UNEMPLOYMENT: WORSE THAN GREAT DEPRESSION


Warning: Trying to access array offset on value of type bool in /bitnami/wordpress/wp-content/themes/the-newspaper/theme-framework/theme-style/function/template-functions.php on line 673

The coronavirus is killing more jobs, businesses, and industries than people.
In America alone, some 43 percent of people are now locked down. While the International Labor Organization projects some 25 million people will be out of work worldwide over the next several months, with income loss from $860 billion to $3.4 trillion, we forecast a much sharper loss of jobs and much greater loss of income.
Indeed, the Great Recession, which began in 2007, cost 22 million people their jobs.
About 14 million Americans – about 9 percent of the workforce – already have lost their jobs because of the pandemic, according to Survey USA, and an additional 25 percent have seen their hours cut back.
Again, these numbers, as we analyze data, do not reflect the true number of those out of work and whose jobs have been lost.
Supporting our forecast that the “Greatest Depression” will be worse than the 1930s Great Depression, on Monday, James Bullard, president of the Federal Reserve Bank of St. Louis, said unemployment could reach 30 percent. Unemployment peaked at 25 percent in the Great Depression.
Before the coronavirus pandemic, the U.S. food service industry alone employed an estimated 12 million workers; now, with restaurants offering only take-out and delivery services, by some estimates more than two million of them are out of work.
Unite Here, a union representing more than 300,000 workers in airports, casinos, hotels, manufacturing, restaurants, textile plants, and other industries, said it expects as many as 90 percent of its members to be laid off.
With hotels, airlines, retailers, and schools slashing operations or shut down, millions will not only be put out of work, they will become homeless on the street.
The self-employed and “gig” workers, barely able to make ends meet in good times, are especially vulnerable, since they have no recourse to government unemployment benefits.
Also, recent studies have found that 40 percent of Americans don’t have enough cash to cover a $400 emergency expense and 53 percent lack savings equal to three months’ living expenses.
In Ohio, on 9 and 10 March, 1,825 people applied for unemployment benefits. A week later, on 16 and 17 March, the number was 48,000. In Pennsylvania, 70,000 people filed claims in one day.
Normally, Kentucky processes 2,000 claims a week; it received 9,000 on 17 March alone. Tennessee’s claims tripled in a week and Michigan recorded four times as many applications in one day last week than were expected.
On 19 March, New York’s state unemployment office received 159,000 calls before noon. The agency’s website traffic has increased fourfold to 250,000 hits a day.
Unemployment numbers emerging from heartland states are “far more dramatic” than those seen during the Great Recession, the Wall Street Journal reported. Claims are being filed by people from the full spectrum of professions and economic classes.
Don’t Tell The Truth
On Thursday, the U.S. Labor Department will release official figures on new unemployment claims.
Meanwhile, it has urged state officials not to announce numbers of unemployment claims but only to describe them generally – as a “large increase,” for example – for fear of worsening public panic and the stock market’s sell-off.
Unemployment claims during the Great Recession emptied unemployment trust funds in 35 states, forcing them to borrow a collective $40 billion to keep paying benefits.
To avoid similar straits, as the recession ended, many states cut the amount of benefits and the length of time people could collect them.
Still, 21 states have entered the current crisis with less in their unemployment insurance funds than they would need to remain solvent during an average recession, according to the U.S. Labor Department.
Among the least prepared states: California, Illinois, Massachusetts, New York, Ohio, and Texas.
Many states are acting to eliminate waiting periods before collecting benefits and extending the length of time people can collect them.
The U.S. Congress is structuring a tiered plan to send relief checks to out-of-workers in various degrees of need.
Mortgage lenders Fannie Mae and Freddie Mac have suspended foreclosure proceedings for 60 days, affecting 182,000 homeowners.
Many businesses are faring no better.
Non-financial businesses have an average of $1.53 in cash available for every $1 they owe. The amount was $1.80 at the start of 2008’s Great Recession, indicating businesses are less prepared for a cash crunch now than they were then.
TREND FORECAST: Postponing mortgage payments will offer no tangible relief. It’s a bill that must be paid, and with no income coming in and other debt building up, the measures are merely cosmetic.
Again, we forecast the destruction of careers, families, and lives because of government-mandated shutdowns that ultimately will do more damage than the virus itself. This is unprecedented in world history.
Thus for politicians, mainstream media, and equity markets to forecast the global “stop work” order will be mitigated as a result of money pumping schemes is unsupported with historical or comparable data.
As we have noted, suicides because of financial despair and its fallout – bankruptcy, divorce, hopelessness – will take longer than the virus to play out but will exceed the number of virus-caused deaths.
Homelessness will soar and crime will rise higher than during the Great Recession because, as Gerald Celente has long stated, “When people lose everything and have nothing left to lose, they lose it.”
Gun sales are spiking as people’s fears for the future are becoming more concerned from the out-of-work, out-of-money, deep-in-debt consequences of the political lockdown of the labor market.
And, as violence rises, the same political class that created the economic crises and the resulting crime wave will increase demands for more gun control. 

Leave a Reply

Skip to content