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Latest Unemployment Numbers

By: davenj1 (Diary)  |  June 5th, 2010 at 10:51 AM  | 

RESIZE: AAA

I saw on the local news last night that the unemployment rate dropped from 9.9% to 9.7% as the labor market added 433,000 new jobs last month.  That is great news and the largest monthly increase in a decade, the announcer said.  But, the stock market saw through these numbers because 411,000 of these jobs were temporary census workers added to the federal payroll.  By any analysis, that is an addition of 22,000 jobs.  Wow!

Take out those census workers and the unemployment rate is basically 9.9%- no change.  And considering that May is the hiring season for temporary seasonal workers throughout the country, the mere addition of 22,000 workers is miniscule.  Hence, it would appear that unless Obama intends to put people on the federal payroll, his job-creation policies are doing precious little in the private sector to actually create jobs.

And why would an employer have any incentive to hire new workers.  While indicators of overall economic growth have risen as determined by GDP and worker productivity figures have risen, one thing is painfully aware.  The private sector has learned to produce more with less workers.  That is not good news for hiring forecasts.  Additionally, there is tremendous angst and uncertainty out there among employers as to how Obama’s tax policies will affect them.  They are uncertain and worried how Obamacare will affect their bottom line.  Would you hire more workers if the government was going to dictate that you provide health benefits based on what the government says you will or should provide?  Would you hire more workers if there was a concern over increased payroll tax liability?

If he wants to spur hiring, he needs to be clear.  Stop nuancing proposed tax increases and qualifying that they will effect only a certain segment of the population- namely, those households with greater than $250,000 in income.  No one believes him, nor the Democratic Party.  And why should they?  If you’ve been burned too many times, you eventually learn to avoid the fire.

Conversely, Republicans need to develop a job creation plan that is consistent and does not necessarily rely on a tax-decrease only stance.  Some targeted government hiring and job creation will be needed.  But, their policies have to include some reliable consistency standards to allow the private sector the environment that lead to creating jobs.  That includes a fair and consistent tax structure and regulatory structure.

COMMENTS

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  • izoneguy

    They don’t…not full time W-2 employees who want benefits anyway.

    Now is the time to go as independent as you can. Set yourself up as a Subchapter S – corp.

    http://www.entrepreneur.com/encyclopedia/term/82690.html

    The S corporation is often more attractive to small-business owners than a standard (or C) corporation. That’s because an S corporation has some appealing tax benefits and still provides business owners with the liability protection of a corporation. With an S corporation, income and losses are passed through to shareholders and included on their individual tax returns. As a result, there’s just one level of federal tax to pay.

    A corporation must meet certain conditions to be eligible for a subchapter S election. First, the corporation must have no more than 75 shareholders. In calculating the 75-shareholder limit, a husband and wife count as one shareholder. Also, only the following entities may be shareholders: individuals, estates, certain trusts, certain partnerships, tax-exempt charitable organizations, and other S corporations (but only if the other S corporation is the sole shareholder).

    In addition, owners of S corporations who don’t have inventory can use the cash method of accounting, which is simpler than the accrual method. Under this method, income is taxable when received and expenses are deductible when paid.

    I have been Subchapter S for over 10 years. The trick is to be able to sell your services, do the business and then get paid for it. Once you develop a client base and a steady stream of income, the next trick is to turn your clients into sales people for you. Word of mouth advertising is the most powerful and cheapest advertising you can have. It takes a lot of hours and sometimes you may feel like you are working for 5 bucks an hour – but in the end – being your own boss will give you far more security than any “job” can.

  • eastbaylarry

    leaving just 22,000 ‘other’ jobs created. But how many of THOSE jobs are also government jobs in other agencies?

    Looks to me like there was essentially NO jobs created last month.

  • izoneguy

    22,000 new jobs that will be created that actually create wealth, wealth that gets taxed and sent to the other 411,000 people who create nothing. I guess they will pay taxes on the wages that come from taxes but that is like talking a thimble full of water from the original bucket and pouring it back in to only get filled up again from the original bucket – confusing I know – kinda like the federal government….

    In reality the only way America will have a future is to be hiring the 411,000 employees in the private sector to create wealth and the government can hire 22,000 people instead….

    The way it is going will be unsustainable. Greece II here we come……

  • jazzycmk

    There were actually cutbacks of 20,000+ jobs at the state and local government level due to budgetary constraints.

    41,000 still a dismal number by any account.

  • eastbaylarry

    would {help} pay for 22,000 new government jobs, but I would still prefer to see 22,000 LESS government jobs and a reduced deficit.