Are mass layoffs back?
Research In Motion is the latest company to announce big job cuts, signaling a trend that could further damage the economic recovery.
RIM isn't the only one wielding the ax this summer. Cisco Systems (CSCO) recently announced job cuts of 6,500, rocking a tech sector that had been relatively stable in the recession. Lockheed Martin (LMT) also wants to cut 6,500. Borders is liquidating and laying off thousands of employees in the process.
Each of those layoff announcements is devastating for the families involved. Put them together, and we're starting to see a return of sweeping job cuts that could further erode the fragile economy.
Companies are laying off employees at a level not seen in nearly a year, The Wall Street Journal reports. It couldn't be happening at a worse time, with an unemployment rate stubbornly set at above 9% and an economy that doesn't inspire confidence in anyone.
The problem with these levels of layoffs is that they spread with alarming speed in a vulnerable host -- and the current economy fits that bill exactly. Companies see cuts at places like Cisco, generally considered a bellwether of the tech sector, and then look more critically at their own headcounts.
In May, the Journal reported, government and private employers cut 1.78 million workers. That's the highest level in nearly a year. Nearly all of those positions were in the private sector.
The scale of these layoffs is one reason the U.S. has added only 21,500 jobs, on average, over the past two months, the Journal reported. And if the layoffs continue, those monthly numbers could go into the red.
"Everything in business is confidence," Howard Davidowitz, the chief executive of a retail consulting and investment banking firm, told the Daily Ticker. "You lose confidence, and businesses can't deal with that, (and) who could have confidence with what's going on in Washington?"
VIDEO ON MSN MONEY
ie recent college graduates who were never eligible for unemployment ... people who lost
their jobs that for some reason are not eligible for unemployment ... and people who have
exhausted their unemployment benefits. Want to see the 'real' numbers ...?? Use the IRS
database to send out a brief questioner: QUESTION #1 ... Are you currently employed ...??
Question #2 ... If the answer to question #1 is 'NO' ... is it because you are unable to find a
job ...?? Granted a small part of the workforce will still go uncounted ie illegal immigrants
and people that work 'off-the-books', but the number will be much more realistic than the
CRAP they are selling us now. My guess is the 'real' number would be close to 20% and
would cause the political backlash that this country needs to get the economy back on track...!!!
Prior to these latest mass layoffs the actual percentage of unemployed and under-employed was hovering around 26%. That is an astounding figure. This 'recovering recession' is also producing a so-called 'non-existing' inflation rate of approximately 16%.
Our dollar is being devalued so fast its ludicrous.
In my opinion, without forceful action, we, the middle and lower classes, will continue to be led to the slaughterhouse.
Your telling of history is a little muddled. The giant government spending (WWII) that you claim was the reason for pulling us out of the great depression is not quite accurate. When we exited WWII we were in deep debt and that economy was not in a great place. Yes government spending on the war helped to develop our manufacturing sectors and infrastructure (something we should be working on now, but aren't) but in and of itself did not cure our econcomy. The reason our economy did so well after the war was because we were the only industrialized nation that was not bombed into oblivion. There was a huge need to rebuild all of europe, but all of the manufacturing necessary to carry it out was gone, thus the only one with the infrastructure (USA) provided that. Second all of the allied nations had to borrow heavily from the USA during the war to fund the war efforts, thus providing another boon to our eceonomy and our currency. In conclusion government spending did not cure the great depression in the USA, serendipity and a large moat (atalantic ocean) cured the USA of the great depression.
Oh, thanks for the opportunity history joe. The stimulus plan was about a half to a third the size it needed to be. We had to placate and COMPROMISE with the conservatives.. And tax cuts (around 30% of the stimulus) have been shown to give the least bang for the buck. Got to COMPROMISE with conservatives. Direct govt. spending (like repairing all of those worn out roads built by the Eisenhower administration - that was a stimulus back then by the way). Of course, the top tax rate then was about 90%. And lowering the interest rates in a recession is only a small part of the fix.
The bottom line is that if we'd done nothing stimulus wise, we would have had a good look at what things were like in 1931. If you don't believe me, just keep supporting Tea Party types - you'll see. BE CAREFUL WHAT YOU WISH FOR.
Ok beaarly, have it your way. Balance the budget now (the hell with grandma's medicare and social security check). Make up reasons why John Maynard Keynes was wrong and Uncle Milty Friedman and the Chicago Boys and their Monetarism are right. Sure, pretend Supply Side Economics creates jobs. And of course, tax cuts always free the Ayn Rand Genius' among us to create jobs. Oops, the Bush tax cuts created about ...oh, lets just say zero jobs in 7 years and helped to double the national debt in 6 years. Oh, that's right, Alan Greenspan testified ten years ago that he was worried about us paying off the national debt too quickly. Better give the rich a big tax cut to solve that problem. Oh yes, that's right, Greenspan was the one who said in 2006 that people were smart to get adjustable mortgages, not 30 year fixed rate. They'd be throwing money away.
Gee, I didn't know that Europe and Japan were destroyed in the war - thanks for the info. I guess that money we spent on the Marshall Plan wasn't gummint spending. I guess those high taxes we paid after the war must have created a drag on the economy. Balance the budget and watch us turn into (even more of) a Banana republic.
Funny thing is we are closer in opinion than you think. The big problem here is that you think the solution to a debt crisis is more debt. Just by saying that phrase out loud to yourself will make you realize how silly it is. I agree with you on the merits of taxation as was under the Eisenhower admin. We had a huge debt problem then and we were pragmatic enough to realize that we had to A) spend less and B) get more revenue. Unfortunately in the current climate people such as yourself (liberals, kind of) are screaming no cuts we cant throw grandma out and then on the other side we have conservative fools who say no new taxes, the wealthy create jobs. Simple solution we need less spending and more income. We need a period of consolidation where we pay down debt, cut the fat from bloated gov programs, i.e. defense, subsidies to huge corps, susidies to foreign tyrants and dismanteling of the police state (TSA,FBI, CIA Homeland security, CIA, NSA ICE, Border patrol, DEA..... etc) Notice I did not include safety net programs such as Soc sec, dept education etc. Again the big word for today is COMPROMISE!
Clinton spent 500 million a day, Bush Jr 1 Billion a day, Obama 4 Billion a day. Forget politics, the US can't keep spending this way.
re: Micky Bitsko -- I believe we have all but discredited the Keynesians in this recession because we have tried to spend our way out, as well as lowered the interest rate alomost to the point of no interest rate at all, and it did not work, or is not working fast enough.
re: Someone Patton GG-- I doubt the hiring would start with a Republican president in the driver's seat. We would only see more leeway and tolerance for offshore factories and us Americans would be reduced to part-time retail, as minimum-wage shills for Chinese-made merch or as swimming pool cleaners and landscape associates for the big-dogs.
Wait until hyper-inflation starts, we'll be in bread lines.
If it's not in the form of hyper-inflation, then it will be in the form of hyper-deflation. Either way, if things get out of control, we'll have bread lines.
I'm really hoping this possibility is avoided. Many other countries won't even be so fortunate to have bread at their lines.
When was the last time a poor person offered you a job?
The problem with socialism is that eventually you run out of other people's money.
I grew up two blocks away from the housing projects. We need to vote, in 2012, for the candidate who will be pro business NOT pro government.
My border collie is smarter than our President.
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