was allegedly on the economy, but more likely it was to divert attention from the Obamacare catastrophe.

Whatever the motive, his idea that the defining challenge of our time is to reduce income inequality is completely wrong.

In truth, the defining challenge is to restore more rapid economic growth, create substantially more jobs, and significantly reduce unemployment.

This is the worst recovery in the modern era going back to 1947.

But Obama is always more interested in income redistribution than growth.

He never speaks the language of growth, such as a rising tide would lift all boats. That's the basic economic truth of the remarkable prosperity of the '80s and '90s, a period during which tax, regulatory, trade, and monetary barriers were reduced, and the door opened to innovation, entrepreneurship, capital formation, and job creation.

Obama comes from a long line of liberals whose guiding star is the equality of result, i.e., income leveling, rather than the equality of opportunity, which is the heart of free-market capitalism....
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Link: http://www.realclearmarkets.com/articles/2013/12/06/the_challenge_is_growth_not_banal_inequality_cliches_100781.html

The long emergency for US workers continues

From AEI.com:

...here’s your trouble:

1. There are still 1.1 million fewer employed Americans today than right before the recession started, despite a potential labor force that’s 14 million larger. And there are 3.6 million fewer full-time workers than back in 2007.

2. The employment rate, the share of Americans with a job, is 58.6% — exactly where it was in November 2009.

3. If the labor force participation rate were where it was a year ago, the jobless rate would be 7.9%, not 7%.

4. More than 4 million Americans remain out of work for 27 weeks or longer.

5. Overall ... it will take another five years to return to 2007 employment levels even at the improved job creation pace of the past four months.
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Link: http://www.aei-ideas.org/2013/12/a-new-normal-november-jobs-report-the-long-emergency-for-us-workers-continues/

Obama's Recovery: Still 7.3 Million Jobs Below Average

From Investors.com: 

Now at 7%, the unemployment rate has fallen to the lowest level in five years...

but there's no cause for celebration...

The country is still 1.3 million jobs shy of its previous peak, set in January 2008. And that's to say nothing of the fact that the country has added 14 million to its working-age population since then.

Labor force participation remains at decades-long lows and the ranks of the long-term unemployed at historic highs.

This weak job market continues to depress wages.

In fact, median household income is 4.3% below where it was when the recovery started, and it moved sideways all year.

This picture won't get much better unless the economy can produce jobs — month after month — at a faster pace than it did in November, and at a much faster pace than since the Obama recovery began in June 2009.

In the 53 months since the recovery started, there have been only 16 where job growth exceeded 200,000. The average monthly growth over the past four years is just 158,000.

During the Reagan recovery, in contrast, monthly job growth averaged 244,000 (at a time when the U.S. had a much smaller population).

Indeed, had Obama's recovery been merely as good as the average recovery since World War II, there would be 7.3 million more people employed today...
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Link: http://news.investors.com/ibd-editorials/120613-682143-november-jobs-report-good-but-not-nearly-good-enough.htm

Payroll Gains in U.S. on Track for Best Year Since 2005

From Bloomberg.com:

Job growth in November was probably strong enough to keep payroll gains on track for the best year since 2005, economists said before a report today....

The unemployment rate dropped to 7.2 percent, matching an almost five-year low...

The pickup in employment over the last three months signals companies are confident that demand will improve and gives American workers the means to spend....
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Link: http://www.bloomberg.com/news/2013-12-06/payroll-gains-in-u-s-probably-on-track-for-best-year-since-2005.html