Fri, 05 Jun 2009

Unemployment

Unemployment has hit 9.4% nationally. There are nine cities in California with rates greater than 15%. The price of oil is over $70/barrel with expectations that it will be $80 by the end of the year. So, is the recession getting better?

I suspect that it depends on the way you look at it. Are profits up at companies that you own through investments? Are they up because they are cutting costs by eliminating your job? Are you being set up to be laid off in the future to maximize profits?

Employment is a lagging indicator. That means that it will continue to get worse even as the economic conditions improve. Remember those profits? They're good for you if at least part of your income is based on stocks like a 401K plan. They mean little to you if none of your income is based on stocks.

OK, I realize that, as the employers make more profits, they are able to hire more people to produce more profits. It's the Republican's favorite trickle down economics theory. "I want to make more money so I hire you at the lowest wages and benefits possible so that I can do that." The problem is that the owners are constantly trying to maximize their profits. Maximizing profits means that they need to minimize the workers pay and benefits (and minimize the number of workers, actually).

So, the bottom line is that the national recession can improve while your personaly recession continues to worsen. It's all a point of perspective

posted 07:29 [/Economy] permanent link