The USA's "Five Percent" Unemployment Rate Is a Bogus Lie.

Source: piximgif.com

The numbers can be cranked out to indicate a far higher unemployment rate by comparing the U-3 Official Unemployment Rate to the U-6 Unemployment rate, the Nonparticipation rate, and the size of the 1099 Army. And the higher numbers are indicative of the malaise that's resumed its grip on our country.

From Quartz online (http://qz.com/), exclamation point mine:

HOLLOW PROMISES!

Why America’s impressive 5% unemployment rate feels like a lie for so many

By Sarah Kendzior April 20, 2016 Link

On Apr. 14, Bloomberg News announced that jobless claims in the US have reached their lowest level since 1973. “All other labor market data are telling us that the economy is creating a lot of jobs,” economist Patrick Newport told the outlet. “This is further confirmation that the labor market is strong.”

That same day, thousands of fast food workers, airport workers, home care workers, and adjunct professors took to the streets across the country to protest brutal labor conditions and demand a $15 minimum wage. Most of these workers make far below $15 per hour. Some make as low as $7.25 per hour, the current federal minimum wage. Most lack benefits. Some, like adjunct professors, have contingent, temporary jobs, sometimes consisting of only one poorly paid course per year. Many low-wage employees work two or even three jobs in an attempt to cobble together enough income to cover basic needs.

According to the US Bureau of Labor, all of these workers are considered “employed.” They are viewed as part of the American economy’s success story, a big part of which is our 5% unemployment rate. As president Barack Obama boasted in February: “The United States of America right now has the strongest, most durable economy in the world.”

But Obama’s claims of a strong economy ring hollow for the many thousands of workers—in professions ranging from those which require a GED to those which require a PhD—who say they cannot make enough money to survive. And these people, at least, are working. Those who cannot find work at all tell an even grimmer story.

From the US Bureau Labor of Statistics we have the Official U-3 Unofficial Rate of 5.1% but also two higher rates U-5 and U-6 of 6.1% and 9.9%, respectively.* Now this doesn't reflect the labor non-participation rate, or the size of the 1099 Army, which we don't have to look for at the BLS because Quartz online put them in their article:

There are three main reasons the vaunted economic recovery still feels false to so many. The first is the labor participation rate, which plunged at the start of the Great Recession and discounts the millions of Americans who have been out of work for six months or more. The second is “the 1099 economy,” a term The New Republic’s David Dayen coined to refer to the soaring number of temps, contractors, freelancers, and other often involuntarily self-employed workers. The third is a surge in low-wage service jobs, coupled with a corresponding decrease in middle-class jobs.

Since 2008, the labor participation rate has fallen from a high of 67.3% in 2000 to 62.6% today. That 62.2% represents a 38-year low, which puts Bloomberg’s claim of a 42-year-low in joblessness in perspective. The jobless number is “low” only because more people are no longer considered to be participating in the workforce.

This non-participation rate includes the long-term unemployed, some 2.1 million people. If we divide the 62.6% of today into the 67.3% of 2008, we get a 7.5% of today's workforce who are now outside of it.

100% X (67.3 / 62.6 - 1) = 7.5%

But also there's this huge, and I mean immense, Army of 1099 Workers:

Many of the long-term unemployed are older workers who once had stable middle-class jobs with benefits. Some, like their younger peers, have resorted to participating in the “1099 economy,” willingly or unwillingly. Freelance and contract workers move from low-paying gig to gig in professions like journalism, arts and entertainment, private transportation, and higher education, trying to scrape together enough cash to survive.

The number of Americans working in this capacity grew from 10.1% in 2005 to 15.8% in 2015, according to new research from labor economists Lawrence Katz and Alan Krueger. David Dayen describes their life as stressful and uncertain: “You’re cut off from any safety net that relies on employers. You have an unpaid, part-time job consisting of getting your next job and making sure you get paid for your last job … You have no advocates for you in the workplace, and little bargaining power to improve your lot.”

And how big is the size of the 1099 Army??? 15.8%. Now what would we expect it to be based on the U-5 and U-6 Rates?

9.9% - 6.1% = 3.8 %.

So what's our real unemployment rate? We take the U-6 rate, plus the decrease in participation rate since 2008, plus the 1099 Army, and we obtain the following true unemployment rate of 33.2%

9.9% + 7.5% + 15.8% = 33.2%

 

To be charitable, we should subtract the difference between the U-5 and U-6 rates of 3.8%.

 

33.2% - 3.8% = 29.4%



This is an unemployment rate worthy of the Grea-a-a-t Depression where nobody worked, and everyone was on the street, begging! 'Til Franklin Roosevelt came and saved us all.

Check the rest of the Quartz online article out.

Now you know why people want to vote for Trump? And rejected the whole GOP establishment? And loathe Hillary?


* Nota bene:

(U-5 is the total of unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force.)

(U-6 is the total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.)

Globalisation costs the developed world's middle classes big time

Forget the positive video up at the top of the CNN article, courtesy of Getty Media. The fact of the matter is, globilisation and mechanization/automation/computerization have been the sources of that giant sucking sound of jobs going south.

Yet in the developing world, which we used to call the third or even turd world, middle classes are enlarging and their median income have been growing by leaps and bounds. That's why you have days-long traffic jams on Chinese expressways these days.

Take a look at this:

Source: Economist Branko Milanovic via CNN.

Of course, the Chinese middle class grew from hardly anything to 500 million in 2013 and more although the article does not mention that.

From the CNN article:

America's middle class is deeply concerned about jobs, pay and their future, and many of them are blaming China.

In the U.S., 43% of voters believe trade with other countries is a bad thing, according to the Pew Research Center. It's not that hard to understand why.

China's middle class is booming while America's middle class is stagnating. A typical family in China has experienced the "Asian miracle," an astonishing 70% bump in their income from 1988 to 2008.

But the middle class in the U.S. and across the developed world has stagnated: incomes rose a mere 4% over that 20-year same period, according to economist Branko Milanovic. He studies pay and wealth around the world and just published a new book, "Global Inequality."

To be clear, a Chinese middle class family still earns around $8,000 a year, a lot less than the typical U.S. household income of about $54,000, according to the World Bank. But the Chinese are getting richer at a much faster rate.

Consulting firm McKinsey predicts that by 2022, the majority of China's urban middle class will earn $9,000 to $34,000 a year. They are embracing all the trappings of a better life: eating out more, vacationing around the world and buying new cars.

Compare that to the U.S. where even people who have jobs worry they are one step away from financial ruin. Expenses are going up, but a typical family earns about the same amount of money now as they did in the mid-1990s.

Assuming, of course, the global economy doesn't completely sputter and break down. China is actually having problems right now, which can be followed at The Automatic Earth.

More at the CNN Article, here.

Holbert Nails It!

From The Boston Herald via Page 5B of the New Orleans Advocate:

The Herald has original, as the cartoon for April 18, 2016, here.

Coal in Dire Straits as Renewables, Natural Gas from Fracking Give it a One-Two Punch!

Reblogging another post from Robertscribbler, supplemented (a demain) by a blurb from yesterday's The Automatic Earth Debt Rattle.

Coal Production, Exports Plummet as Peabody Energy Declares Bankruptcy.

by Robert Scribbler, 13 April 2016 (condensing mine)

Jenny Marienau of the climate disaster prevention group 350.org is certainly right about one thing. A healthy world. A world full of life and of prospects for all people, all living things. A world that avoids the worst impacts of a terrible climate disruption on the road to a hothouse mass extinction. In this, far more hopeful, world there is no place for companies like Peabody Energy. Companies whose profit-making and related accumulation of a corrupting political power and influence is entirely dependent on locking in an ever-worsening global crisis.

Today that company, representing the largest coal interest in the Western World, declared bankruptcy. An optimistic announcement that comes amidst a swift sea change and a precipitous contraction in the global coal industry. One that, if world-wide public, private, protest action, and individual efforts to reduce carbon emissions on the back of 200 nations reaching a landmark global climate agreement in Paris continue in force, may well be a beginning of an end to the fossil fuel energy era.

The broadening contraction in coal has forced bankruptcies not just for Peabody, but for other major American coal players like Arch Coal and Alpha Natural Resources. A devastating wave for a climatologically destructive industry that appears less and less likely to survive in any form resembling its former might.

It’s all a part of an emerging supertrend that is being reinforced along many fronts. The first of which involves a broad global protest action against new coal plant construction and wider fossil fuel based energy itself. Led by key groups like 350.org, Greenpeace, and the Sierra Club, these critical actions have targeted construction sites, pipelines, railways and mines. In addition, a comprehensive divestment campaign spear-headed by 350.org has targeted capital flows to the fossil fuel special interests.

Source: Clean Technica with US EIA data.

Within the fossil fuel ranks there is also division. Even among the fossil fuel players there appears to be an acceptance that coal is on its way out. Messaging coming from the fossil fuel industry appears to have shifted to support of the still very harmful natural gas and for a new global fracking campaign. In essence, what we observe is that the oil and gas interests, including the new fracking interests, have basically maneuvered in a way that effectively throws coal under the climate change response bus. Coal is tougher to greenwash than natural gas and the spearhead campaign against coal as the worst of the worst among carbon polluters has proven undeflectable. This has been especially true in the UK where even conservatives are aiming to shut down coal plants (while continuing their harmful efforts in support of fracking and aimed at suppressing rates of renewable energy adoption).

More here. 

Now from Raúl Ilargi Meijer of The Automatic Earth:

Demand destruction and debt deflation.

• Peabody, World’s Top Private Coal Miner, Files For Bankruptcy (Reuters) 

 

[Link]

Peabody Energy, the world’s largest privately owned coal producer, filed for U.S. bankruptcy protection on Wednesday in the wake of a sharp fall in coal prices that left it unable to service a recent debt-fueled expansion into Australia. The company listed both assets and liabilities in the range of $10 billion to $50 billion. Falling global coal demand, stricter environmental controls and a glut of natural gas have pushed big miners, including the second largest U.S. coal producer, Arch Coal, into bankruptcy protection over the past year.

What Robertscribbler and Raúl Meijer didn't tell you, but Reuters does, is that Peabody Coal bought out MacArthur Coal, a big Australian coal mining concern supplying metallurgical  coal to China's steel mills, right when the price for that kind of coal was at an all-time high. As you might have known recently, demand for minerals and fossil fuels of all kinds have been plummeting, perhaps chiefly due to the recent economic stumbles in China. Of course, Mr. Meijer does keep people abreast about the trends in the general economy and whatnot, and they are not good.

And it is these trends which, if they continue, may put the kibosch on Business-As-Usual, and perhaps save us from the worst cases of the upcoming climate changes.

We Missed the Paris COP21 Climate Change Goal!

That is, the goal of 1.5 degrees Centigrade during the first three months of this year, according to Japan Met Office.

From the Robertscribbler...

Japan Meteorological Agency Shows First Three Months of 2016 Were About 1.5 C Above the IPCC Preindustrial Baseline

by Robert Scribbler, 14 April 2016 (link-format and image caption mine)

We should take a moment to appreciate how hot it’s actually been so far in 2016. To think about what it means to be in a world that’s already so damn hot. To think about how far behind the 8 ball we are on responses to human forced climate change. And to consider how urgent it is to swiftly stop burning coal, oil and gas. To stop adding more fuel to an already raging global fire.

Global policy makers, scientists, and many environmentalists have identified an annual average of 1.5 degrees Celsius above preindustrial marks as a level of heat we should try to avoid. [Link] The Paris Climate Summit made a verbal pledge to at least attempt to steer clear of such extreme high temperature ranges. But even the strongest emissions reduction commitments from the nations of the world now do not line up with that pledge. And it’s questionable that they ever could given the massive amount of greenhouse gas overburden that has already accumulated and is already rapidly heating the world’s airs, waters, ice, and carbon stores.

Current emission reduction pledges, though significant when taking into context the size and potential for growth of all of carbon-spewing industry, don’t even come close to the stated 1.5 C goal. Under our presently accepted understanding of climate sensitivity, and barring any response from the global carbon stores unforeseen by mainstream science, pledged reductions in fossil fuel use by the nations of the world under Paris would limit warming to around 3 C by the end of this Century. Rates of carbon emission reduction would necessarily have to significantly speed up beyond the pledged Paris NDC goals in order to hit below 3 C by 2100 — much less avoid 2 C.

As for 1.5 C above preindustrial averages — it already appears that this year, 2016, will see temperatures uncomfortably close to a level that mainstream scientists have identified as dangerous.

Source: Japan Met.

More here.

"DANGEROUS CLIMATE CHANGE" read the yellow warning sign...

The Coming Global Superstorms

In many ways, it will not be as bad as The Coming Global Superstorm or The Day After Tomorrow, but in other ways it could be ten times worse.

Scientists Warn of Perilous Climate Shift Within Decades, Not Centuries

By Justin Gillis, The New York Times, March 22, 2016

GIANT boulder set in place in The Bahamas the last time we had global superstorms.
That was 120,000 years ago.
Source: Charles Ommanney/The Washington Post, via Getty Images, via The New York Times.



The nations of the world agreed years ago to try to limit global warming to a level they hoped would prove somewhat tolerable. But leading climate scientists warned on Tuesday that permitting a warming of that magnitude would actually be quite dangerous.

 

The likely consequences would include killer storms stronger than any in modern times, the disintegration of large parts of the polar ice sheets and a rise of the sea sufficient to begin drowning the world’s coastal cities before the end of this century, the scientists declared.

 

“We’re in danger of handing young people a situation that’s out of their control,” said James E. Hansen, the retired NASA climate scientist who led the new research. The findings were released Tuesday morning by a European science journal, Atmospheric Chemistry and Physics.

 

The basic claim of the paper is that by burning fossil fuels at a prodigious pace and pouring heat-trapping gases into the atmosphere, humanity is about to provoke an abrupt climate shift.

Thing is, for the month of February, we've already peeked above the global 1.5 C temperature rise that the COP21 agreed to target to stay below sea-level rise that would be dangerous to the low-lying island and river-delta nations. And the World Meteorological Organization has noted that the extreme temperature rises and the attendant climate-related events at the beginning of this year have shocked scientists around the climate science community, and implied that dangerous climate change has arrived by noting that the events and temps that have just happened have never been seen before in our historical records.

"The alarming rate of change we are now witnessing in our climate as a result of greenhouse gas emissions is unprecedented in modern records." — Petteri Taalas, Secretary General of the World Meteorological Organization

The WMO notes a number of extreme and significant climate change related events in its most recent annual report. A series of events that, according to monthly monitoring by NOAA, continued on into a record hot February of 2016. Image source: NOAA. via Robertscribbler.

And a few days before, Robertscribbler noted that without a fast switch to renewables (hydro, solar, wind) and of course, to conservation, rapid climate change could be imminent: a study done in Australia notes that if we continue to increase the extraction, mining and combustion of fossil fuels as usual, we could reach and blow through in 2030 the 2C limit when the really dangerous climate change -- i.e., the coming global superstorms -- develops.

And any related shift in global policy back toward coal, while continuing to build out oil and gas production and consumption based infrastructure would rapidly re-assert the dangerous rates of atmospheric greenhouse gas emissions growth the world has seen over the past few decades. In addition, all current indicators show use of natural gas and oil continuing to expand. And without coordinate reductions in these other two big carbon emitters, a floor will be set on how far greenhouse gas emissions can fall through the, admittedly positive, apparent shift away from coal alone.

As the Australian scientists note ... — you can’t really have much hope of a milder impact from climate change unless you rapidly replace all new growth-based infrastructure with renewables (and related non-carbon emitters). Any new fossil fuel based infrastructure is basically making an already bad problem worse. And continued wholesale reliance on fossil fuels locks in catastrophic climate change over very short time horizons.

Are we -- that is, the movers, shakers and drivers of our economy -- going to do the switchover necessary to forestall this dangerous climate change? After all, the other side peak oil may not hit until 2030, and we could be at or above the limit of 2C temperature rise since the 1880s, and get cast headlong into the age of the global superstorms, with frontal systems the size of mid-size continents and the strength of Category 5 Hurricanes.

Donald Trump and the Working Class Whites

As you know, Donald Trump is making a very good showing among working class whites, particularly among working class white males. People like Chris Hedges believe this is an incipient and imminent form of pure fascism. Others like Luce, whose article was reposted by The Automatic Earth, say it is a new form of class warfare in America.

First Luce's turn, revealing that the USA Conservative elites are just as "Librul" as the Liberal elites.:

Say what you like about Donald Trump, he knows his market. "I love the poorly educated," he said recently to cheers from those he loves.  The rest of America inhaled sharply.  Welcome to a very un-American debate.  Once redundant, the term "working class" is now part of everyday conversation.  In an age of stifling correctness, the only people who are fair game are blue-collar whites.  How absurd these people are, we tell each other, and how ignorant.  Don't they know Mr Trump was born rich?  Can they really be so stupid as to fall for his con trick?  The derision is not limited to liberal elites.  Educated conservatives are just as scathing.  Take the National Review, a flagship of thinking conservatives, that described Mr. Trump as a "ridiculous buffoon with the worst taste since Caligula."

In January it pulled together 22 intellectuals to condemn Mr. Trump's candidacy as an existential threat to conservatism.  Their efforts had no impact on Mr. Trump's fan base.  Now the magazine has switched to damning his supporters.  By declaring open season on blue-collar whites, Kevin Williamson's widely read essay on "white working class dysfunction" marks a turning point.  Yet he is only putting into writing what many conservatives say.  "the truth about these dysfunctional, downscale communities is that they deserve to die," Mr. Williamson writes. "Economically, they are negative assets.  Morally, they are indefensible... the white American underclass is in thrall to a vicious, selfish culture whose main products are misery and used heroin needles.  Donald Trump's speeches make them feel good.  So does OxyContin."

Margaret Thatcher's acolyte, Norman Tebbit, once sparked fury by implying the jobless should get on their bikes to find work.  Mr. Williamson says America's benighted working classes should hire a U-Haul and move on.  As an exercise in condescension, Mr. Williamson's words rival the most inbred hereditary peer.  As an economic prescription, it is wide of the mark.  Millions of Americans are anchored to blighted communities by negative equity, or other ties that bind.  Their life expectancy is falling.  Their participation in the labour market is dropping.  The numbers signing up to disability benefits is rising.  Opoid prescription drugs are rife.  Those that are white tend to vote for Mr. Trump.  On Super Tuesday this month, the counties with the highest rates of white mortality -- whether to overdoses, suicide or other symptoms of community breakdown -- came out heavily for Mr. Trump.  The correlation was almost exact, according to a Wonkblog study.

And there's no place for them TO go to find jobs, thanks to globalization. They are UN, EM, PLOY-A-BLE, thanks to the exporting and automation of jobs, worldwide. As wages stagnated in the US, lot of the jobs went to Mexico and then to China and then other Emerging Market (used to be called 3rd World) countries like Vietnam, Malaysia, Bangladesh and Ethiopia; now the developed countries can't but the exports! And jobs were exported from China, too. Now with the reverses in oil prices and other commodity prices, even the Chinese working classes are hurting, or are going to hurt, big-time. They're realized the business elites have screwed them and the cultural elites hate them, so they're voting for Trump.

Of course, if Trump doesn't get it, it'll get even worse. Which means the white working class could pick the first true fascist who comes down the pike, and joined by others, bring him to power. This is what Chris Hedges predicts -- if not now, then later; if not Trump, then somebody else, quoting :

Richard Rorty in his last book, “Achieving Our Country,” written in 1998, presciently saw where our postindustrial nation was headed.

Many writers on socioeconomic policy have warned that the old industrialized democracies are heading into a Weimar-like period, one in which populist movements are likely to overturn constitutional governments. Edward Luttwak, for example, has suggested that fascism may be the American future. The point of his book The Endangered American Dream is that members of labor unions, and unorganized unskilled workers, will sooner or later realize that their government is not even trying to prevent wages from sinking or to prevent jobs from being exported. Around the same time, they will realize that suburban white-collar workers—themselves desperately afraid of being downsized—are not going to let themselves be taxed to provide social benefits for anyone else.

At that point, something will crack. The nonsuburban electorate will decide that the system has failed and start looking around for a strongman to vote for—someone willing to assure them that, once he is elected, the smug bureaucrats, tricky lawyers, overpaid bond salesmen, and postmodernist professors will no longer be calling the shots. A scenario like that of Sinclair Lewis’ novel It Can’t Happen Here may then be played out. For once a strongman takes office, nobody can predict what will happen. In 1932, most of the predictions made about what would happen if Hindenburg named Hitler chancellor were wildly overoptimistic.

One thing that is very likely to happen is that the gains made in the past forty years by black and brown Americans, and by homosexuals, will be wiped out. Jocular contempt for women will come back into fashion. The words “nigger” and “kike” will once again be heard in the workplace. All the sadism which the academic Left has tried to make unacceptable to its students will come flooding back. All the resentment which badly educated Americans feel about having their manners dictated to them by college graduates will find an outlet.

And this doesn't even begin to touch on the absolute rage that the white working classes will feel, when, not if, but when, Donald Trump either fails to get elected, is assassinated by the Deep State letting it happen on purpose or through indifference and incompetency just like they did 9-11, or gets in line with the Washington Consensus and all its negatively productive foreign and domestic policy initiatives, whether economic, diplomatic, geopolitical, or military. After all, the Donald made his fortune by hiring mom-and-pop small business contractors to build his developments and then screwing them by declaring bankruptcy, not paying on what he owed them. He has the "support" of at least one notorious neocon -- one by the name of William Kristol. And now he's appeared before AIPAC, and got a standing ovation just like Hillary, telling AIPAC what they want to hear:

Speaking with the aide [sic!] of a teleprompter at AIPAC Monday evening, Donald Trump managed not to offend Jewish voters with a prepared speech "about where I stand on the future of American relations with the only democracy in the Middle East, the state of Israel."

Trump received a standing ovation for his comments on President Obama, who he said, "constantly apologizes to our friends and rewards our enemies."
"My No. 1 priority is to dismantle the disastrous deal with Iran," he said.  We have rewarded the world's leading state sponsor of terror with $150 billion and we received absolutely nothing in return."

Trump characterized Palestine as the undisputed antagonist, saying that, "In Palestinian society, the heroes are those who murder Jews."

Which means in foreign policy, nothing will change for the better, only for the worse (unless you don't like Muslims).

Does this sound like an honest guy who will bring fascism to this country while waving the flag and carrying a Christian cross? No, this sounds like a con-artist, who, once he gets into the Oval Office, will throw his white working-class base under the bus.

Don't say I didn't warn you guys.