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International News • Amazon received more money from UK grants than it paid in c
Amazon received more money from UK grants than it paid in corporation tax
Amazon is on a fresh collision course over its contribution to the UK exchequer, after the American internet giant revealed it received more money in government grants last year than it paid in corporation tax in Britain.
Amazon’s British subsidiary employed 4,191 people at the end of 2012, and thousands more via contracting agencies
By Katherine Rushton, US Business Editor6:14PM BST 15 May 2013
Amazon’s UK operation generated £4.2bn of sales last year, but it used a subsidiary in Luxembourg to help it reduce its corporation tax bill in the country to just £2.4m in 2012. According to documents filed at Companies House, the company received £2.5m in government handouts over the same period.
The figures have reignited controversy over the tax paid in Britain by American corporations, such as Amazon, Apple, Starbucks and Google, whose executives have been summoned to appear before the Public Accounts Committee on Thursday to clarify previous evidence they gave about their tax status.
Justin King, chief executive of Sainsbury, has complained the current UK tax laws do not create a “level playing field” for online retailers and their bricks and mortar rivals.
Amazon, like Google and Apple, consistently argue that they operate within the law, and make many other tax contributions to Britain, such as National Insurance payments.
But Margaret Hodge, chairman of the Public Accounts Committee, described Amazon’s tax contribution as “just a joke”.
Amazo
“What people will find particularly galling is that the amount Amazon is paying in tax is actually less than they are taking from UK taxpayers in the form of government grants. Companies like Amazon should pay their fair share of tax based on their economic activity in this country and the profits they make here.
“Its behaviour is not only unfair, it is anti-competitive, putting British businesses that do pay their proper tax at a disadvantage.”
An Amazon spokesman said: “Amazon pays all applicable taxes in every jurisdiction that it operates within. Like many companies, Amazon has received assistance in relation to major investments in the UK”.
The Seattle-based company would not say which investments the UK Government has helped with, but last year it opened a new distribution plant in Hemel Hempstead, creating 600 jobs, promising to open three more over the next two years.
It also took an eight-storey office in London to act as its global headquarters for “digital media development”. The site is one of the linchpins in TechCity, Prime Minister David Cameron’s project to redevelop the area around Shoreditch and Old Street as a hub for technology companies.
The Government is fearful that a severe crackdown on tax loopholes used by global companies could deter them from investing in Britain. Mr Cameron has called for a coordinated international effort to tighten tax legislation.
Amazon’s British subsidiary employed 4,191 people at the end of 2012, and thousands more via contracting agencies, but the company classed it as a service provider to its Amazon EU Sarl business in Luxembourg to reduce its tax bill. The UK business is funded by fees from Amazon EU Sarl, but these are only just enough to cover its operating costs, leaving little in the way of profits to be taxed.
http://www.telegraph.co.uk/finance/pers … n-tax.html
Statistics: Posted by yoda — Thu May 16, 2013 12:38 am
View full post on opinions.caduceusx.com
American • More Than 1 Million Baby Boomers Are Secretly Unemployed
More Than 1 Million Baby Boomers Are Secretly Unemployed
By Claire Gordon
Posted May 3rd 2013
The Bureau of Labor Statistics released its tabulation of the monthly unemployment rate, showing the jobless rate dipped to 7.5 percent in April. But that leaves out one major segment of the population: Those forced into retirement. While older Americans were less likely to lose their jobs in the recession, it’s well known that they were far less likely to find a new one if they did, in part, because of age discrimination. So some gave up and tapped their Social Security benefits — becoming retirees.
Early Retirees Were Kicked Out Of The Workforce
How many Americans are forced into retirement because they couldn’t find work? At the request of AOL Jobs, Matthew Rutledge, an economist at the Center for Retirement Research at Boston College, calculated that this group that remains invisible to the BLS. What he found: At the height of the recession, as many as 53,000 extra Americans were retiring early each month. In total, the recession has driven around 1.4 million additional Americans to collect Social Security early.
Why So Many?
No agency collects data on early or forced retirement. But Social Security does release how many people have started to claim benefits each month. Rutledge, a research economist, estimated how many people one would expect to be claiming benefits if there hadn’t been a recession, and then looked at the difference between the prediction and the reality. And that difference is stark.
More: Starting A Second Career At Age 60
Between June 2008 and June 2010, an average of 39,100 extra people claimed benefits each month than past trends predicted. In the 12-month period ending in November 2010, the average peaked at 53,192 monthly additional claims. (See the chart below.)
Financial Crisis Causes A Big Jump
The official unemployment rate in November 2010 was 9.8 percent. But in the previous two years, more than 1.05 million extra Americans had claimed Social Security. If these people were added to the unemployment rolls, the jobless rate that month would actually have been 10.4 percent — higher than at any point since 1983. It’s an especially stunning number, given that the trend for almost 20 years has been for people to retire later in life.
More: Retiring Postal Worker Deborah Ford: 44 Years, No Sick Days
But then, in 2011, the number of claims began to go down. In fact, in the 12-month period ending May 2012, an average of 4,000 fewer people claimed Social Security than expected each month. That isn’t because America’s older workers suddenly found lucrative employment, but because so many had claimed their benefits already.
"You’re someone who’s turning 64 in 2012, and you’ve looked at how long you’ve worked, and decided that’s when you want to claim," explained Rutledge. "And the recession happens, and you lose your job, or your stock portfolio goes in the tank, or your family really needs your help, your adult child moves back. So you decide you want to claim earlier."
A Sudden Slump
A person is eligible for full retirement benefits at 66 (if born between 1943 and 1954 — the retirement age is older the younger you are). But a person can claim as early as 62, if they’re willing to take a cut. By 2012, it seems that a lot of those 62-to-65-year-olds had already put themselves on the Social Security rolls, leading to a slump in the numbers. As Rutledge put it: "The elephant has been passed through the snake."
But the snake has left behind a stinking pile. In the summer of 2012, the number of claims once again rose above expectations, and has stayed elevated ever since. This may be because long-term unemployment remains so high. If a person turns 62 and has been without work for a year and a half, Social Security is probably a tempting proposition.
More: Is 48 Too Old To Be Working?
But still, there have been just 133,000 excess Social Security claims in the past two years, a far cry from the wrenching figures of winter 2010. If these are people who would otherwise be unemployed, it would hardly nudge the jobless rate at all. But it still adds up. Between March 2008 and March 2013, 1.4 million more Americans have opted for Social Security than expected.
A bad gamble for a healthy lady
Social Security claims are by no means a perfect way to judge who’s retiring early because they can’t find work. After all, people can start collecting Social Security benefits while still looking for work. Or they may retire and live off other funds before deciding to cash in on Social Security later on.
But multitudes of older Americans clearly did take advantage of Social Security before the official retirement age. And for many, that will come at a cost. Those who start collecting at age 62 see a 25 percent reduction in benefits. If you were to die at 70, that’s a pretty good deal, since you had an extra four years. But if you live into old age, that becomes a sizable cut.
"If you’re a healthy woman, you’re going to end up costing yourself a lot of money," explains Rutledge. "If you’re a man in poor health, it might actually make sense."
If you were laid off in the recession, even better. Research suggests that may have cut your life expectancy by as much as three years.
http://jobs.aol.com/articles/2013/05/03 … nemployed/
Statistics: Posted by yoda — Sat May 04, 2013 9:11 am
View full post on opinions.caduceusx.com
New poll: Young people don’t trust the government, Poll from 2010: Young people trusted government more than any other group.
What happened. Did young people tack on a few more IQ points over the past 3 years because they started eating organic? Or is it that they have seen what the Obama machine has done and the crony capitalist policies it has implemented?
A gleeful story from NPR on the 2010 poll.
The story on this week’s poll.
View full post on AgainstCronyCapitalism.org
Gold and Silver • Gold Bears Suddenly Appear, More Emboldened than Ever
Gold Bears Suddenly Appear, More Emboldened than Ever
Jordan Roy-Byrne, CMT | Apr 19, 2013
The Daily Gold Newsletter
Congrats to the gold bears and stock bulls! After being slaughtered for the majority of the last decade and more, they finally won a victory. Golf clap for you gentlemen. Now you can have your day in the sun once again. US stocks are at all-time highs and Gold sucks again! You won’t have to listen to your clients bitch and moan about how you ignored, avoided or were underweight the bull market of our time. Time to crow!
I awoke on Monday to a link from a subscriber. It was an editorial titled, “The Day that Gold Died.” The author cited the usual, clueless and baseless arguments both to why folks buy gold and why gold sucks as an investment. It is nothing more than a flimsy rant. He also cited a “marvelous takedown” by Barry Ritholtz, a formerly humble and generally impartial commentator who is now enjoying mainstream notoriety.
The worst and most natural, instinctive error these chaps and all gold haters make is to immediately refer to gold is an end of the world investment. This would be the most bizarre and ridiculous argument for gold. If the world ends, then how do you collect on it? If society breaks down for a period of time, then what good will Gold do for you, ahead of a farm?
Do central banks buy Gold because they think the end of the world is coming? If Gold is an “end of the world” investment, then why the hell do western central banks own the vast majority of their reserves in Gold? And why are emerging central banks buying Gold?
It’s because Gold is money and has been the only form of money to last for thousands of years. Not too long ago it was legally part of the monetary system. Since that change in 1971, the S&P 500 has advanced from 88 to 1541 while Gold has moved from $35/oz to $1395/oz (as I pen this). Even with the latest slide in Gold, it has still crushed the S&P 500 by rising 40-fold compared to just 17.5 fold for the S&P 500.
Gold’s tremendous increase in value (since its removal from the monetary system) over a long period of time shows its value as a speculation but more importantly, a currency. Though it fluctuates greatly during each cycle, over the very long-term it is the strongest reserve asset. This is why central banks buy it, hold it and accumulate it. It’s a no-brainer. Jim Grant put it best when he said gold is a hedge against monetary disorder.
Now let me get back to this supposed “marvelous takedown” from Ritholtz.
First he cites that the US$ is at a 3-year high and that Gold rallied when the buck fell from 2001-2007. First, let me note what few analysts know. When it comes to important market moves, Gold usually leads the US$. Does Ritholtz know that the US$ bottomed in late 1978 while Gold soon advanced 400% until its top in early 1980? Does he know that each of Gold’s recent major bottoms (2000, 2005, 2008) occurred before the US$ topped? The US$ is at the same level it was in late 2004 when Gold was trading below $500/oz. So should Gold be at that level? Surely, a strong US$ is a negative for Gold. However, history shows us that Gold is far more than an anti-dollar bet.
Secondly, as usual we hear this utter nonsense that Gold is a “trade”. It’s a greater fool trade as Ritholtz says. According to Ritholtz, gold trades differently than equities (citing history) because it has no fundamentals (i.e. no earnings, cash flow, etc.). What detractors of Gold should say is, because it produces nothing and is hard to value, it is never an investment and always a speculation.
Getting back to his point, can we check the charts of the last 10-15 years? Which one is a trade and which is in a bull market? There is a difference between a trade and a secular trend (i.e. a bull market). The bull market is in Gold while equities with their 15-year zigzag, clearly should have been traded back and forth.
Ritholtz totally bungles this argument. He cites history but fails to mention that Gold and equities trade inversely over long cycles. Equities were in a secular bear from 1966 to 1982 while gold stocks were in a bull from 1960 to 1980 and gold in a bull from 1969 to 1980. Then precious metals experienced a vicious bear market in the 1980s and 1990s while equities performed fantastically. Since 2000 stocks have been in a bear market and precious metals in a bull.
There is a reason for this long-term cyclicality. Stocks begin a bear market at times of major economic excess. Naturally, the economy corrects the excesses while at the same time, government increases its spending and the Fed cuts rates to soften the impact of long-term recessionary forces. Furthermore, real interest rates are typically negative to ensure more money comes out of cash and fixed income. Stocks struggle through these periods and hard assets (especially precious metals) perform well. Ultimately, the private sector is able to work through the problems and high commodity prices induce greater supply, which quells future inflation and results in an extended bear market.
This entire argument between stock bulls and gold bugs ultimately comes down to one thing. Has the secular tide shifted? Was this the major top in Gold on par with 1980?
Let’s compare some performance numbers. In the previous bull market, Gold gained about 25-fold. In this one, its gained nearly 7.5-fold. In the final 12 months of the previous bull market, Gold gained 282%. The 12 months before the 2011 peak, Gold gained about 55%. The last three years of each? It’s 577% (1977-1980) and 156% (2008-2011).
Gold corrected about 45% after its peak at the end of 1974. In the 13 months leading up to that peak, Gold gained 116% versus 59% for this bull market. In the 24 months leading up to that top Gold gained about 200% versus about 100% for this bull market.
In terms of the numbers, the most recent top in Gold comes nowhere close to the bubble peak of 1980 nor is it close to the peak in 1974 which was followed by a 45% downturn. Calling Gold a bubble just proves you don’t know what you’re talking about.
Furthermore, we’ve noted that the Barron’s Gold Mining Index, which was in a bull market from 1960 to 1980, experienced two substantial downturns of 61% (1968-1969) and 68% (1972-1974) before rising about 7-fold from 1976 to 1980. The HUI Gold Bugs Index declined about 71% in 2008 and as of yesterday was down about 60% since its 2011 peak.
History argues that equities will remain in a secular bear market. The three previous secular bear markets lasted 20, 13 and 16 years. The shortest commodity bull market, the last one, is 13 years long. It is highly unlikely that the commodity bull market ended in 2011 at 12 years old. The shortest bull market is not likely to be followed by an even shorter one. Furthermore, its highly unlikely the bear market in equities ended at 9 years when the others range from 13 to 20 years. Moreover, valuations at the 2009 bottom did not come close to where they were in 1921, 1942, 1946 or 1982.
Also, consider the Gold versus the S&P 500 ratio. It peaked in 1942 at 4.3 and in 1980 at 5.8. In 2011 it peaked at 1.7. Judging from history that was nowhere close to bubble territory.
Meanwhile, the macro backdrop remains extremely supportive of precious metals. Real interest rates are negative and will remain so for years as governments try to “QE” their way through the coming sovereign debt crisis. Do stock bulls honestly think governments will be able to continue to print money to buy their own bonds and stocks will go up 10% a year, there will be no inflation and commodities will decline? (Barry, isn’t this the recency effect you speak of?) This reminds me of the folk who denied the housing bubble or thought we weren’t in a recession in spring 2008. What happens when governments and central banks lose control of the bond markets and interest rates start rising? I’ll tell you what, they’ll print more and more to try to reverse it and rates will still go up.
This is why Kyle Bass and John Paulson aren’t selling. They made assloads of money betting against something that was inevitable and patiently waited. In the meantime, reporters and bloggers can poke fun at them saying the “trade” hasn’t worked or has gone wrong. These folks were never invested in precious metals to begin with and they either can’t see the world beyond a few days or fail to understand the bulletproof case for precious metals.
It’s true that many gold bugs deserve the recent ridicule. When you constantly promote wild conspiracy theories or blame manipulation for your large losses, you lose respect and credibility and you taint gold as an investment. It just makes us look worse.
The stock bulls and gold haters have won the battle but not the war. Sorry guys but your victory lap is premature. Next time you may want to do some real research before writing about Gold unless you just want to do a hit piece or take a victory lap. Precious metals are likely to strongly outperform stocks in the next three to four years. Both are nearing cyclical turning points. Once Gold goes parabolic, that is the signal to abandon ship and get back into stocks.
A sharp rally in the precious metals complex is days or hours away but look for a base building process to follow. Right now the complex is a strong buy. We’ve kept at least 40% cash over the past several months and have scaled in, albeit early. Now is the time to put money to work more aggressively than normal. If you’d be interested in professional guidance in uncovering the producers and explorers poised for big gains in the next few years then we invite you to learn more about our service.
Good Luck!
Jordan Roy-Byrne, CMT
http://thedailygold.com/gold-bears-sudd … than-ever/
Statistics: Posted by yoda — Fri Apr 19, 2013 3:09 pm
View full post on opinions.caduceusx.com
According to Washington Post Exposé, People Who Utilize Tax Havens Are Far More Honest than Politicians
Daniel J. Mitchell
Using data stolen from service providers in the Cook Islands and the British Virgin Islands, the Washington Post published a supposed exposé of Americans who do business in so-called tax havens.
Since I’m the self-appointed defender of low-tax jurisdictions in Washington, this caught my attention. Thomas Jefferson wasn’t joking when he warned that “eternal vigilance is the price of liberty.” I’m constantly fighting against anti-tax haven schemes that would undermine tax competition, financial privacy, and fiscal sovereignty.
Even if it means a bunch of international bureaucrats threaten to toss me in a Mexican jail or a Treasury Department official says I’m being disloyal to America. Or, in this case, if it simply means I’m debunking demagoguery.
The supposedly earth-shattering highlight of the article is that some Americans linked to offshore companies and trusts have run afoul of the legal system.
Among the 4,000 U.S. individuals listed in the records, at least 30 are American citizens accused in lawsuits or criminal cases of fraud, money laundering or other serious financial misconduct.
But the real revelation is that people in the offshore world must be unusually honest. Fewer than 1 percent of them have been named in a lawsuit, much less been involved with a criminal case.
This is just a wild guess, but I’m quite confident that you would find far more evidence of misbehavior if you took a random sample of 4,000 Americans from just about any cross-section of the population.
We know we would find a greater propensity for bad behavior if we examined 4,000 politicians. And I assume that would be true for journalists as well. And folks on Wall Street. And realtors. And plumbers. Perhaps even think tank employees. Anyhow, you get the point.
Citing a couple of anecdotes, the reporter then tries to imply that low-tax jurisdictions somehow lend themselves to criminal activity.
Fraud experts say offshore bank accounts and companies are vital to the operation of complex financial crimes. Allen Stanford, who ran a $7 billion Ponzi scheme, used a bank he controlled in Antigua. Bernard Madoff, who ran the largest Ponzi scheme in U.S. history, used a series of offshore “feeder funds” to fuel the growth of his multibillion-dollar house of cards.
The Allen Stanford case was a genuine black eye for the offshore world, but it’s absurd to link Madoff’s criminality to tax havens. The offshore funds that invested with Madoff were victimized in the same way that many onshore funds lost money.
Moreover, there’s no evidence in this article – or from any other source to my knowledge – suggesting that financial impropriety is more likely in low-tax jurisdictions.
We then get some “hard” numbers.
Today, there are between 50 and 60 offshore financial centers around the world holding untold billions of dollars at a time of historic U.S. deficits and forced budget cuts. Groups that monitor tax issues estimate that between $8 trillion and $32 trillion in private global wealth is parked offshore.
So we have offshore wealth of somewhere “between $8 trillion and $32 trillion”? With that level of precision, or lack thereof, perhaps you now understand why the make-believe numbers about alleged tax evasion are about as credible as a revenue estimate from the Joint Committee on Taxation.
Speaking of make-believe numbers, the article mentions one of Washington’s worst lawmakers, a Senator who pushed through a law that has united the world against the United States.
Sen. Carl M. Levin (D-Mich.) has been holding hearings and conducting investigations into the offshore world for nearly three decades. In 2010, Congress passed the Foreign Account Tax Compliance Act requiring that U.S. taxpayers report foreign assets to the government and foreign institutions alert the IRS when Americans open accounts.
He justifies bad policy by claiming that there’s a pot of gold at the end of the tax haven rainbow.
“We can’t afford to lose tens of billions of dollars a year to tax-avoidance schemes,” Levin said. “And many of these schemes involve the shift of U.S. corporate tax revenues earned here in the U.S. to offshore tax havens.”
But FATCA is predicted to collected less than $1 billion per year, and it probably will lose revenue once you include Laffer Curve effects such as lower investment in the American economy from overseas.
The most interesting part of the article, as least from a personal perspective, is that the Center for Freedom and Prosperity is listed as one of the “powerful lobbying interests” fighting to preserve tax competition.
The efforts by Levin and other lawmakers have been opposed by powerful lobbying interests, including the banking and accounting industries and a little-known nonprofit group called the Center for Freedom and Prosperity. CF&P was founded by Daniel J. Mitchell, a former Senate Finance Committee staffer who works as a tax expert for the Cato Institute, and Andrew Quinlan, who was a senior economic analyst for the Republican National Committee before helping start the center. …The center argues that unfettered access to offshore havens leads to lower taxes and more prosperity.
Having helped to start the organization, I wish CF&P was powerful. The Center has never had a budget of more than $250,000 per year, so it truly is a David vs. Goliath battle when we go up against bloated and over-funded bureaucracies such as the IRS and the Paris-based Organization for Economic Cooperation and Development.
The reporter somehow thinks it is big news that the Center has tried to raise money from the business community in low-tax jurisdictions.
According to records reviewed by The Post and ICIJ, the organization’s fundraising pleas have been circulated to offshore entities that make millions by providing anonymity for wealthy clients, many of them U.S. citizens.
Unfortunately, even though these offshore entities supposedly “make millions,” I’m embarrassed to say that CF&P has not been able to convince them that it makes sense to support an organization dedicated to protecting tax competition, financial privacy, and fiscal sovereignty.
But maybe that will change now that the OECD has launched a new attack on tax planning by multinational firms.
Let’s close by returning to the policy issue. The article quotes me defending the right of jurisdictions to determine their own fiscal affairs.
Mitchell, the co-founder of CF&P, added that nations shouldn’t be telling other countries how to conduct their affairs and noted that the United States is one of the worst offenders in the world when it comes to corporate secrecy.
My only gripe is that the reporter mischaracterizes my position. Yes, there are several states that are “tax havens” because of their efficient and confidential incorporation laws, but that means America is “one of the best providers,” not “one of the worst offenders.”
This is something to celebrate. I’m glad the United States is a safe haven for the oppressed people of the world. That’s great news for our economy. I just wish we also were a tax haven for American citizens.
“The United States is one of the biggest tax havens in the world,” Mitchell said. “In general, the United States is impervious to fishing expeditions here, and then the United States turns around and says, ‘Allow us to do fishing expeditions in your country.’”
But I’m not a hypocrite. Other nations should have the sovereign right to maintain pro-growth tax and privacy laws as well.
Other nations shouldn’t feel obliged to enforce bad American tax law, any more than we should feel obliged to enforce any of their bad laws.
P.S. You probably won’t be surprised to learn that “onshore” nations are much more susceptible to dirty money than “offshore” jurisdictions. Which is why you have a hard time finding any tax havens on this map showing the nations with the most money laundering.
P.P.S. On the topic of tax havens, you won’t be surprised to learn that Senator Levin is not the only dishonest demagogue in Washington. If you pay close attention around 1:25 and 2:25 of this video, you’ll see that the current resident of 1600 Pennsylvania Avenue also has an unfortunate tendency to play fast and loose with the truth.
View full post on Cato @ Liberty
American • More Than 101 Million Working Age Americans Have No Jobs
More Than 101 Million Working Age Americans Do Not Have A Job
By Michael, on April 7th, 2013
The jobs recovery is a complete and total myth. The percentage of the working age population in the United States that had a job in March 2013 was exactly the same as it was all the way back in March 2010. In addition, as you will see below, there are now more than 101 million working age Americans that do not have a job. But even though the employment level in the United States has consistently remained very low over the past three years, the Obama administration keeps telling us that unemployment is actually going down. In fact, they tell us that the unemployment rate has declined from a peak of 10.0% all the way down to 7.6%. And they tell us that in March the unemployment rate fell by 0.1% even though only 88,000 jobs were added to the U.S. economy. But it takes at least 125,000 new jobs a month just to keep up with population growth. So how in the world are they coming up with these numbers? Well, the reality is that the entire decline in the unemployment rate over the past three years can be accounted for by the reduction in size of the labor force. In other words, the Obama administration is getting unemployment to go down by pretending that millions upon millions of unemployed Americans simply do not want jobs anymore. We saw this once again in March. According to the U.S. Bureau of Labor Statistics, more than 600,000 Americans dropped out of the labor market during that month alone. That pushed the labor force participation rate down to 63.3%, which is the lowest it has been in more than 30 years. So please don’t believe the hype. The sad truth is that there has been no jobs recovery whatsoever.
If things were getting better, there would not be more than 101 million working age Americans without a job.
So exactly where does that statistic come from? Well, the following explains where I got that number…
According to the U.S. Bureau of Labor Statistics, there are 11,742,000 working age Americans that are officially unemployed.
In addition, the U.S. Bureau of Labor Statistics says that there are 89,967,000 working age Americans that are "not in the labor force". That is a new all-time record, and that number increased by a whopping 663,000 during the month of March alone.
When you add 11,742,000 working age Americans that are officially unemployed to the 89,967,000 working age Americans that are "not in the labor force", you come up with a grand total of 101,709,000 working age Americans that do not have a job.
When you stop and think about it, that is an absolutely staggering statistic.
And anyone that tells you that "a higher percentage of Americans are working today" is telling you a complete and total lie. During the last recession the percentage of working age Americans with a job fell dramatically, and since then we have not seen that number bounce back at all. In fact, this is the very first time in the post-World War II era that we have not seen the employment-population ratio bounce back after a recession. At this point, the employment-population ratio has been under 60 percent for 49 months in a row…
Since the end of 2009, the employment-population ratio has been remarkably steady. Just check out these numbers…
March 2008: 62.7 percent
March 2009: 59.9 percent
March 2010: 58.5 percent
March 2011: 58.4 percent
March 2012: 58.5 percent
March 2013: 58.5 percent
We should be thankful that the percentage of working age Americans with a job did not continue to decline, but we should also be quite alarmed that it has not bounced back at all.
If there was going to be a recovery, there would have been one by now. The next major economic downturn is rapidly approaching, and that is going to push the employment-population ratio down even farther.
So why is the U.S. economy not producing as many jobs as it used to? Well, certainly the overall decline of the economy has a lot to do with it. We are a nation that is drowning in debt and that is getting poorer by the day.
But since the end of the last recession, corporate profits have bounced back in a big way and are now at an all-time high. So you would figure that the big corporations should be able to hire a lot more workers by now.
Unfortunately, that is not the way things work anymore. Big corporations are trying to minimize the number of expensive American workers that they have on their payrolls as much as possible these days.
One way that they are doing this is through the use of technology. Thanks to robots, computers and other forms of technology, big corporations simply do not need as many human workers as they used to. In future years, this trend is only going to accelerate. I wrote about how this is changing the world of employment in one of my previous articles entitled "Rise Of The Droids: Will Robots Eventually Steal All Of Our Jobs?"
Another way that big corporations are replacing expensive American workers is by shipping their jobs off to the other side of the globe. Big corporations know that they can make bigger profits by making stuff in foreign countries where they can pay workers less than a dollar an hour with no benefits. How in the world are American workers supposed to compete with that?
For much more on how U.S. jobs are being killed by offshoring, please see this article: "55 Reasons Why You Should Buy Products That Are Made In America".
And of course immigration is having a dramatic impact on the labor market in some areas of the country as well. Cheap labor has dramatically driven down wages in a lot of professions. For example, once upon a time you could live a very nice middle class lifestyle as a roofer. But now many roofers really struggle to make a living.
When you add everything up, it paints a very bleak picture for the future of the American worker.
The cost of living keeps rising much faster than wages do, and the competition for good jobs has become incredibly fierce.
Meanwhile, the government continues to make things even easier for those that are not working. This has caused some Americans to give up completely and to be content with letting the government take care of them. The following is from a recent article by Monty Pelerin…
As we make it easier to get unemployment benefits for longer time periods, more people take advantage of the system. So too with food stamps and disability. All programs are at or near record levels in what is supposed to be four years into an economic recovery. For many, the benefits of becoming a government dependent exceed what they can earn. One study reported that a family of four, collecting all the benefits for which they were entitled, would have to earn $65,000 per annum to have the same after-tax purchasing power.
If you are a product of the government schools and are legal to work (i.e., have skills enough that you are affordable at the minimum wage or higher), at what point do you realize that there is no need to go through the hassle of actual work. You can live pretty well by staying home and taking advantage of the entitlements available to you. That is exactly what a larger and larger percentage of the population are realizing. In many cases, it is economically irrational to work.
This behavior creates a social pathology that only worsens over time. Kids learn from their parents that work is not necessary and the many ways to game the system. In this regard, look for this problem to become worse over time unless these programs are cut back.
In some areas of the country, it actually pays not to work very hard. According to Gary Alexander, the Secretary of Public Welfare for the state of Pennsylvania, a "single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045."
But the truth is that most Americans still want to work hard and would gladly take a good job if they could just find one. The following is one example that was featured in a recent Fox News article…
After a full year of fruitless job hunting, Natasha Baebler just gave up.
She’d already abandoned hope of getting work in her field, working with the disabled. But she couldn’t land anything else, either — not even a job interview at a telephone call center.
Until she feels confident enough to send out resumes again, she’ll get by on food stamps and disability checks from Social Security and live with her parents in St. Louis.
"I’m not proud of it," says Baebler, who is in her mid-30s and is blind. "The only way I’m able to sustain any semblance of self-preservation is to rely on government programs that I have no desire to be on."
And that is how most Americans feel.
Most Americans do not want to be dependent on the government.
Most Americans want to work hard and take care of themselves.
Unfortunately, our economy is not producing nearly enough jobs for everyone and it never will again.
So there will continue to be millions upon millions of Americans that find that they cannot take care of themselves and their families without government assistance no matter how hard they try.
And this is just the beginning – things are going to get much worse during the next major wave of the economic collapse.
Yes, at the moment there are more than 101 million working age Americans that do not have a job, but that number is actually going to go much higher in the years ahead. The anger and frustration caused by a lack of employment opportunities is going to shake this nation.
That is why it is important to try to become less dependent on your own job. In this economic environment, a job can disappear at literally any moment. Anything that you can do to become less dependent on the system would be a good thing.
http://theeconomiccollapseblog.com/arch … have-a-job
Statistics: Posted by yoda — Sun Apr 07, 2013 8:01 pm
View full post on opinions.caduceusx.com
More Than 101 Million Working Age Americans Do Not Have A Job
The jobs recovery is a complete and total myth. The percentage of the working age population in the United States that had a job in March 2013 was exactly the same as it was all the way back in March 2010. In addition, as you will see below, there are now more than 101 million working age Americans that do not have a job. But even though the employment level in the United States has consistently remained very low over the past three years, the Obama administration keeps telling us that unemployment is actually going down. In fact, they tell us that the unemployment rate has declined from a peak of 10.0% all the way down to 7.6%. And they tell us that in March the unemployment rate fell by 0.1% even though only 88,000 jobs were added to the U.S. economy. But it takes at least 125,000 new jobs a month just to keep up with population growth. So how in the world are they coming up with these numbers? Well, the reality is that the entire decline in the unemployment rate over the past three years can be accounted for by the reduction in size of the labor force. In other words, the Obama administration is getting unemployment to go down by pretending that millions upon millions of unemployed Americans simply do not want jobs anymore. We saw this once again in March. According to the U.S. Bureau of Labor Statistics, more than 600,000 Americans dropped out of the labor market during that month alone. That pushed the labor force participation rate down to 63.3%, which is the lowest it has been in more than 30 years. So please don’t believe the hype. The sad truth is that there has been no jobs recovery whatsoever.
If things were getting better, there would not be more than 101 million working age Americans without a job.
So exactly where does that statistic come from? Well, the following explains where I got that number…
According to the U.S. Bureau of Labor Statistics, there are 11,742,000 working age Americans that are officially unemployed.
In addition, the U.S. Bureau of Labor Statistics says that there are 89,967,000 working age Americans that are “not in the labor force”. That is a new all-time record, and that number increased by a whopping 663,000 during the month of March alone.
When you add 11,742,000 working age Americans that are officially unemployed to the 89,967,000 working age Americans that are “not in the labor force”, you come up with a grand total of 101,709,000 working age Americans that do not have a job.
When you stop and think about it, that is an absolutely staggering statistic.
And anyone that tells you that “a higher percentage of Americans are working today” is telling you a complete and total lie. During the last recession the percentage of working age Americans with a job fell dramatically, and since then we have not seen that number bounce back at all. In fact, this is the very first time in the post-World War II era that we have not seen the employment-population ratio bounce back after a recession. At this point, the employment-population ratio has been under 60 percent for 49 months in a row…
Since the end of 2009, the employment-population ratio has been remarkably steady. Just check out these numbers…
March 2008: 62.7 percent
March 2009: 59.9 percent
March 2010: 58.5 percent
March 2011: 58.4 percent
March 2012: 58.5 percent
March 2013: 58.5 percent
We should be thankful that the percentage of working age Americans with a job did not continue to decline, but we should also be quite alarmed that it has not bounced back at all.
If there was going to be a recovery, there would have been one by now. The next major economic downturn is rapidly approaching, and that is going to push the employment-population ratio down even farther.
So why is the U.S. economy not producing as many jobs as it used to? Well, certainly the overall decline of the economy has a lot to do with it. We are a nation that is drowning in debt and that is getting poorer by the day.
But since the end of the last recession, corporate profits have bounced back in a big way and are now at an all-time high. So you would figure that the big corporations should be able to hire a lot more workers by now.
Unfortunately, that is not the way things work anymore. Big corporations are trying to minimize the number of expensive American workers that they have on their payrolls as much as possible these days.
One way that they are doing this is through the use of technology. Thanks to robots, computers and other forms of technology, big corporations simply do not need as many human workers as they used to. In future years, this trend is only going to accelerate. I wrote about how this is changing the world of employment in one of my previous articles entitled “Rise Of The Droids: Will Robots Eventually Steal All Of Our Jobs?“
Another way that big corporations are replacing expensive American workers is by shipping their jobs off to the other side of the globe. Big corporations know that they can make bigger profits by making stuff in foreign countries where they can pay workers less than a dollar an hour with no benefits. How in the world are American workers supposed to compete with that?
For much more on how U.S. jobs are being killed by offshoring, please see this article: “55 Reasons Why You Should Buy Products That Are Made In America“.
And of course immigration is having a dramatic impact on the labor market in some areas of the country as well. Cheap labor has dramatically driven down wages in a lot of professions. For example, once upon a time you could live a very nice middle class lifestyle as a roofer. But now many roofers really struggle to make a living.
When you add everything up, it paints a very bleak picture for the future of the American worker.
The cost of living keeps rising much faster than wages do, and the competition for good jobs has become incredibly fierce.
Meanwhile, the government continues to make things even easier for those that are not working. This has caused some Americans to give up completely and to be content with letting the government take care of them. The following is from a recent article by Monty Pelerin…
As we make it easier to get unemployment benefits for longer time periods, more people take advantage of the system. So too with food stamps and disability. All programs are at or near record levels in what is supposed to be four years into an economic recovery. For many, the benefits of becoming a government dependent exceed what they can earn. One study reported that a family of four, collecting all the benefits for which they were entitled, would have to earn $65,000 per annum to have the same after-tax purchasing power.
If you are a product of the government schools and are legal to work (i.e., have skills enough that you are affordable at the minimum wage or higher), at what point do you realize that there is no need to go through the hassle of actual work. You can live pretty well by staying home and taking advantage of the entitlements available to you. That is exactly what a larger and larger percentage of the population are realizing. In many cases, it is economically irrational to work.
This behavior creates a social pathology that only worsens over time. Kids learn from their parents that work is not necessary and the many ways to game the system. In this regard, look for this problem to become worse over time unless these programs are cut back.
In some areas of the country, it actually pays not to work very hard. According to Gary Alexander, the Secretary of Public Welfare for the state of Pennsylvania, a “single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045.”
But the truth is that most Americans still want to work hard and would gladly take a good job if they could just find one. The following is one example that was featured in a recent Fox News article…
After a full year of fruitless job hunting, Natasha Baebler just gave up.
She’d already abandoned hope of getting work in her field, working with the disabled. But she couldn’t land anything else, either — not even a job interview at a telephone call center.
Until she feels confident enough to send out resumes again, she’ll get by on food stamps and disability checks from Social Security and live with her parents in St. Louis.
“I’m not proud of it,” says Baebler, who is in her mid-30s and is blind. “The only way I’m able to sustain any semblance of self-preservation is to rely on government programs that I have no desire to be on.”
And that is how most Americans feel.
Most Americans do not want to be dependent on the government.
Most Americans want to work hard and take care of themselves.
Unfortunately, our economy is not producing nearly enough jobs for everyone and it never will again.
So there will continue to be millions upon millions of Americans that find that they cannot take care of themselves and their families without government assistance no matter how hard they try.
And this is just the beginning – things are going to get much worse during the next major wave of the economic collapse.
Yes, at the moment there are more than 101 million working age Americans that do not have a job, but that number is actually going to go much higher in the years ahead. The anger and frustration caused by a lack of employment opportunities is going to shake this nation.
That is why it is important to try to become less dependent on your own job. In this economic environment, a job can disappear at literally any moment. Anything that you can do to become less dependent on the system would be a good thing.
View full post on The Economic Collapse
American • The Labor Market Is in Worse Shape Than You Think
The Labor Market Is in Worse Shape Than You Think
By Morgan Korn | Daily Ticker
The ADP National Employment Report revealed Wednesday that private employers hired 158,000 workers in March — the smallest gain in five months and below economists’ forecasts of around 200,000.
Many of these new jobs are in low-paying sectors such as retail, food services and health care. The Bureau of Labor Statistics (BLS) reported in February that retailers hired 252,000 new workers over the past 12 months and the industry overall has recovered 723,000 jobs since reaching a low in December 2009. In comparison, the construction industry has added just 349,000 new jobs since reaching its employment low in January 2011.
The U.S. economy overall has increased payrolls by 355,000 since the beginning of the year and more than 1.8 million in 2012. This Friday the BLS will give its latest snapshot of the domestic labor market. Economists are expecting an average gain of 200,000 jobs in March.
Thirty consecutive months of job growth has helped the U.S. economy recover from its darkest days in 2009, but the national unemployment rate still remains high at 7.7%. According to Robin Harding, U.S. economics editor at the Financial Times, the U.S. has shed nearly two million clerical jobs since 2007 while creating just 387,000 managerial positions, setting up a polarization in the labor market.
“We’re seeing this ongoing structural change as well as a cyclical change” in the economy, Harding says. “Someone finding a job in this economy may not be finding the kind of job they’d like to.”
Harding says the shift to low-wage jobs from “good, middle-class” jobs such as construction workers, bookkeepers, typists, bank tellers and data entry employees, has led to growing income inequality. These positions have been replaced by modern IT systems that companies are using to cut costs and increase their bottom lines.
“Companies are finding ways to automate these office processes,” Harding says, and this leads “to a lot fewer of the steady office jobs that the middle class has been relying on since the second world war.”
Harding analyzed salaries for fast-growing occupations over the past year. He found that the average wage for a clerical job in 2012 was $34,410. But the positions that are being created in this economy – like a personal care aid – paid on average of $24,550.
This downward trend in salary does not apply to every industry, Harding notes. Computer programmers, for example, can command high salaries because that industry faces a shortage of qualified workers. Policy makers in Washington have been trying for decades to stem the losses of living wage middle-class jobs, Harding says, but improvements in education and job training require a lot of investment – which the government may not be inclined to pursue these days.
http://finance.yahoo.com/blogs/daily-ti … 3Q-;_ylv=3
Statistics: Posted by yoda — Wed Apr 03, 2013 1:20 pm
View full post on opinions.caduceusx.com
Roy: “The Arkansas-Obamacare Medicaid Deal: Far Less Than It First Appeared”
Michael F. Cannon
At Forbes.com’s Apothecary blog, the Manhattan Institute’s Avik Roy is cool to the idea of states implementing ObamaCare’s Medicaid expansion by putting those new enrollees in ObamaCare’s health insurance “exchanges”:
When Arkansas Gov. Mike Beebe (D.) first announced that he had reached a deal with the Obama administration to use the Affordable Care Act’s private insurance exchanges to expand coverage to poor Arkansans, it seemed like an important, and potentially transformative, development. The myriad ways in which the traditional Medicaid program harms the poor have been well-documented, and it looked like Beebe had come up with an attractive—albeit expensive—way to provide the poor with higher-quality private insurance. A Good Friday memo from the U.S. Department of Health and Human Services, however, splashes cold water on that aspiration. It’s now clear that the Beebe-HHS deal applies a kind of private-sector window dressing on the dysfunctional Medicaid program, and it’s not obvious that the Arkansas legislature should go along.
The first reason states should not pursue the Beebe plan is that, like a straight Medicaid expansion, it would inhibit the pursuit of low-cost health care for the poor.
The second reason is that it would cost even more than putting those new enrollees in the traditional Medicaid program. Economist Jagadeesh Gokhale, who advises the Social Security program on how to make these sorts of projections, estimates a straight Medicaid expansion would cost Florida, Illinois, and Texas about $20 billion in the first 10 years. And that’s in the wildly unrealistic event that the feds honor their committment to cover 90 percent of the cost. President Obama has already proposed abandoning that committment. Congressional Budget Office projections suggest the “Beebe plan” would increase the cost of the expansion by 50 percent. That too should be enough reason to reject the Beebe plan. Neither the state nor the federal government have the money to expand Medicaid at all. Volunteering to make the expansion even more expensive is lunacy.
The Beebe administration is trying to make its plan seem no more expensive than a straight Medicaid expansion. How? By simply assuming state officials would voluntarily make a straight Medicaid expansion so expensive that the Beebe plan wouldn’t cost a penny extra. The illogic goes like this. If Arkansas were to expand traditional Medicaid, the state would likely need to increase Medicaid payments to doctors and hospitals in order to secure adequate access to care for new enrollees. That would make a straight Medicaid expansion so expensive that the Beebe plan would be no more costly, and might even cost less.
It’s true, states that implement ObamaCare’s Medicaid expansion would have to increase provider payments to give new eligibles decent access to care. The problem is that Medicaid never does that. Medicaid is notorious for paying providers so little that it access to care is lousy. Medicaid does so year after year, even if people sometimes die as a result. The Beebe administration simply assumed that state officials would magically change such behavior, increase Medicaid’s provider payments to the same levels private insurers pay, and thereby volunteer to make an already-expensive Medicaid expansion even more unaffordable. In that fantasy world, the Beebe plan would be no more expensive. As an indication of how implausible that assumption is, no one had been talking about combining a straight Medicaid expansion with higher provider payments until the Beebe administration needed to make the governor’s plan seem slightly less unaffordable.
Roy has soured on Beebe-style plans since reading some of the terms and conditions the Obama administration issued on Friday. Yet he still imagines there might be free-market-friendly ways to implement a massive expansion of the entitlement state. Thus he counsels states only to expand Medicaid in exchange for real reforms. We’ve heard that song and dance before. Republicans said the State Children’s Health Insurance Program and Medicare Part D – two Republican initiatives – would lead to Medicaid and Medicare reform. Instead, government got bigger and reform went nowhere. Lucy is going to pull the football here, too. If it is Medicaid reform you seek, the only free-market Medicaid reforms are Medicaid cuts. Roy’s criticisms of the Beebe plan are welcome, though it’s odd to find him to the left of officials in the 15 or more states that are flatly rejecting the expansion.
View full post on Cato @ Liberty
California’s ObamaCare Exchange Costs 56 Times More to Launch than Facebook
Michael F. Cannon
Robert Laszewski notes that launching California’s ObamaCare “Exchange” is so far costing taxpayers 56 times as much as it cost to launch Facebook, while its marketing budget is 8 times what Sen. Barbara Boxer (D-CA) spent on her reelection bid (adjusted for inflation):
So far California has received $910 million in federal grants to launch its new health insurance exchange under the Affordable Care Act (“Obamacare”).
The California exchange, “Covered California,” has so far awarded a $183 million contract to Accenture to build the website, enrollment, and eligibility system and another $174 million to operate the exchange for four years.
The state will also spend $250 million on a two-year marketing campaign. By comparison California Senator Barbara Boxer spent $28 million on her 2010 statewide reelection campaign while her challenger spent another $22 million…
Privately funded Esurance began its multi-product national web business in 1998 with an initial $5.5 million round of venture fund investment in 1999 and a second round of $34 million a few months later.
The start-up experience of other major web companies is also instructive. Facebook received $13.7 million to launch in 2005. eBay was founded in 1995 and received its first venture money in 1997––$6.7 million in 1997.
Even doubling these investments for inflation still leaves quite a gap.
The California Exchange officials also say they need 20,000 part time enrollers to get everybody signed up––paying them $58 for each application. Having that many people out in the market creates quality control issues particularly when these people will be handling personal information like address, birth date, and social security number. California Blue Shield, by comparison has 5,000 employees serving 3.5 million members.
New York is off to a similar start. New York has received two grants totaling $340 millionagain just to set up an enrollment and eligibility process.
I thought it was notable that the Obama Administration has issued grants totaling $174 million to a non-profit group––Freelancers––for the purpose of setting up a new full service health plan in New York under the Affordable Care Act’s health insurance co-op program.
So, the Obama administration thinks it costs $174 million to set up a full service health insurance company in New York (including the significant cost of premium reserves) compared to $340 million to set up just a statewide insurance exchange to do eligibility and enrollment?
As many as 17 states are going to be setting up their own health insurance exchanges under the new law and the feds have so far released $3.4 billion to the states to build them. Little Vermont has received $124 million so far, Kentucky $253 million, and Oregon $242 million, for example. I wonder what the per person cost of exchange enrollment in Vermont will be?
View full post on Cato @ Liberty