Dear Boss Man, Please Give My Dad A Job ...

A real-life example of one of my recent post comes from Oregon, where 12-year-old Cheyenne Hess, worried after her father lost his job in December and had only been able to pick up sporadic day work, penned a letter to the supervisor there, asking him to hire her father full-time:

“Dear Ed Reed:

“Please give my Dad a job at Oregon Motorcoach. He has been out of a job since December 2008 and he deserves this job and you deserve such a great painter, he has a great painting skill. He has painted cars, coaches and he always has a good attitude about what he has to do. He has always been a good Dad, painter and lovely husband and friend. If you hire him you would be getting a good deal and a lot of new customers for life. My Dad has never been rude to anyone so you won’t have to worry about having meetings with him. So please, please, please hire him. He always has great ideas at meetings and never needs an assistant.

“Sincerely, Cheyenne Hess”
To read the entire article - including how the story turns out - click here.

If you haven't lost your job, has your boss cut your pay? Taken away overtime? Reduced your workweek? Eliminated raises? Chopped your benefits? Put you on an unpaid furlough?

Compensation for U.S. workers so far in 2009 has been cut by the largest amount in nearly two decades, with a government index of real average weekly earnings down 1.9% since last December, McClatchy Newspapers has reported. And the average workweek — now down to 33 hours — is the shortest on modern record.

As mentioned in an earlier post, if "underemployed workers" - those forced to take shorter shifts or other employment cutbacks - are included, the nation's unemployment and underemployment rate is closer to 18%, not the official 10.2% unemployment rate.

Job Loss Hurts the Little Ones' Pysches, Too

Family finances and the breadwinners' self-esteem aren't the only things that have suffered because of the widespread layoffs that have marked the Great Recession.

Children in families where parents have lost jobs also are struggling – with behavioral issues and stress-induced disorders, and could face longer-term effects, The New York Times reports in today's newspaper. 

“The extent that job
 losers are stressed and emotionally disengaged or withdrawn, this really matters for kids. The other thing that matters is parental conflict. That has been shown repeatedly in psychological studies to be a bad family dynamic.”

– Developmental psychologist Ariel Kalil, director of New York University’s Center for Human Potential and Public Policy

The article also cites a recent study bythe University of California, Davis that found children in families where the head of the household had lost a job were 15% more likely to repeat a grade. Another earlier study found that adolescent children of low-income single mothers who endured unemployment had an increased chance of dropping out of school and showed declines in emotional well-being.

To read the entire article, click here.

Number, length of layoffs up, but severance down

Today's Wall Street Journal has a lengthy front page article about executives and professionals who blithely burned through what many would regard as generous severance packages, thinking they'd be re-employed at another big-salaried job long before the severance was gone. 

Although this issue won't be a problem with many facing joblessness – people cited in the article received severance packages of as much as $200K – one nugget of information did: companies have been steadily decreasing or outright eliminating severance packages in the past decade. For those who do receive severance in today's brutal employment market, the median amount is equivalent to 12.5 weeks' of their salary, down from 21.8 weeks in 1999, according to figures the article cites from Chicago-headquartered outplacement firm Challenger, Gray & Christmas.

This is occurring at a time when a) unemployment is the highest it's been in 26 years; and b) the long-term jobless rate is greater than it's been since the government began tracking it ... in 1948.

For the entire article, click here (although it will only be available to non-subscribers of through Nov. 17).

Slashing Jobs Beyond What's Necessary ... and Defining What's Necessary

Aside from the direct "collateral damage" that has resulted from the 15.7 million jobs lost during the Great Recession, the ruthlessness and severity with which jobs have been slashed is also fueling greater long-term economic inequality in the country, according to an op-ed in today's New York Times.

"In other words, U.S.

 corporate management has

 used the crisis to slash jobs

 well beyond what economic

 decline strictly demanded."

In the column, author Roger Cohen cites Chicago economist David Hale as concluding that U.S. employment has declined at a much faster rate than national output (6% versus 3.8%) since the the beginning of the recession, whereas in Germany and Japan, the job losses have been just a fraction of the increase in output.

"In other words," Cohen wrote, "U.S. corporate management has used the crisis to slash jobs well beyond what economic decline strictly demanded."

This has led to "stunning" increases in American productivity, according to Hale, making U.S. businesses more competitive than ever, which, theoretically at least, eventually could create jobs. "But for now, the newly jobless ask, “'What recovery? What justice?'”

“If managements are raising profits by cutting jobs, and that gives them a stock market gain of 55%, in the end you’re magnifying inequality,” Hale told Cohen. 

To read the entire column, which uses this information to make the case for the critical need for universal health care, click here.

Ultimate Cost of the "Great Recession:" Rising Suicide Rates?

Deeply depressed over a pending home foreclosure and mounting bills, Debra Gibbs, a Goshen, Indiana, homemaker, sent her daughter out the morning of June 23 — and then shot herself in the head, reports this morning.

Gibbs' suicide occurred the day after the repossession of her 2007 Chevy Malibu, the last purchase she’d made with her late husband, Sam. “She was doing everything she could to hold onto what was hers,” said Gibbs’ daughter, Rebecca Filley, said. 

In some U.S. communities that went into recession as early as 2005 or 2006, the worst recession since the Great Depression has been accompanied by a worrisome rise in suicide deaths. People who’ve lost jobs commit suicide at rates two times to four times higher than those who are employed, according to the American Association of Suicidology.

Public officials in the communities that have experienced a rise in suicides can't help but see the recession connection. “We’ve had many situations where people lost their jobs and that was the reason for why they do what they do,” said Sheriff Mark A. Hackel of Macomb County, Mich.

To read the entire story, click here.

To see where your county's suicide rate stands, click here.

Unemployment, Then & Now

Some interesting statistics comparing the unemployed now, and in 1982, when the U.S. jobless rate last rose above 10%:

Another Milestone We'd Just as Soon Skip: U.S. Unemployment Rate Hits 10.2%

As I was preparing this blog for its official introduction to the world this morning, the news reports began pouring in that the nation's unemployment rate has passed that dreaded, yet anticipated, double-digit figure: the closely watched unemployment metric surged to 10.2% in October, the highest it's been in 26 years, the Labor Department reported this morning.

The unexpected sharp increase, from 9.8% in September, came as companies slashed 190,000 more jobs last month. "That was larger than the 175,000 job losses that most forecasters were expecting for the month, and it underscored just how dire the labor market remains despite the recent upturn in the nation's economic output," the Chicago Tribune's "Swamp" reported.

If workers too discouraged to seek work and those who want to work full-time, but have been forced to accept part-time jobs are included, the nation's unemployment and underemployment rate in October was actually 17.5%.

Although unemployment had increased steadily, the double-digit figure is expected to have a major psychological impact and could create potentially significant political consequences.

In apparent anticipation of the grim number, President Obama is expected this morning to sign a bill passed earlier this week by Congress that will extend jobless benefits to the long-term unemployed and expand tax-relief programs for homebuyers and businesses operating at a loss.

The last time the jobless rate crossed double digits was during the recession and initial recovery period of the early 1980s. Unemployment hit 10.1 percent in September 1982, rising to a high of 10.8 percent. It remained at or above 10% until June the following year, the Tribune reported. "This time around, unemployment has risen even faster and, by some analysts' reckoning, could hover around 10 percent for much longer," the newspaper's blog reported.

The jobless rate at the start of 2009 was 7.6%. Since then, the number of unemployed workers has increased by 8.2 million, to 15.7 million as of October, according to the Bureau of Labor Statistics.

If those numbers aren't depressing enough, the "unofficial" labor situation is actually worse because the government doesn't count as "officially unemployed" the so-called discouraged workers, those who have given up looking for jobs. That figure in October was 808,000, a 40% increase over the 484,000 Americans who were too discouraged to continue to look for a job in October of last year.

And to add even more joy to your Friday, an additional 9.3 million people report that they are underemployed because their hours either have been cut or they can't find full-time work. "If this group, and discouraged workers are included, along with others on the fringe of the labor market, the nation's unemployment and underemployment rate in October was 17.5%," the Tribune reported.

Jobs are slashed, stock market soars - WHY?

I've always found it perversely fascinating that in the hours and days immediately after a company announces a major layoff — destroying the financial stability and security of countless families, who often are are the company's customers — its stock price enjoys a significant uptick. U.S. News and World Report's Rick Newman recently offered a primer into why that's the case and why it can't go on forever.

Newman notes that since cratering in March, the stock market has jumped some 60%, one of the most dramatic rallies in history. He adds, however, that as the market has risen, so has the unemployment rate.
"The same workers who have been getting laid off, improving the [bottom line for many companies, are also consumers running out of money to spend. Some are going bankrupt, defaulting on bank loans, and losing their homes. That's a major risk to corporateprofits — and stock prices — down the road."

USN&WR's Rick Newman
So, why are the two not inverse? Stocks have surged because companies are reporting stronger earnings than the market anticipated. But earnings have increased NOT because companies are doing more business; they're improving because companies have cut costs more than revenues have declined. And for most companies, costs equate to jobs.

With stock options and bonuses that often exceed their seven- or eight-digit salaries, CEOs and other executives rarely face the same economic realities as the rest of us. But the one thing they and we both understand is that you can't slash your way to prosperity. Cut as the may, executives know they ultimately must generate new business and new revenue to improve their companies' financial performance.

And on that measure, the outlook is just as worrisome for the stock market as it is for the job market, Newman concluded. "Most American companies still rely on American consumers to keep business humming. Sooner or later, the U.S. job and stock markets need to go in the same direction," he wrote.

27 U.S States Now Have Jobess Rates of 8.5% or Higher

More than half of the United States now has jobless rates of 8.5% or higher. Think about it: if you live in one of the following states, at least one out of every 11 people you encounter is involuntarily unemployed. (Included on the list, of course, is my home state of Nevada.) And that doesn't take into account the millions of additional workers who have been forced to part-time work, which means they've probably also lost their medical insurance as well:

Legislation passed by the Senate yesterday - and which is expected to easily pass the House of Representatives and be signed into law by President Obama - would extend unemployment insurance benefits another 14 weeks for all unemployed Americans who have exhausted their coverage, and provide an additional seven weeks of payments for residents of the states above, along with those living in the District of Columbia and Puerto Rico.

P.S. President Obama did indeed sign the legislation into law on Nov. 6, extending unemployment insurance coverage for millions of Americans.

The Double-Whammy: Uninsured and Unemployed

Because mine and my family's health insurance was at one time provided through my then-employer (as is the case with two-thirds of all Americans), we lost our health insurance the same day I lost my job. (Don't get me started about the injustice of cutting off an employee's health insurance at 5 PM the same day you boot them out the company's door.)

Unlike many Americans, my family was lucky. My husband had managed to convert his contract position into a traditional job days before I got the axe. Because he was in the process of enrolling in the organization's insurance plan, he was able to have our daughter and I immediately covered by his plan. Had that not been the case, we would have faced premiums of $2,000 A MONTH to retain our previous coverage.

So, it comes to no surprise to anyone who's been following the economy and the U.S. health care crisis that this year's devastating job losses have likely increased the ranks of the uninsured by 4 million people. This number according to a new study by Families USA, a Washington, D.C., organization that advocates for consumer health care improvements.
"People who receive a pink slip experience a double whammy. They not only lose their jobs,  but they usually lose their  health coverage as
 well. That's why health reform is so important."

- Ron Pollack, Families USA executive director

The bottom line? If companies can continue to behave so badly, eliminating workers' access to affordable health care with the flick of a termination letter, they must be required to join with the government to finance a public health care option for those they so thoughtlessly discard.

To access Families USA's report, click here.