The Obama and the Democrats have killed off 7.9 million jobs. It’s increasingly likely that many will never come back.
The government jobs report issued Friday shows that businesses have slowed their pace of hiring to a relative trickle.
“The job losses during the Great Recession were so off the chart, that even though we’ve gained about 600,000 private sector jobs back, we’ve got nearly 8 million jobs to go,” said Lakshman Achuthan, managing director of Economic Cycle Research Institute.
One of the big problems is that many of workers who have lost jobs were in industries that are not likely to recover their former strength.
“We’ve got the wrong people in the wrong place with the wrong skills,” said John Silvia, chief economist with Wells Fargo Securities. He said construction workers in California or Florida and auto workers in Michigan will have to relocate and retrain to find new jobs.
“As many as half the people who lost their jobs will have to find something else to do,” said Silvia.
Home building lost nearly 1 million jobs since the start of 2008, while the auto industry shed 300,000 manufacturing jobs due to plant closings. The finance and real estate sectors lost more than 500,000 jobs.
“Those are the areas with the biggest bubbles, and so it’s not a surprise that those are the areas with some of the biggest job losses,” said Scot Melland, CEO of Dice Holdings, a provider of specialized career web sites. “Many of the jobs we lost are never coming back.”
The nation’s working-age population grows by about 150,000 people a month. So the hole is deeper than it looks.
It would take the creation of 10.6 million jobs immediately for the same percentage of the population to be working as was the case three years ago.
Of course, it will take time to create jobs. If it takes three years, more than 3.5 million additional jobs will be needed because of continued population growth.
The unemployment rate is currently 9.5%. A return to the 4.4% rate is out of reach. The Federal Reserve, in its latest forecast, predicts that unemployment will stay around 7% or above through 2012, and in the 5% to 5.3% range in the long-run.
Think of it as Greece on the Pacific: A place with beautiful scenery where the government spent so far beyond its means that mass layoffs, welfare reductions that leave a million children and the poor and elderly without needed services and failing infrastructure are now the norm.
California’s fiscal hole reportedly is now so large that the state would have to free 168,000 prison inmates and permanently close 240 university and community college campuses to balance its budget in the fiscal year that begins July 1.
“We are on the verge of system failure,” Jean Ross, executive director of the California Budget Project, told the Globe and Mail.
“We have to get some federal money,” Ross says. “It would be bad for the U.S. and, arguably, bad for the world to do the shock-therapy approach.”
Peter Dreier, a professor of politics at Occidental College, calls this a classic American dilemma.
“Americans expect a lot of their government,” Dreier says. “But politicians have convinced them they’re not getting what they want.”
Budget analysts say Governor Arnold Schwarzenegger has no choice but to ask Washington for bailout funds, and that Washington has no choice but to agree because not bailing out the Golden State could put the entire U.S. economy at risk.
It seems that California — which at one time had the third-largest economy in the world — is like the biggest U.S. banks: Too big to fail.
Neither Democrat Jerry Brown nor Republican Meg Whitman has offered details in their campaigns to become the state’s next governor about how to close this year’s $19 billion budget deficit or handle next year’s anticipated $37 billion deficit, the Mercury News reports.
California welfare recipients are able to use state-issued debit cards to withdraw cash on gaming floors in more than half of the casinos in the state, a Los Angeles Times review of records found.
The cards, provided by the Department of Social Services are supposed to help recipients feed and clothe their families, work in automated teller machines at 32 of 58 tribal casinos and 47 of 90 state-licensed poker rooms, the review found.
The casinos are listed on a Department of Social Services website that allows welfare recipients to search for addresses of ATMs where they can withdraw cash provided under the Temporary Aid for Needy Families program. The monthly grants start at $694 and go up; most of the ATMs impose a withdrawal limit of about $300 per day.
The LA Times compared the addresses on that website with lists of tribal casinos and state-licensed poker rooms published on the California Gambling Control Commission’s website.
It’s not clear which casinos are most frequently patronized by welfare recipients because social services officials denied a January request from The Times for data showing transaction information from all of the ATMs in their network.
The Capitol Casino, which occupies a pair of small rooms a few blocks from the legislative chambers in Sacramento, appears on the social services website showing where clients can get money. Each room has an ATM: one is so close to a poker table that a player with long arms could lean back and withdraw cash without leaving his chair; the other is a few steps from the blackjack table.
At the Casino Royale on the outskirts of Sacramento, the first thing patrons pass as they walk to the gaming floor is the ATM with a sign next to it saying, “Exceed your ATM daily limit here!!”
The system of paying out welfare benefits via bank cards was created under Democrat Gray Davis. The Democrats in the legislature have also been trying to discontinue fingerprinting of food stamp recipients, a system designed to prevent double-dipping and other abuses.
Schwarzenegger threatened to eliminate the state welfare program in his May budget proposal, and that was before he knew that the cash could be accessed by people strolling from poker games to blackjack tables.
“In a time when we have a $19-billion deficit, and we’re taking a serious look at the future of many safety-net programs, it’s appalling to think that welfare beneficiaries can use their cards in a casino,” said Seth Unger, spokesman for the Assembly Republican Caucus.