The worst is yet to come: Unemployed Americans should hunker down for more job losses

[PocketProtector]

Mmmm Mmmm Mmmm

http://www.nydailynews.com/opinions/...re_job_lo.html


The worst is yet to come: Unemployed Americans should hunker down for more job losses

BY Nouriel Roubini

Sunday, November 15th 2009, 4:00 AM
Related News



Think the worst is over? Wrong. Conditions in the U.S. labor markets are awful and worsening. While the official unemployment rate is already 10.2% and another 200,000 jobs were lost in October, when you include discouraged workers and partially employed workers the figure is a whopping 17.5%.

While losing 200,000 jobs per month is better than the 700,000 jobs lost in January, current job losses still average more than the per month rate of 150,000 during the last recession.

Also, remember: The last recession ended in November 2001, but job losses continued for more than a year and half until June of 2003; ditto for the 1990-91 recession.

So we can expect that job losses will continue until the end of 2010 at the earliest. In other words, if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down. All the economic numbers suggest this will take a while. The jobs just are not coming back.

There's really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation.

The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.

This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs. Recent studies suggest that a quarter of U.S. jobs are fully out-sourceable over time to other countries.

Other measures tell the same ugly story: The average length of unemployment is at an all time high; the ratio of job applicants to vacancies is 6 to 1; initial claims are down but continued claims are very high and now millions of unemployed are resorting to the exceptional extended unemployment benefits programs and are staying in them longer.

Based on my best judgment, it is most likely that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more.

The weakness in labor markets and the sharp fall in labor income ensure a weak recovery of private consumption and an anemic recovery of the economy, and increases the risk of a double dip recession.

As a result of these terribly weak labor markets, we can expect weak recovery of consumption and economic growth; larger budget deficits; greater delinquencies in residential and commercial real estate and greater fall in home and commercial real estate prices; greater losses for banks and financial institutions on residential and commercial real estate mortgages, and in credit cards, auto loans and student loans and thus a greater rate of failures of banks; and greater protectionist pressures.

The damage will be extensive and severe unless bold policy action is undertaken now.

Roubini is professor of Economics at the Stern School of Business at New York University and Chairman of Roubini Global Economics.

Top economic prognosticator says job seekers

must face grim economic facts

[normanvin]

Sadly I know at least two people who are collecting. I have told the guy about a few opportunities I had heard about. His response was " Why should he get a job, he can still collect." As long as there are extentions these two have mo reason to get out and get a job.

[Guns4Fun]

Mmmm Mmmm Mmmm

http://www.nydailynews.com/opinions/...re_job_lo.html

SNIP

There's really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation.

I stopped reading at this point. If this clown thinks more .gov spending in shovel ready programs is the "one hope" he's an idiot.

[andrewjs18]

I do hope that everyone on here that is out of work does find something quickly..it sucks being out of a job.

[ProTool]

Truely. Not being able to support your family is one of the worst situations. Utilize that nifty site called google. Jobs are out there.

[ALS]

Here you go more on this jobless recovery.

If This Is Recovery...

[velkly]

I stopped reading at this point. If this clown thinks more .gov spending in shovel ready programs is the "one hope" he's an idiot.

I definitely stand with you on this one. These shovel ready jobs are window dressing on the problem and at best only provide very short term positions to make their numbers look pretty. They are _not_ a solution.

[dc dalton]

Don't know if you guys know exactly who this guy is but let me tell you when he talks you had BETTER listen. I have been reading Roubini's stuff for two years now, they call him "Dr. Doom" and for a good reason, when he comes out and says something negative about the economy he damn well knows what he is talking about.

He predicted ALL of the economic problems that happened last year and damn near nailed the dates within weeks of when they really happened. It was because of him we started hunkering down late 2007, we just didn't do enough 'hunkering' quick enough but had I not read his stuff I can guarantee you we would have lost everything.

[PocketProtector]

I definitely stand with you on this one. These shovel ready jobs are window dressing on the problem and at best only provide very short term positions to make their numbers look pretty. They are _not_ a solution.

Exactly..and all the tax credits are simply redistribution and temporary band aids. And I'm in RE and while it could help the RE sector, redistribution is repulsive to me. The entitlement mentality is seriously nauseating.

There is nothing, nil, nada, zilch that is being done to bring an economy back for the long term.

[pennsy]

Sadly I know at least two people who are collecting. I have told the guy about a few opportunities I had heard about. His response was " Why should he get a job, he can still collect." As long as there are extentions these two have mo reason to get out and get a job.

Can't believe you can now collect up to 10 months, why not take a year off until this blows over!