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The American Pie is gone: New Productivity Revolution

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The American Pie is gone: New Productivity Revolution

Posted on 06 March 2012 by admin

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Here’s the good news. The economic pie is growing again. Growth in the 4th quarter last year hit 3 percent on an annualized rate. That’s respectable – although still way too slow to get us back on track given how far we plunged.

Here’s the bad news. The share of that growth going to American workers is at a record low.

That’s largely because far fewer Americans are working. Although the nation is now producing more goods and services than it did before the slump began in 2007, we’re doing it with six million fewer people.

Why? Credit technology. Computers, software applications, and the Internet are letting us produce more with fewer people.

In theory, this is a huge plus. We can live better and have more time off.

But as Tonto asked the Lone Ranger, “who’s ‘we,’ kemosabe?”

The challenge at the heart of the productivity revolution – and it is a revolution – is how to distribute the gains. So far, we’ve been failing miserably to meet that challenge.

True, some of the gains are widely spread in the form of lower prices and higher value. My 3-year-old granddaughter gets more out of an i-Phone in five minutes than my 98-year-old father ever got out of reading the daily paper (putting to one side their relative capacities to process the information).

But many of the gains are distributed narrowly in the form of profits to owners, and fat compensation packages to the “talent.”

The share of the gains going to everyone else in the form of wages and salaries has been shrinking. It’s now the smallest since the government began keeping track in 1947.

If the trend continues, inequality will become ever more extreme.

We’ll also face chronically insufficient demand for all the goods and services the productivity revolution can generate. That’s because the rich save more of their earnings than everyone else, while middle and lower-income families – with fewer jobs or lower wages – no longer have the purchasing power to keep the economy going at full tilt. (Before 2008 they kept up their buying by sinking deep into debt. This proved to be an unsustainable strategy.)

Insufficient demand – as everyone but regressive supply-siders now recognize – is a big reason why the current recovery has been so anemic and the pie isn’t growing faster.

So while the productivity revolution is indubitably good, the task ahead is to figure out how to distribute more of its gains to more of our people.

One possibility: higher taxes on the rich that go into wage subsidies for lower-income workers, combined with job sharing.

We also need better schools (from early-childhood through young adulthood, followed by systems of lifelong learning) so everyone has a fair shot at a larger share of the gains.

Finally, the benefits of the productivity revolution should be turned into more abundant public goods – cleaner air and water, better parks and recreation, improved public health, and better public transit.

Regressive right wingers want Americans to believe we’ve been living beyond our means, and can no longer afford it.

The truth is just the reverse. Most Americans’ means haven’t kept up with what the economy could provide – if the fruits of the productivity revolution were more widely shared.

Regressives growl about America’s borrowing and tut-tut about future federal budget deficits. The reality is the world is willing to lend us vast amounts of money because we’re so productive. And the productivity revolution is making us ever more so.

Get it? The pie is growing again but most people aren’t getting much of a slice. That’s bad even for those getting the biggest pieces. They’d do better with smaller slices of a pie that grew much faster.

Robert Reich is Chancellor’s Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His “Marketplace” commentaries can be found on publicradio.com and iTunes. He is also Common Cause’s board chairman.

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Healthcare and Medical Careers – Opportunities In Spite Of A Poor Economy

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Healthcare and Medical Careers – Opportunities In Spite Of A Poor Economy

Posted on 09 February 2012 by daytons

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Reading the newspaper can be discouraging with respect to jobs and the current economy. After hearing all the negative news one might really believe there are not many jobs left, but that can be misleading. One career area that always seems to be needing workers is the healthcare field.

Why does that career field always seem to have demand? One reason is due to the aging population. In case you are wondering what does that have to do with it, actually a lot!

A couple of the main reasons people expect job growth in the healthcare fields to continue are as follows: First as the population continues aging they will need more and more medical care. Since more people will need to go to the doctor or a hospital then it makes sense that most areas around healthcare will continue to be a good career choice for years to come. In addition as the current workers retire and exit the workforce their jobs will need to be replaced with new workers. This is true for doctors and healthcare staff (professional and support) alike.

What does this job growth in healthcare fields mean to you? It means a lot; especially if you were trained in a career that currently has zero or very little job opportunities available.

How easy is it to get started in a new career? Well it depends on the career field and your goals. To enter the healthcare field it can be as simple as completing a program from one of many technical trade schools focused on healthcare. There are several career fields in healthcare to consider such as medical and dental assisting, X-Ray technician, and many others. Doctors will still be in demand as well, but it is the support staff such as allied health professionals and the many different types of nursing careers that are really going to need additional workers.

As a result of the demand and the opportunities many folks already working in the healthcare industry are going back to school to upgrade their careers. For example Licensed Practical Nurses can go back via an online LPN to BSN program to complete the necessary coursework in order to become an RN.

Even if you are not currently in the healthcare field you still have opportunities. A lot of other people who held other non healthcare related careers are also going back to school.

Therefore even though economic times are tough, the outlook for healthcare and medical jobs and career opportunities looks good. As long as there is demand for healthcare those jobs or opportunities are not likely to go away anytime soon.

 

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Why America’s job deficit is more important than budget

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Why America’s job deficit is more important than budget

Posted on 03 February 2012 by admin

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The most significant aspect of January’s jobs report is political. The fact that America’s labor market continues to improve is good news for the White House. But as a practical matter the improvement is less significant for the American work force.

President Obama’s only chance for rebutting Republican claims that he’s responsible for a bad economy is to point to a positive trend. Voters respond to economic trends as much as they respond to absolute levels of economic activity. Under ordinary circumstances January’s unemployment rate of 8.3 percent would be terrible. But compared to September’s 9.1 percent, it looks quite good. And the trend line – 9 percent in October, 8.6 percent in November, 8.5 percent in December, and now 8.3 percent – is enough to make Democrats gleeful.

But the U.S. labor market is far from healthy. America’s job deficit is still mammoth. Our working-age population has grown by nearly 10 million since the recession officially began in December 2007 but many of these people never entered the workforce. Millions of others are still too discouraged to look for work.

The most direct way of measuring the jobs deficit is to look at the share of the working-age population in jobs. Before the recession, 63.3 percent of working-age Americans had jobs. That employment-to-population ratio reached a low last summer of 58.2 percent. Now it’s 58.5 percent. That’s better than it was, but not by much. The trend line here isn’t quite as encouraging.

Given how many people have lost their jobs and how much larger the total working-age population is now, we’ve got a long road ahead. At January’s rate of job gains – 243,000 – the nation wouldn’t return to full employment for another seven years.

When they’re not blaming Obama for a bad economy, Republicans are decrying the federal budget deficit and demanding more cuts. But America’s jobs deficit continues to be a much larger problem than the budget deficit.

In fact, we can’t possibly achieve the growth needed to reduce the budget deficit as a proportion of the total economy unless far more people are employed. Workers are consumers, and consumer spending is 70 percent of economic activity. And cutting the budget means fewer workers, directly (as government continues to shed workers) and indirectly (as government contractors have to lay off workers) and therefore fewer consumers.

Yet deficit hawks continue to circle. State and local budgets are still being slashed. The federal government is scheduled to begin major spending cuts less than a year from now. Republicans are calling for more cuts in the short term. Austerity economics continues to gain traction.

Meanwhile Congress is debating whether to renew extended unemployment benefits. This should be a no-brainer. The long-term unemployed, who have been jobless for more than six months, comprise a growing share of the unemployed. (In January they rose from 42.5 percent to 42.9 percent).

Republicans say unemployment benefits are prolonging unemployment, that people won’t get jobs if they get unemployment checks from the government. That’s claptrap, especially when there’s only 1 job opening for every 4 people who need a job. Republicans also say we can’t afford to extend jobless benefits. Also untrue. Jobless workers spend whatever money they get, and their spending keeps other people in jobs.

Government should extend unemployment benefits, and not cut spending until the nation’s rate of unemployment is down to 5 percent. Then, and only then, should we move toward budget austerity.

The job situation is better than it was but it’s still awful. The jobs deficit is still our number one economic problem. Forget the budget deficit until we tame it.

Robert Reich is Chancellor’s Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His “Marketplace” commentaries can be found on publicradio.com and iTunes. He is also Common Cause’s board chairman.

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discussion – Copy

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US Economy adds 103,000 jobs, but..

Posted on 07 October 2011 by admin

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US economy added 103,000 non farm payroll in the month of September higher than analyst expectations which called for 60,000 jobs. The unemployment rate stayed at a high of 9.1 percent according to Bureau of Labor Statistics. Even though new jobs were added to the economy, it was barely enough to keep up with growing labor force and the population.

Prior months job data was also revised and it showed that 99,000 more jobs were added in July and August. This places the jobs data in much better perspective than we had before. Both hourly rates and hours worked increased in September. Health care, retail and services sector contributed to most gains while manufacturing lagged behind shedding 13,000 jobs last month.

Economists expected at least 60,000 new payrolls originally. The number 103,000 is much higher because 43,000 striking Verizon workers were included in this report, otherwise the overall job additions are just around a non-impressive 60,000 as expected.

US economy needs to expand at the rate of 2.5 percent and add about 125,000 jobs per month just to keep up with the jobless rate.

Economist consensus is that job growth is falling short of the required numbers and thereby the 9.1 percent unemployment rates will not change over next few months at least. “It underscores the belief that the economy has skirted a recession but that’s not to say it’s out of the danger zone because there are significant risks out there,” said Millan Mulraine Senior Economist at TD securities.

Even though this unemployment report was a “non-horrible” number according to Jim Cramer, the number were not good enough to assure a meaningful and a strong recovery. The economy is definitely showing sluggish growth which underscores a point that a double dip recession is not in the cards, at least not yet. These kind of reports don’t work well for the stock market and it lost all of the gains and ended the day in red.

A lackluster recovery and a high unemployment rate will keep the pressure on President Obama and the Federal Reserve to do more and put more people to work. President has proposed his 447 billion dollar job plan two weeks ago, but a reluctant Congress has not implemented any provisions whatsoever. Members of Congress including the Speaker of the House John Boehner have in fact rejected those measures. With a divided Congress its impossible to see what will come out of it.

Whatever these numbers may be, ordinary American cannot feel at home and take solace even though the Great recession is over two years ago. There are 14 million unemployed people and another 6 to 7 million under unemployed. There at least 2.5 million people who have dropped out of labor market discouraged and not seeking work.

This in the end spells trouble for President Obama, whose Republican challengers are gaining ground and using these numbers against him in the political arena. Meanwhile protests on Wall Street are getting stronger day by day.

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011211taxes

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Austerity in America is the norm

Posted on 05 October 2011 by admin

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The Big recession may be over two years ago, but the economic carnage is still there. Americans are growing more frugal and austerity minded in many ways not seen before. Incomes have been cut in half and expenses have increased or sometimes doubled, squeezing the middle class into poverty and the poor have literally slid into the drain. Having a constant battle, juggling bills, trying to pay mortgages, and meet expenses is a burden on millions of households and breadwinners. As a result consumers have shifted their spending habits and adapted to more frugal means to stretch the dollar and conserve dwindling resources.

With unemployment rate stuck at 9.1 percent and jobs prospects very few, a new generation of Americans are postponing their life’s goals. They are living in the parents homes, not getting married and and not buying major items and homes that signal stepping into adulthood. Quite frankly the American dream is shattered for many .

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Anchor Mortgage Corporation Providing Nevada Investor Loans For Over a Decade

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Anchor Mortgage Corporation Providing Nevada Investor Loans For Over a Decade

Posted on 25 September 2011 by admin

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With so many Nevada investor loan companies having tightened their credit requirements for first time home buyers, and even requiring strict credit guidelines for established homeowners who are looking to refinance their present homes in order to make improvements to their homes, many of these people are finding it very difficult to find a lender in the Las Vegas, Nevada area to make their dreams a reality. But the good people at the Anchor Mortgage Corporation are there to help. They offer different types of Nevada investor loans, and one of them is going to be the right answer for your particular financing need. Some of these financing options include: -Qualifying on non-traditional income sources -Bridge loans -203K FHA renovation loan -VA loans When you are looking for the best Nevada investor loans, Anchor Mortgage can offer you the best available rates for buying property in the Las Vegas area. They offer competitive low rates and work with anyone who is interested in buying a home or commercial property, regardless of your current credit situation.

Servicing the local Las Vegas community for more than a decade, Anchor Mortgage has several programs that will help you get into your first home or buy that piece of commercial property that is just perfect for your new business expansion needs. Assisting veterans purchase that first home: Are you a veteran looking to make your first home purchase? Then look no further than Anchor Mortgage. Anchor Mortgage understands the sacrifice that a veteran and their family make to serve and protect their country, and so the great people at Anchor Mortgage want to make your dream of home ownership a reality. They will work with you to help you and the VA to help you make that first home buying purchase a great experience without a lot of the usual red tape and undue stress that is sometimes associated with going through the VAS home loan process.

Short sales and other options There may be quite a few Nevada investor loans companies that offer similar programs that cater to prospective buyers with less than perfect credit, but the mortgage experts at Anchor Mortgage have a short sale program called “The “less than perfect credit mortgage loan”, and through this program, they are able to do the impossible, and offer the opportunity of home ownership to those who have suffered a work related financial issue. People who have fallen on hard times in this economy are not bad people, they’ve just had a bad run of luck, and this program gives them a second chance at home ownership, and no one works harder than Mike Zuliani and his staff at Anchor Mortgage. So when you are looking at one of the many Nevada investor loans companies listed in the local Nevada business section, work with an investor company that has been helping the local residents of Las Vegas own property in Nevada for more than a decade. Call Anchor Mortgage Corporation today, because they’re there to help.

Anchor Mortgage can offer you the best nevada investor loans and las vegas refinanceoptions

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Low rates squeeze savers and may hold back economy

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Low rates squeeze savers and may hold back economy

Posted on 25 August 2011 by admin

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PAUL WISEMAN,AP Economics Writer

WASHINGTON (AP) — Super-low interest rates haven’t done what they usually do after a recession. They haven’t ignited economic growth or revived the home market or persuaded consumers to spend freely again.

They have, though, caused misery for retirees and others who depend on interest income. Such income plummeted 27 percent from 2008 to last year.

Now, some economists worry that low rates might be hurting the economy itself — defeating the purpose of the Federal Reserve’s low-rate policies. When savers earn less, they spend less. And spending by individuals drives about 70 percent of the U.S. economy.

Those concerns arise 2½ years after the Fed pushed short-term rates to near zero, part of an effort to combat the gravest recession since the 1930s. It’s kept rates there since.

The Fed is “turning the faucet, and nothing’s coming out,” says William Ford, a former president of the Federal Reserve Bank of Atlanta. “I don’t see any pluses on the plus side of the ledger … But they’re ignoring the strong negative effect that they’re having. They’re killing savers. Retirees are earning nothing on their life savings.”

The Fed this month announced plans to keep short-term rates near zero through mid-2013 unless the economy improves. And in a speech Friday, Chairman Ben Bernanke will likely lay out options for lowering long-term rates even further below the current near-record lows.

One option is a third round of Treasury bond purchases by the Fed. Such purchases would be intended to nudge rates even lower, to encourage spending and borrowing and raise stock prices. But additional rate declines would likely also further drive down rates on savings vehicles.

Low rates have already hurt retirees and other savers. Savings accounts, on average, are yielding 0.15 percent, 1-year CDs 1.15 percent and even 5-year Treasury notes only 1 percent.

Americans’ total interest income dropped from $1.38 trillion in 2008 to $1.01 trillion in 2010, according to the federal Bureau of Economic Analysis. That time span has coincided with a period in which the Fed kept its main interest-rate lever, the federal funds rate, at a record low of zero to 0.25 percent.

In Fort Lauderdale, Fla., Julie Moscove, 69, has watched her monthly interest income drop from more than $2,000 a few years ago to perhaps $400 now.

“It’s ridiculous,” says Moscove, who’s semi-retired but still runs the Tattoo-A-Pet registry business. “I cut coupons now.”

Moscove has little appetite for risk after having been burned by stocks when the dot-com boom went bust a decade ago. So she’s resigned to accepting negligible returns just to keep her money safe.

Pension funds are also being hurt. Largely because of low rates, the nation’s 100 biggest pension funds were $254 billion short of what they need to meet obligations to retirees at the end of July. That was up from a $186 billion shortfall in June, according to the consulting firm Milliman.

Low rates are a tool that Fed officials have long used to boost weak economies. In recessions past, when the Fed slashed rates, a drop in borrowing costs led companies to hire and expand.

More people bought homes, too. Stronger home sales encouraged builders to erect houses and hire construction workers. They also increased consumer spending as new homeowners bought appliances and furniture. That’s why a housing recovery normally energizes the entire economy.

It hasn’t worked that way this time. This recession followed a devastating financial crisis that damaged the banking system and made lower interest rates less effective.

It’s true the Fed’s easy-money policies may have kept the economy from getting worse. And they might have prevented a dangerous deflationary spiral of falling prices, wages and profits — a threat that had worried Bernanke a year ago.

But super-low short-term rates and two rounds of Treasury bond purchases haven’t delivered a robust recovery. The Dow Jones industrial average is down 11 percent since July 21, partly on fears that the economy might slip back into a recession.

Businesses aren’t feeling expansive, not even with the prime lending rate for banks’ best business borrowers at a low 3.25 percent. Corporations are sitting on nearly $2 trillion in cash. They’re waiting to be convinced that the economy is improving before they’ll spend much of it.

And consumers are still too intent on paying down the debts they piled up through the mid-2000s to go on many credit card-charged spending sprees.

Even with mortgage rates near record lows, home sales remain weak. The average sales price of an existing home has dropped 30 percent since before the recession.

Many homeowners can’t trade up to a more expensive house because they can’t sell their homes. They owe more on their mortgages than their houses are worth.

New homeowners might not qualify for mortgages because banks have tightened lending standards after absorbing loan losses during the recession. And a vast inventory of foreclosed homes will likely depress housing prices for years.

“You’re trying to stimulate an industry that has so much garbage sitting on top of it that it won’t work,” says Ford, now a finance professor at Middle Tennessee State University.

The bottom line, Fed critics say, is that super-low rates aren’t stimulating the economy enough to make the financial pain to savers worthwhile.

“Someone is paying a price for ultra-low interest rates: the patient and uncomplaining saver,” writes Raghuram Rajan, a University of Chicago finance professor.

Copyright 2011 The Associated Press.

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