Welcome to Part-Time America
October 8, 2013 5 Comments
Written by: Sal Pezzino -@sp1989
If you were to look at the state of the United States economy, on paper it would seem as though everything is OK. The Dow Jones has been flirting with 16,000, stock prices are soaring, and the unemployment rate keeps going down. The truth is that it is all entirely artificial.
The government is constantly printing money, company growth is completely artificial in the sense that profits are going up because they are cutting cost by laying off and switching people to part-time, and the Dow is at an all time high because of government cash injections into the banking system. We are currently where we were in 2008 right before floor dropped beneath us. The problem is this time we have much more to lose and this time if and when the floor drops we wont have anything to grab on to. A market loss equal too or worse than the one in 2008 will plunge the United States economy into a proper depression. A depression that would make “The Great Depression” of the early 20th century look like a party.
How do I know this?
Well I am not an economist. I don’t have a degree in accounting, business, or economics, but I read. I have read articles and essays by the best economists, accountants, and business people in the country and world and they all say that we are headed towards a disaster of cataclysmic proportions. The major issue cited is the increase of part-time workers. According to the Federal Reserve, there has roughly been an increase of 20% workers into the part-time work force in 2013. However the unemployment rate has decreased up to 2% in the last two years. Now it’s not hard to see what is happening, and it doesn’t take an economics scholar to understand what is happening.
Since the market failed in 2008 the unemployment rapidly increased for 4 years until it slowly started to “recover”. The unemployment rate is calculated by the amount of monthly unemployment claims filed. The government does not take into account the amount of people who stop filing because their benefits ran out and the government doesn’t calculate the people who could not claim because they got a job in which they made more than $405 dollars a week. That means if you make $406 a week you can no longer claim your weekly benefits. Basically if you get a high paying part-time job you can no longer claim your weekly unemployment benefits.
So in 2010 when the unemployment rate began to go down people started losing their unemployment benefits. The job market wasn’t getting better, unemployment benefits started expiring. So every month the unemployment rate was going down because more and more people were losing their benefits. Now when the end of the 2011 comes along companies and corporations began preparing for when the “Affordable Care Act” kicks in on October 1st this year.
That is “Obamacare” for anyone who doesn’t know the actual name of the “Affordable Care Act”. According to the Affordable Care Act, any company that employs over 50 people full-time, are required by federal law to provide health insurance for their employees. So companies have started laying off divisions of their workforces and cutting back hours to avoid having to pay for health insurance. As long as their workers are working part-time hours they are not legally obliged to provide health insurance. So now companies are hiring more and more part-time workers. Hence the unemployment rate keeps going down and down. More jobs are being created but they aren’t full time positions. The unemployment rate is going down even more because of all the part-time work that is available now.
Some people would say that the creation of jobs is a good thing. Which yes, you can say it is sort of a “glass is half full” type thing. However, when you consider that people are now working two jobs to maintain a certain cost of living or provide for their family, working ungodly hours and consecutive shifts just to put food on the table. This certainly is not indicative of a thriving economy. But the government and media will tell you the economy is recovering and that the market is doing wonderful highlighting all of the circumstantial and aesthetic aspects of our economy but no one is taking the time to see what is actually going on.
Economists are worried about the increase of part-time employment because people will not be prepared for the impending market crash. People are using their savings to pay bills along with their weekly paychecks. People can’t fall back on their savings anymore to stave off the failing economy. Economists talk about how people are becoming less and less inclined to invest or buy new things.
Whatever extra money people have they don’t put in the bank or invest they put it under mattresses. Improper employment combined with lack of investing in a market based economy is a volatile combination. People not buying things is a very bad thing and if people aren’t prepared financially for increasing costs, inflation, and loss of market value than it’s no longer, if a depression is coming but when is it coming?
As long as people are not properly employed or employed commiserate to what the market will bear than people will no be able to sustain themselves through a depression or a recession.