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Only in America can you find high employment together with rank poverty

How much of that employment pays a wage that someone can afford to live on?

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The current employment statistics in America look pretty good, they say that we’ve basically reach full employment. That’s great, right? But the poverty statistics, and fates of various industries are not so sure about that.

One might expect that with high employment, there would be more economic activity, investments, more major purchases, like homes, more families, a natural population growth, etc. But that’s not what’s happening. The generation that is of child rearing age isn’t replacing itself the same way the previous generation did. They’re not buying homes the way their parents did. And numerous industries which sell products aimed at families and kids are feeling an economic pinch.

Before getting into the weeds about demographics and markets, let’s take a good look at our initial point of concern, and that’s the employment factor. While we might see a statistic that looks fantastic in its generality, we’re not seeing the benefits of such a reality because of the fact that what we’re not getting here is quality of that employment. How much of that employment is full time, how much of it pays a wage that someone can afford to live on? How much of it is part time? How much of it might actually be qualified as a sort of side-gig? How much of it matches the qualifications of its workers? The list goes on.

Frankly, the answer to these questions, and more, is that for a substantial number of people, it doesn’t do any of that, except provide some pocket change and take up time.

Jack Kelly over at Forbes gives a brief description of what the scenario entails:

The government and media have been reporting that the job market is remarkably tight. The unemployment rate is at 3.8%—a historic low. Economists contend that 5% unemployment is deemed full employment. This means that pretty much anyone who wants a job already has a job or could easily attain a job. The rationale is that it is anticipated that there will always be a given number of people out of work—not because the job market is soft, but rather due to miscellaneous reasons that leave a number of the population without a job. There is always going to be a certain number of people between jobs, but that does not fundamentally reflect the soundness and strength of the job market.

Since we are at 3.8%– which is lower than 5% (I’m pretty good at this math stuff), we should be celebrating. Sadly, I don’t believe the hype one bit.

We are not getting the full story. If we have better-than-full employment, the following things should happen:

  1. Wages of current workers should rise, as there is pressure to keep employees from being poached by rival corporations due to the shortage of workers. It’s “Economics 101” (my son just took this course as a college freshman, so I’m an expert on the matter). If qualified employees are scarce and in short supply, the cost (i.e. salary) should rise. But employee wages are stagnant and not increasing.
  2. Companies should be offering a premium to recruit workers since they are in short supply, but they’re not. Most firms are not offering attractively high offers to job seekers. This doesn’t make sense if there is full employment and a shortage of talent. If the job market was so tight, companies would be forced to offer higher starting salaries to people to entice them to join their company. However, this isn’t happening, so why would current candidates leave their current position for a new firm?
  3. If there is truly a shortage of candidates, companies would have to lower their standards and hire people without all the requisite qualifications. Because of this, they would offer the incoming candidates training to help them learn the job. However, this is not the case. In fact, if you look at job descriptions lately, the requirements listed are ridiculously long and the compensation is far less than the job calls for.

What I think is happening is that people are working, but we are not given the full truth.

  1. Millions of millennials are working at McJobs—jobs that are debasing and unfit for their $200k education. Yes, they may be working, but it is not the type of job they want nor does it measure up to their educational investment.
  2. Millions of people have dropped out of the job market and are not counted in the government data. If you stopped collecting unemployment checks, you simply disappear; the government doesn’t include you in their data. Therefore, even though you are looking for a job, you are unaccounted for. These unemployed folks have conveniently fallen through the cracks.
  3. Similarly, millions of people have simply given up hope. As a result of age discrimination and other perceived injustices, distressed job seekers throw up their hands in defeat and abandon their job searches entirely. Maybe they’ll settle for some part-time work or try to live off of their savings. Unfortunately, the outcome looks bleak for these folks.
  4. We have witnessed the ascendance of the “gig” economy— a “side hustle” or whatever sexy-sounding title you want to assign it. People are pushed into working short-term, going-nowhere contractual engagements. It is scrapping and clawing to constantly find consistent work.
  5. Also, the data doesn’t count a person who is working and just holding on by the skin of one’s teeth. They come to work each and every day worried about losing their jobs, having to relocate to a cheaper location or another country, being replaced by someone younger and less expensive or superseded by artificial intelligence.
  6. Baby boomers are desperately clinging onto whatever jobs they have. Without corporate pensions and having lost money in the financial crisis to reinvest into the bull stock market, they don’t have the money to retire.

The objective for this piece is to provide a more realistic perspective on the job market. Job seekers can become very depressed, disheartened and discouraged when they read the headlines about how great the job market is, while they themselves are either unemployed or underemployed. They feel alone in these circumstances, but, alas, they are not. I hope that, while I’m not offering you an answer today, at least you can have some comfort in knowing that it’s not just you, but rather a bigger trend that’s impacting millions of others just like you.

What America has here is a wage problem, and Trump is taking the long way, around the world, to solve it. Imagine if you’re in Ohio and you want to get to New York. Instead of heading East, you go West and circumnavigate the globe to get there. That’s exactly what Trump is doing by starting trade wars in the hopes of bringing jobs into America. But even if he is successful in motivating industries to open up in America, as it currently stands, the industry that is currently in America only pays its workers around $18,000 a year, with those workers still having to rely on food stamps for their survival. In the end, Trump is not solving for X, he’s simply moving it from one side of the equation to the other.

The wage problem would still have to be addressed. Trump is part of the baby boomer generation, and in their memory they remember manufacturing jobs being good paying jobs. In America’s time of greatness, post WW2, when America had this amazing prosperity, the average manufacturing laborer in Detroit was making the equivalent of $50/hr by today’s standards. But, at the same time, the average menial worker was on average earning $20/hr by today’s standards. What’s happened here is that the fruits of labor are no longer earned by the laborer, but end up in the hands of an investor class of shareholder, rendering today’s American economy to little more than usury.

There are two sorts of wealth-getting, as I have said; one is a part of household management, the other is retail trade: the former necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another. The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest. And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of an modes of getting wealth this is the most unnatural.
– Aristotle, Politics

While many may perceive that a living wage is economically infeasible, this is inconsistent with the mode of compensation and labor in that post WW2 period. If living wages were the death knell of a company, no company which operated at that time should have survived. But they are now some of the world’s largest and richest companies today. When America was ‘great’, Americans were earning a living wage as a minimum wage. The American president who took America through the Great Depression, when he instituted the minimum wage, expressed how he perceived it

“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country…. “Without question, [the minimum wage] starts us toward a better standard of living and increases purchasing power to buy the products of farm and factory.”

In the end, the problem of employment is not merely its quantity, or the quality, but also in its capacity to render compensation for labor rendered. Without tackling this issue, increasing the sheer number of jobs does not address the core problem of poverty or of jobs meeting the needs of the population.

It looks like Trump should take a few pointers from Russia’s Putin, who has brought Russia from an economic nightmare to being a world power. Putin knows that Russia can’t be great if its people are impoverished.

Some may believe that America is at a disadvantage and therefore cannot offer a living wage due to its trade deficit. But this is a mistake, because America does have an export: dollars. Thanks to Breton Woods, it exports dollars. This is what gives America its global hegemony. This is what makes America the richest country in the world.

America chooses to concentrate its wealth not at the ground level, but in an elite class of usurers. To change the fate of the American citizen, one does not need to bring about the end of the post WW2 era, but merely to usher in some updated policy changes.

 

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Robert Hilltibetan cowboyRodney AtkinsonTheRealDeplorableVoiceofReasonMagua1952 Recent comment authors
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Robert Hill
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Robert Hill

Those policy changes are some hot potatoes no ine wants to touch…. Im from Croatia and can see clearly that corporarions have destroyed USA… it will be hard to tear them down without some kind of revolution… some huge catalist is needed….. of epic magnitude to move people to take back their country… I dont rly seebit happening… I see it getting worse… the bad thing for DC is: most Americans are armed people….

tibetan cowboy
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tibetan cowboy

This is another rather worthless distracting article full of misinformation. The real unemployment rate is over 20%, the inflation rate is 10% and accelerating, and up to 50% of the civilians in the USA now live below the poverty line. Read these articles instead of this one: http://www.informationclearinghouse.info/49632.htm. https://www.commondreams.org/views/2017/10/16/yes-half-americans-are-or-near-poverty-heres-more-evidence. Wages in the 1960s in Elkhart, IN, my hometown when I was in high school, paid $15/ hr. and once in a job 6 mos. or so, hourly wages you were promoted to were $25/ hr., at NIBCO and probably 20+ other companies in Elkhart then. These were sub-contractors to the… Read more »

Rodney Atkinson
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Rodney Atkinson

Big business and the political left have promoted mass immigration. The former for profit the latter to destroy nation states. Labour supply up – wages down. Vitious circle ensues….low wages, higher debt, less investment, lower skills, lower wages etc etc etc

TheRealDeplorableVoiceofReason
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TheRealDeplorableVoiceofReason

Yet I have read recently about two major railroads offering over 20K per person for folks signing on. Places in the Dakotas where oil shale took off were $15-17 an hour to clerk at WalMart.

In rural North Dakota, 600 a week plus OT is a veritable fortune.

Magua1952
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Magua1952

I’m afraid Russia’s economy is not a good example to follow. The GDP is smaller than Texas.

Years of 4 and 5% growth will improve wages. It will take time to recover what was lost by the so called free traders and open borders fanatics.

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BREXIT chaos, as May’s cabinet crumbles (Video)

The Duran Quick Take: Episode 18.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at the various scenarios now facing a crumbling May government, as the Brexit Withdrawal Agreement is forcing cabinet members to resign in rapid succession. The weekend ahead is fraught with uncertainty for the UK and its position within, or outside, the European Union.

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If Theresa May’s ill-fated Brexit Withdrawal Agreement is eventually rejected this could trigger a vote of no confidence, snap elections or even a new referendum…

Here are six possible scenarios facing Theresa May and the UK (via The Guardian)

1 Parliament blocks Theresa May’s draft withdrawal agreement and political declarations

May faces an enormous task to win parliamentary approval, given that Labour, the SNP, the DUP and 51 Tories have said they will not vote for it.

If the remaining 27 EU member states sign off the draft agreement on 25 November, the government will have to win over MPs at a crucial vote in early December.

If May loses the vote, she has 21 days to put forward a new plan. If she wins, she is safe for now.

2 May withdraws the current draft agreement

The prime minister could decide that she will not get the draft agreement through parliament and could seek to renegotiate with the EU.

This would anger Tory backbenchers and Brussels and would be seen as a humiliation for her government. It might spark a leadership contest too.

3 Extend article 50

May could ask the European council to extend article 50, giving her more time to come up with a deal that could be passed by parliament – at present, the UK will leave on 29 March 2019.

Such a request would not necessarily be granted. Some EU governments are under pressure from populist parties to get the UK out of the EU as soon as possible.

4 Conservative MPs trigger a vote of no confidence in the prime minister

If Conservative MPs believe May is no longer fit for office, they could trigger a no-confidence vote.

Members of the European Research Group claim that Graham Brady, the chair of the powerful 1922 Committee, will receive the necessary 48 letters this week.

A vote could be held as soon as early next week. All Tory MPs would be asked to vote for or against their leader. If May wins, she cannot be challenged for at least 12 months. If she loses, there would be a leadership contest to decide who will become prime minister.

5 General election – three possible routes

If May fails to get support for the current deal, she could call a snap general election.

She would table a parliamentary vote for a general election that would have to be passed by two thirds of MPs. She would then set an election date, which could be by the end of January.

This is an unlikely option. May’s political credibility was severely damaged when she called a snap election in 2017, leading to the loss of the Conservative party’s majority.

Alternatively, a general election could be called if a simple majority of MPs vote that they have no confidence in the government. Seven Tory MPs, or all of the DUP MPs, would have to turn against the government for it to lose the vote, triggering a two-week cooling-off period. May would remain in office while MPs negotiate a new government.

Another route to a general election would be for the government to repeal or amend the Fixed-term Parliaments Act which creates a five-year period between general elections. A new act would have to be passed through both the Commons and the Lords – an unlikely scenario.

6 Second referendum

May could decide it is impossible to find a possible draft deal that will be approved by parliament and go for a people’s vote.

The meaningful vote could be amended to allow MPs to vote on whether the country holds a second referendum. It is unclear whether enough MPs would back a second referendum and May has ruled it out.

 

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Brexit Withdrawal Agreement may lead to Theresa May’s downfall (Video)

The Duran – News in Review – Episode 151.

Alex Christoforou

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The Brexit Withdrawal Agreement has been published and as many predicted, including Nigel Farage, the document is leading to the collapse of Theresa May’s government.

During an interview with iTV’s Piers Morgan, remain’s Alistair Campell and leave’s Nigel Farage, were calling May’s Brexit deal a complete disaster.

Via iTV

Alastair Campbell: “This doesn’t do remotely what was offered…what is the point”

“Parliament is at an impasse”

“We have to go back to the people” …”remain has to be on the ballot paper”

Nigel Farage:

“This is the worst deal in history. We are giving away in excess of 40B pounds in return for precisely nothing. Trapped still inside the European Union’s rulebook.

“Nothing has been achieved.”

“In any negotiation in life…the other side need to know that you are serious about walking away.”

“What monsieur Barnier knew from day one, is that at no point did Theresa May intend to walk away.”

“Fundamental matter of trust to the electors of our country and those who govern us.”

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss Theresa May’s Brexit Withdrawal Agreement, and why the deal is a full on victory for the European Union and a document of subjugation for the United Kingdom.

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Coming in at 585 pages, the draft agreement will be closely scrutinized over the coming days but here are some of the highlights as outlined by Zerohedge

  • UK and EU to use the best endeavours to supersede Ireland protocol by 2020
  • UK can request extension of the transition period any time before July 1st, 2020
  • EU, UK See Level-Playing Field Measures in Future Relationship
  • Transition period may be extended once up to date yet to be specified in the text
  • EU and UK shall establish single customs territory and Northern Ireland is in same customs territory as Great Britain

The future relationship document is less than seven pages long. It says the U.K. and EU are seeking a free-trade area with cooperation on customs and rules: “Comprehensive arrangements creating a free trade area combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition.”

The wording might raise concerns among Brexiters who don’t want regulatory cooperation and the measures on fair competition could amount to shackling the U.K. to EU rules.

As Bloomberg’s Emma Ross-Thomas writes, “There’s a clear sense in the documents that we’re heading for a customs union in all but name. Firstly via the Irish backstop, and then via the future relationship.”

Separately, a government summary of the draft agreement suggests role for parliament in deciding whether to extend the transition or to move in to the backstop.

But perhaps most importantly, regarding the controversial issue of the Irish border, the future relationship document says both sides aim to replace the so-called backstop – the thorniest issue in the negotiations – with a “subsequent agreement that establishes alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing.”

On this topic, recall that the U.K.’s fear was of being locked into the backstop arrangement indefinitely in the absence of a broader trade deal. The draft agreement includes a review process to try to give reassurance that the backstop would never be needed. Basically, the U.K. could choose to seek an extension to the transition period – where rules stay the same as they are currently – or opt to trigger the backstop conditions. In fact, as Bloomberg notes, the word “backstop,” which has been a sticking point over the Irish border for weeks, is mentioned only once in the text.

As Bloomberg further adds, the withdrawal agreement makes clear that the U.K. will remain in a single customs area with the EU until there’s a solution reached on the Irish border. It’s what Brexiteers hate, because it makes it more difficult for the U.K. to sign its own free-trade deals, which they regard as a key prize of Brexit.

Predictably, EU Commission President Juncker said decisive progress has been made in negotiations.

Meanwhile, as analysts comb over the documents, Jacob Rees-Mogg, chairman of the European Research Group, has already written to Conservative lawmakers urging them to vote against the deal. He says:

  • May is handing over money for “little or nothing in return”
  • The agreement treats Northern Ireland differently from the rest of the U.K.
  • It will “lock” the U.K. into a customs union with the EU
  • It breaks the Tory election manifesto of 2017

The full document…

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4 resignations and counting: May’s government ‘falling apart before our eyes’ over Brexit deal

The beginning of the end for Theresa May’s government.

The Duran

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Via RT


Four high profile resignations have followed on the heels of Theresa May’s announcement that her cabinet has settled on a Brexit deal, with Labour claiming that the Conservative government is at risk of completely dissolving.

Shailesh Vara, the Minister of State at the Northern Ireland Office was the first top official to resign after the prime minister announced that her cabinet had reached a draft EU withdrawal agreement.

An hour after his announcement, Brexit Secretary Dominic Raab – the man charged with negotiating and finalizing the deal – said he was stepping down, stating that the Brexit deal in its current form suffers from deep flaws. Esther McVey, Secretary of State for Work and Pensions, submitted her letter of resignation shortly afterwards. More resignations have followed.

Labour’s shadow Cabinet Office minister, Jon Trickett, predicted that this is the beginning of the end for May’s government.

The government is falling apart before our eyes as for a second time the Brexit secretary has refused to back the prime minister’s Brexit plan. This so-called deal has unraveled before our eyes

Shailesh Vara: UK to be stuck in ‘a half-way house with no time limit’

Kicking off Thursday’s string of resignations, Vara didn’t mince words when describing his reservations about the cabinet-stamped Brexit deal.

Theresa May’s EU withdrawal agreement leaves the UK in a “halfway house with no time limit on when we will finally become a sovereign nation,” his letter of resignation states. Vara went on to warn that the draft agreement leaves a number of critical issues undecided, predicting that it “will take years to conclude” a trade deal with the bloc.

“We will be locked in a customs arrangement indefinitely, bound by rules determined by the EU over which we have no say,” he added.

Dominic Raab: Deal can’t be ‘reconciled’ with promises made to public

Announcing his resignation on Thursday morning, Brexit Secretary Dominic Raab tweeted: “I cannot in good conscience support the terms proposed for our deal with the EU.”

Raab claimed that the deal in its current form gives the EU veto power over the UK’s ability to annul the deal.

No democratic nation has ever signed up to be bound by such an extensive regime.

Former Conservative Party leader Iain Duncan Smith said that Raab’s resignation as Brexit secretary is “devastating” for May.

“It sounds like he has been ignored,” he told the BBC.

Raab’s departure will undoubtedly encourage other Brexit supporters to question the deal, political commentators have observed.

Esther McVey: Deal ‘does not honor’ Brexit referendum

Work and Pensions Secretary Esther McVey didn’t hold back when issuing her own letter of resignation. According to McVey, the deal “does not honour” the result of the Brexit referendum, in which a majority of Brits voted to leave the European Union.

Suella Braverman: ‘Unable to sincerely support’ deal

Suella Braverman, a junior minister in Britain’s Brexit ministry, issued her resignation on Thursday, saying that she couldn’t stomach the deal.

“I now find myself unable to sincerely support the deal agreed yesterday by cabinet,” she said in a letter posted on Twitter.

Suella Braverman, MP Parliamentary Under Secretary of State for the Department for Exiting the EU © Global Look Press / Joel Goodman
Braverman said that the deal is not what the British people voted for, and threatened to tear the country apart.

“It prevents an unequivocal exit from a customs union with the EU,” she said.

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