Could Another 2 Million Jobs Be Lost in US?
The employment situation in the United States is scary.
The bad news is it could get worse.
The problem is states in the red are facing huge employee layoffs to facilitate budget problems.
Finance can often be difficult to understand because of timing issues.
What happens today in one part of the financial world does not immediately impact another area.
This is exactly what has happened in the states.
The Great Recession pummeled states on many fronts, but two are the most obvious - jobs and real estate.
As 2009 turned into a holy terror for individuals, the states were more or less insulated from the pain because each already had most or all of the revenues from 2008.
This is no longer the case.
The massive loss of jobs has created a vacuum in income tax revenues.
The imploding of the real estate market has done the same when it comes to property taxes.
The lack of funds is such a problem that it is the rare state that isn't heavily in the red and facing massive problems.
Consider Illinois.
It is millions behind on payments to keep its schools open and prisons closed.
California, of course, just tried to lower the wages on all employees to $7.
25 an hour.
Some of this is political, but a good bit of it is simply down to the fact that states are dead broke.
The really bad news for states is the revenue shortfall is going to continue for the foreseeable future.
The economy is simply not recovering strongly.
The question is what can the states do to deal with the problem? Most are trying to raise taxes, but the shortfalls are far to large for that to make a major difference.
Instead, we are going to see massive layoffs.
One pundit, Meredith Whitney, has stated she expects to see up to two million jobs cut by states.
This would equate to about an additional 13.
2 percent more unemployed nationwide given the current total unemployed numbers of 14.
6 million.
It is important to remember this is only the highly restricted official number.
Jobs fuel an economy.
The number of jobs created or lost is hardly a glamorous subject, but it is a huge indicator of how an economy is doing.
It doesn't take a rocket scientist to see things aren't going well at the moment.
Throw in another two million lost jobs and the news will be even worse.
The bad news is it could get worse.
The problem is states in the red are facing huge employee layoffs to facilitate budget problems.
Finance can often be difficult to understand because of timing issues.
What happens today in one part of the financial world does not immediately impact another area.
This is exactly what has happened in the states.
The Great Recession pummeled states on many fronts, but two are the most obvious - jobs and real estate.
As 2009 turned into a holy terror for individuals, the states were more or less insulated from the pain because each already had most or all of the revenues from 2008.
This is no longer the case.
The massive loss of jobs has created a vacuum in income tax revenues.
The imploding of the real estate market has done the same when it comes to property taxes.
The lack of funds is such a problem that it is the rare state that isn't heavily in the red and facing massive problems.
Consider Illinois.
It is millions behind on payments to keep its schools open and prisons closed.
California, of course, just tried to lower the wages on all employees to $7.
25 an hour.
Some of this is political, but a good bit of it is simply down to the fact that states are dead broke.
The really bad news for states is the revenue shortfall is going to continue for the foreseeable future.
The economy is simply not recovering strongly.
The question is what can the states do to deal with the problem? Most are trying to raise taxes, but the shortfalls are far to large for that to make a major difference.
Instead, we are going to see massive layoffs.
One pundit, Meredith Whitney, has stated she expects to see up to two million jobs cut by states.
This would equate to about an additional 13.
2 percent more unemployed nationwide given the current total unemployed numbers of 14.
6 million.
It is important to remember this is only the highly restricted official number.
Jobs fuel an economy.
The number of jobs created or lost is hardly a glamorous subject, but it is a huge indicator of how an economy is doing.
It doesn't take a rocket scientist to see things aren't going well at the moment.
Throw in another two million lost jobs and the news will be even worse.
Source...