The March unemployment rate remained the same, yet once again the BLS survey showed another huge increase in those not considered part of the labor force anymore and as a result the figure hit a record 93.175 million high. The official unemployment rate is 5.5%. The labor participation rate is also 62.7% and remains at 37 year record lows. From a year ago, the number of people considered not in the labor force has increased by over two million.
This article overviews and graphs the statistics from the Employment report Household Survey also known as CPS, or current population survey. The CPS survey tells us about people employed, not employed, looking for work and not counted at all. The household survey has large swings on a monthly basis as well as a large margin of sampling error. The CPS has severe limitations, yet, it is our only real insight into what the overall population are doing for work.
Editor’s note: This is a joint investigation of The Center for Public Integrity and The Seattle Times.
Denise Pitts walked into the pawn shop not far from where she bought her mobile home in Knoxville, Tennessee, and offered up her wedding rings for $100. Her marriage wasn’t over, but her husband was battling cancer and, Pitts said, her mortgage company told her the only way to keep a roof over his head would be to sell everything else.
Across the country in Ephrata, Washington, Kirk and Patricia Ackley sat down to close on a new mobile home, only to learn that the annual interest on their loan would be 12.5 percent rather than the 7 percent they said they had been promised. They went ahead because they had spent $11,000, most of their savings, to dig a foundation.
And near Bug Tussle, Alabama, Carol Carroll has been paying down her home for more than a decade but still owes nearly 90 percent of the sale price — and more than twice what the home is worth.
The families’ dealers and lenders went by different names — Luv Homes, Clayton Homes, Vanderbilt, 21st Mortgage. Yet the disastrous loans that threaten them with homelessness or the loss of family land stem from a single company: Clayton Homes, the nation’s biggest homebuilder, which is controlled by its second-richest man — Warren Buffett.
Buffett’s mobile home empire promises low-income Americans the dream of homeownership. But Clayton relies on predatory sales practices, exorbitant fees, and interest rates that can exceed 15 percent, trapping many buyers in loans they can’t afford and in homes that are almost impossible to sell or refinance, an investigation by The Center for Public Integrity and The Seattle Times has found.
Berkshire Hathaway, the investment conglomerate Buffett leads, bought Clayton in 2003 and spent billions building it into the mobile home industry’s biggest manufacturer and lender. Today, Clayton is a many-headed hydra with companies operating under at least 18 names, constructing nearly half of the industry’s new homes and selling them through its own retailers. It finances more mobile home purchases than any other lender by a factor of six. It also sells property insurance on them and repossesses them when borrowers fail to pay.
Some people are saying we’ll need to either make cuts in defense spending or Social Security, and that those are our only choices if we don’t raise taxes. But with a GOP-dominated Congress, it won’t mean increasing revenues by raising taxes on those who are most able to afford an increase.
Even though the rich live longer than the rest of us, the Washington Post columnist Robert Samuelson (like most Republicans) says we should raise eligibility ages for Social Security beneficiaries to reflect longer life expectancies, perhaps to 69 or 70. In other words, they want most of us “working stiffs” to work until the day we drop dead (most probably, while we’re still at work). That’s a very painless plan to implement — especially if you’re a member of Congress. According to Fact Check:
Members of Congress are eligible for a pension at the age of 62 if they have completed at least five years of service. Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service. The amount of the pension depends on years of service and the average of the highest three years of salary. By law, the starting amount of a Member’s retirement annuity may not exceed 80% of his or her final salary.
This conversation took place on March 21, 2015 at John’s home in Mill Valley, California.
John, who was the person that most influenced you?
There isn’t any doubt that it was my grandmother, my mother’s mother Eleanor Roosevelt. We grandchildren called her Grandmère—she learned French before she learned English. She was such a gifted person. She let me absorb who was and what she treasured. I think I learned my basic values from her — for example, her attachment to her family, her devotion to human rights; her absorption with the United Nations; her affection for Israel.
What are your early memories of her?
I was very young, but I still remember Grandmère getting off an airplane in Seattle and coming to stay with us on Mercer Island. Later, while I was still a young child, my mother and I moved to the White House during WWII, but I hardly remember her from that time because she was gone so much—overseas, visiting bases in the Pacific, London or elsewhere.
My memories of her are more vivid from the years I was a student at Amherst College. My parents had gone to Iran for two or three years, so she said, as was her way, “Johnny, if you don’t have a home to go home to, you have mine. Come to New York City or to Hyde Park, wherever I am. And I did.
What do you remember of those times?
There are so many memories…like when John Kennedy won the presidency from Richard Nixon and we watched it on television at her apartment on East 83rd Street, and when JFK visited her at her home in Hyde Park. There were two houses on her parcel of land on the estate at Hyde Park. The family home, Springwood, we called The Big House, Her home, called Val-Kill, was named for the stream that meanders through the land. Her home at Val-kill was actually constructed as a small furniture factory that produced amazing reproductions of traditional American furniture. It was my grandmother’s way of employing a few local craftsmen that would not otherwise have had work.
Yves here. I’m sure readers can add to this antidote to the pervasive Warren Buffett hagiography in American media. For instance, Buffett lavishes praise on the executives of Wells Fargo, when Wells engages in abusive servicing (seehere and here for examples). So Buffett is part of the cohort that has held bank leaders as competent and deserving of their leadership roles, which serves to hide the fact that a big chunk of industry profits rests on predatory behavior, like gotcha terms in checking accounts and credit cards.
By Raúl Ilargi Meijer, editor-in-chief of The Automatic Earth. Originally published at Automatic Earth
I think I’ve never understood the American – and international – fascination with money, with gathering wealth as the no. 1 priority in one’s life. What looks even stranger to me is the idolization of people who have a lot of money. Like these people are per definition smarter or better than others. It seems obvious that most of them are probably just more ruthless, that they have less scruples, and that their conscience is less likely to get in the way of their money and power goals.
America may idolize no-one more than Warren Buffett, the man who has propelled his fund, Berkshire Hathaway, into riches once deemed unimaginable. For most people, Buffett symbolizes what is great about American society and its economic system. For me, he’s the symbol of everything that’s going wrong.
Last week, Buffett announced a plan to merge a number of ‘food’ companies in a deal he set up with Brazilian 3G Capital. For some reason, they all have German names (I’m not sure why that is or what it means, if anything): Heinz, Kraft, Oscar Mayer. Reuters last week summed up a few of the ‘foods’ involved:
His move on Wednesday to inject Velveeta cheese, Jell-O, Lunchables, Oscar Mayer wieners, and Kool-Aid into his portfolio, stuffs an already amply supplied larder. The additions came from the acquisition of Kraft Foods Group Inc by H.J. Heinz Co, which is controlled by 3G Capital and Buffett’s Berkshire Hathaway. His larder already included everything from Burger King’s Triple Whopper burgers, Coca-Cola soft drinks and Tim Horton donuts to See’s Candies and Dairy Queen icecream Blizzards, as well as such Heinz brands as Tomato Ketchup, Ore-Ida fries, bagel bites and T.G.I. Friday’s mozzarella sticks.
A news story this week blandly described the perverse reality that is the current state of the Canadian economy. The headline read “Corporate profit margins at 27-year high and likely to stay there.” Pretty heady stuff if you took it out of context. But the context is everything: pathetic growth projections, record high personal debt, stagnating wages, hundreds of billions in idle corporate cash, a multi-billion-dollar infrastructure deficit, a growing real estate bubble and a Bank of Canada chief who has no idea how to fix things. And, of course, a prime minister who thinks fixing things is heretical.
The headline describes the conclusion of a report by CIBC World Markets, which concluded that not only has the profit margin hit a 30-year high of 8.2 per cent (the historic average is less than 5 per cent), but the signs are that it is going to stay there — because “profit margins are fully supported by the fundamentals.”
Ah, yes the fundamentals. The study doesn’t purport to make any ethical or moral judgments (or even economic ones for that matter) — it just states the facts. Indeed, it doesn’t talk about the context of those facts at all, nor that this hyper-profitability might be bad for the economy in general, for growth, for employees, families and governments. It’s as if the fundamentals were somehow god-given, having fallen from the sky.
Chris Rock said, “If poor people knew how rich rich people are, there would be riots in the streets.”
The findings from three studies published over the last several years suggests that Chris Rock is right. Most people have no idea how unequal our society has become. The average American believes that the richest 20% own 59% of the wealth and that the bottom 40% own 9%.
The Republican party’s leaders (and the conservative media) uses moral issues and religious beliefs to divide voters to push their economic agenda of taxation, government spending and worker’s rights — getting people to vote against their own best economic interests.
The Republican leadership knows that if someone believes birth control is immoral, and that abortion is murder (but that the death penalty is divinely sanctioned and perfectly justified), the voters will vote for Republicans, allowing them to lower tax rates on the rich, make cuts to food stamps for the poor, and pass labor union-busting laws — because for many Republican voters, that would be the lesser of two evils.
The Republican party uses wedge issues such as gay marriage, civil rights and immigration, (preying on homophobia, racism and bigotry) to divide the voters to get laws passed that primarily benefit the super-rich and the largest multi-national corporations. The Republican leadership will advocate old-fashion and superstitious beliefs (and sell snake oil if it could) to promote their economic agenda.
So much for yet another “above consensus” recovery, and what’s worse it is, well, about to get even worse, because while the Fed keeps baning some illusory drum that slack in the economy is almost non-existent, the reality is that in March the number of people who dropped out of the labor force rose by yet another 277K, up 2.1 million in the past year, and has reached a record 93.175 million.
Indicatively, this means that the labor force participation rate dropped once more, from 62.8% to 62.7%, a level seen back in February 1978, even as the BLS reported that the entire labor force actually declined for the second consecutive month, down almost 100K in March to 156,906.
What I’m about to tell you is not my own opinion or even analysis. It’s original data that comes from the United States Federal Reserve and national credit bureaus.
40 million Americans are now in debt because of their university education, and on average borrowers have four loans with a total balance of $29,000.
According to the Fed, “Student loans have the highest delinquency rate of any form of household credit, having surpassed credit cards in 2012.”
Since 2010, student debt has been the second largest category of personal debt, just after a home mortgage.
The delinquency rate for student loans is now hovering near an all-time high since they started collecting data 12 years ago.
Only 37% of total students loan balances are currently in repayment and not delinquent.
The rest—nearly 2 out of 3—are either behind on payments, in all-out default, or have entered some sort of deferral program to delay making payments, with a small percentage still in school.
It’s pretty obvious that this is a giant, unsustainable bubble (more on this below). But even more important are the personal implications.
University graduates now matriculate with tens of thousands of dollars worth of debt.
Debt is another form of servitude. Like medieval serfs, debt keeps people tied to jobs they dislike in places they don’t want to be working for bosses they hate doing things that make them feel unfulfilled.
Debt makes it very difficult to walk away and start fresh.