Corporations are slashing jobs. States are in on the act too. Let’s take a look at a few headlines. All are from last weekend.
Citigroup (C) Slashing Investment Banking Jobs
Yahoo Finance is reporting Citigroup to slash investment-banking jobs
Citigroup is preparing fire thousands from its worldwide investment-banking division, The Wall Street Journal reported on Sunday. The Journal, citing people familiar with the matter, said the layoffs are part of a plan to cut about 10 percent of the staff of the 65,000-member investment-banking group.
Miami Teachers Protest Job Cuts
NBC is reporting Teachers Protest Job Cuts.
Teachers in Miami-Dade County are fighting back against the school board’s decision to slash jobs. Several teachers gathered outside the Intercontinental Hotel on Sunday to protest superintendent Rudy Crew’s decision to slash jobs while refusing to cut his own pay. The board approved additional job cuts last week, raising the total number of jobs lost to more than 2,000.
Continental Airlines Slashing Jobs
The Economic Times is reporting Continental Airlines to slash jobs.
Continental Airlines Inc, which is shedding 3,000 jobs in a cost-cutting move, is offering employees a year’s worth of health insurance and travel perks if they leave on their own.
“We are offering all of our work groups voluntary plans to reduce the number of involuntary furloughs and terminations that will be required due to capacity cuts,” said Continental spokeswoman Mary Clark.
Continental has made an umbrella offer to all labor groups that includes the health benefits and free travel privileges for employees and their families until 2023. The offer was extended to employees who have worked at Continental for at least 10 years.
Janesville WI GM Closing To Cost 9,000 Jobs
The Chicago Tribune is reporting Janesville GM closing could result job loss of 9,000
A new analysis shows the closing of General Motors in Janesville could result in the loss of nearly 9,000 jobs and nearly half a billion dollars in labor income. Using software developed by the Minnesota Implan Group, Deller did the analysis assuming that nearly 2,200 of the plant’s 2,667 employees live in Rock County.
It gets to the nearly 9,000 mark — about 10 percent of the county’s resident work force — when jobs are lost through a ripple effect. Every modeling program uses a multiplier, a number that expands the effects.
In this case, the program attached different multipliers to the direct number of GM jobs lost (2,196) and the direct labor income of those GM employees ($188 million).
Pennsylvania Tax Collectors Automated Out Of Jobs
The Evening Sun is reporting Proposal looks to slash local tax collectors’ jobs to streamline process.
Lawmakers are eyeing a bill to drastically change the way wage taxes are collected by slashing the number of tax collectors and creating countywide collection districts. Sen. Jane Earll, of Erie, sponsored the bill, which cleared the Finance Committee on Wednesday by a vote of 25-1 and now heads to the House.
California unemployment hits 6.8%
The Los Angeles Times is reporting California unemployment hits 6.8%.
California’s moribund construction and real estate industries helped push the state unemployment rate to 6.8% in May, its highest level in nearly five years. The state Employment Development Department reported Friday that joblessness in May rose six-tenths of a percentage point from the previous month and was a dramatic 1.5 percentage points higher than in May 2007.
“Although some forecasting groups continue to debate whether or not the economy is heading into a recession, these numbers should make it perfectly clear that the state is already in a recession,” Beacon Economics, a Los Angeles-based research firm, said in an analysis of the jobless data. “The only question now is, how long and how bad will it be?”
Big California Unemployment Jump
click on chart for sharper image
Florida Unemployment Rate Highest Since 2003
NBC Is reporting Fla. Unemployment At Highest Rate Since Early ’03.
State officials say Florida’s unemployment rate in May was at its highest in more than five years. The jobless rate was 5.5 percent, the same as the national number.
The Agency for Workforce Innovation reported Friday that another 56,000 workers lost jobs last month, bringing the total number of jobless in Florida to more than 500,000.
Dismal Job Reports
Those are dismal job reports. There are hundreds more you can find.
It’s question time.
Which way are foreclosures going to head? Bankruptcies? Credit Card Defaults? Home Equity Defaults? Commercial Real Estate Defaults? Corporate Loan Defaults? Corporate Profits?
The answers: Up, Up, Up, Up, Up, Up, Down.
Unemployment Is Lagging Indicator
Somehow the fact that unemployment is a lagging indicator, is being spun as a positive thing. Unemployment is indeed lagging, but it isn’t positive at all. We have not yet bottomed. When we bottom, unemployment will keep rising for as much as another year.
In normal economic times, with more household savings and less debt, consumers would be better prepared to weather the storm. That is what happened in 2002-2003.
Now, most consumers have virtually no savings to weather the storm. Worse yet, unemployment is likely to rise for at least two more years. I called for 6% in 2008 and 7% or more in 2009. California is nearly there. Michigan is over 8.5% already, perhaps on its way to 10%.
Should Congress act to stem rising unemployment with silly makeshift job programs, the dollar is likely to sink further which will put still more pressure on those with jobs.
Some suggest we are in the eye of a hurricane. However, as I said on Sunday, the reality is there are Many Hurricanes, Many Eyes. Most have not even reached shore yet. Very few people are prepared for the series of storms about to hit. And for those barely hanging on, each storm will be worse than the one before it.
Mike “Mish” Shedlock
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