Termination of the Professional Class?

A Wall Street Journal column asserts that the safety net doesn’t extend to the growing professional class in the United States, and airs the possibility that part of these jobs will be “wiped out.” (Read here).
-ABA Journal

Think Progress catches Bill O'Reilly and Karl Rove agreeing that there is a conscious effort among parts of the media, including the New York Times, to paint a dire picture of the economy in order to help Obama. Their logic seems to be that if the media can portray the economic situation as direly as possible, any change when Obama takes office will be for the better, thus giving the new president a bump. We're of the mind that the economic crisis is actually as serious as news reports make it out to be.

Really? What alternate universe are they living?

See more Jack Black videos at Funny or Die

Jobless claims surge to a 16-year high

The sun will come out tomorrow; we just don't always know when "tomorrow" is.
NEW YORK (CNNMoney.com) -- The ranks of Americans getting by on unemployment insurance are rising fast.

As the number of Americans filing for unemployment insurance reaches a 16-year high, President Bush on Thursday announced he would extend unemployment benefits by signing the stand-alone jobless benefits bill pending in Congress.

Focus on the Family...Not So Much

More layoffs at Focus on the Family
Ministry spent more than $500,000 to pass California's Prop. 8 gay marriage ban

UPDATE: Focus on the Family announced this afternoon that 202 jobs will be cut companywide — more than 20 percent of its workforce. Initial reports bring the total number of remaining employees to around 950.

Focus on the Family is poised to announce major layoffs to its Colorado Springs-based ministry and media empire today. The cutbacks come just weeks after the group pumped more than half a million dollars into the successful effort to pass a gay-marriage ban in California.

Critics are holding up the layoffs, which come just two months after the organization’s last round of dismissals, as a sad commentary on the true priorities of ministry.

“If I were their membership I would be appalled,” said Mark Lewis, a longtime Colorado Springs activist who helped organize a Proposition 8 protest in Colorado Springs on Saturday. “That [Focus on the Family] would spend any money on anything that’s obviously going to get blocked in the courts is just sad. [Prop. 8] is guaranteed to lose, in the long run it doesn’t have a chance — it’s just a waste of money.”

In all, Focus pumped $539,000 in cash and another $83,000 worth of non-monetary support into the measure to overturn a California Supreme Court ruling that allowed gays and lesbians to marry in that state. The group was the seventh-largest donor to the effort in the country. The cash contributions are equal to the salaries of 19 Coloradans earning the 2008 per capita income of $29,133.

In addition Elsa Prince, the auto parts heiress and longtime funder of conservative social causes who sits on the Focus on the Family board, contributed another $450,000 to Prop. 8.

“They should do more with their half-million dollars than spending it to collect signatures to take the rights away from a class of people,” said Fred Karger, the founder of the anti-Prop 8 group Californians Against Hate. “I think it’s wrong and it’s hurtful to so many Americans.”

In addition to promoting socially conservative issues such opposition to abortion and gay rights, and supporting abstinence-only education, the evangelical Christian ministry is a purveyor of Christian books, CDs and DVDs. Two months ago, citing Wal-Mart and online retailers as having cut into its product market, Focus announced that 46 employees would be laid off from its distribution department. Late Friday, Focus spokesman Gary Schneeberger confirmed that more layoffs are in store, but said the ministry will not release details until Monday afternoon. Schneeberger hinted that some programs may be eliminated entirely, but declined to elaborate.

“We’re going to need to talk to our own family first,” he said. “We need to respect the people who are affected.”

Schneeberger also refused to discuss the funding priorities that Focus made this fall, including pumping money and in-kind contributions into Proposition 8.

This is the third year that Focus has laid off employees due to budget cuts. In its heyday, the ministry, which relocated to Colorado Springs from Arcadia, Calif., in 1991, employed more than 1,500 people. Many of those employees worked in mailroom and line assembly jobs, processing so much incoming and outgoing correspondences that the U.S. Postal Service gave Focus its own ZIP code.

In September 2005, nearly 80 employees were reassigned or laid off in an effort to trim millions of dollars from its 2006 budget. In addition, 83 open positions were not filled in the layoff, which included eliminating some of the ministry’s programs. At the time, Focus employed 1,342 full-time employees.

“To the extent that we can place them within the ministry, we will try to do that,” said then-spokesman Paul Hetrick. “Most of them will not be able to be placed.”

In September 2007, amid a reported $8 million in budget shortfalls, Focus on the Family laid off another 30 employees; 15 more were reassigned within the company. Most of the layoffs were from Focus’ constituent response services department (i.e. the mailroom).

At the time, Schneeberger, who had replaced Hetrick, said that giving was actually up by $1 million during the fiscal year. However, a very “aggressive” budget goal of $150 million did not materialize.

In a statement issued this September, marking the end of the ministry’s fiscal year, Chief Operating Officer Glenn Williams weighed in on the additional layoffs of 46 people.

“It is certainly heartbreaking that in this case fulfilling that duty means having to say goodbye to some members of our Focus family, but industry realities really leave us no alternative,” he note in his statement. “We are accountable to our donors to spend their money in the most cost-effective and productive manner possible.”

But Lewis, the Colorado Springs activist, wonders whether the families who donate to the nonprofit ministry, realize where their funds really end up.

“Seriously, I would imagine their supporters have got to be asking the question about whether their church is really practicing their theology.”

For Lewis, who is straight, the issue boils down to the significance of targeting a class of citizens for exclusion, at the expense of the families that the ministry could be helping — in this case their own employees.

Lewis likened Proposition 8 to Colorado’s Amendment 2, the 1992 anti-gay measure that was designed to prohibit gays and lesbians from seeking legal protections. Colorado voters approved the measure, which was marketed by proponents, including Focus on the Family, as an effort to prohibit gays and lesbians from seeking “special rights.” The U.S. Supreme Court stuck down the measure as unconstitutional four years later.

“You can’t make homosexuals second class citizens — we’ve learned that already,” Lewis said. “People will look back on this and see how absurd it is.”

Days before this year’s election, Focus founder James Dobson appeared at a closing rally at Qualcomm Stadium in San Diego to rally the anti-gay troops.

Karger of Californians Against Hate, termed the rally a “big bust.” Organizers promised that more than 70,000 supporters would show up; the final tally was close to 10,000, he said.

Yet three days later, California voters approved the measure with 52 percent of the vote. While the measure will certainly head back to court, California has become the 31st state in the country to pass measures that define marriage as being between a man and woman only. In all, Proposition 8 has proven to be the most expensive social issue in the country, with more than $73 million pumped into the cause from both sides. One of the larger contributors to the anti-Prop. 8 efforts was Colorado gay philanthropist Tim Gill, who contributed $720,000 to oppose the measure.

“I’m very disturbed by organizations from out of state like Focus on the Family,” Karger said. “They came in early to make sure the measure got on ballot; they’ve got muscle and they are out to hurt a lot of people and destroy a lot of lives.”

Read about it.

Bailout Junkets 2008

You really need to check this out.

October U.S. Deficit: $237.2B

WASHINGTON — The federal government began the new budget year with a record deficit of $237.2 billion, reflecting the billions of dollars the government has started to pay out to rescue the financial system.

The Treasury Department said Thursday that the deficit for the first month in the new budget year was the highest monthly imbalance on record. It was far bigger than analysts expected, over four times larger than the October 2007 deficit of $56.8 billion, and more than half the total for all of last year.

More here.

You know things are bad when even lawyers are getting laid off.
...
Over all, the Bureau of Labor Statistics reported on Friday that the legal services industry lost more than 1,000 jobs in October.
...
“The last time we saw anything like this, this bad, was in the early ’90s,” Ms. Miller said. “But it’s starting to feel even worse.”

15,000 Jobs Cut First Week November

Eight companies spanning several different industries announce nearly 15,000 layoffs in first week of November.

NEW YORK (CNNMoney.com) -- The first week of November has been brutal for the job market, with nearly 15,000 announced job cuts from a slew of companies across multiple industries.

Read more here.

It Only Gets Worse

It will be hard to create jobs
Unemployment is likely to rise during the first year of Obama's term, no matter what steps he takes.
By Chris Isidore, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Here's the challenge facing President-elect Barack Obama as he weighs how to create more jobs: another half-million jobs likely will be lost between now and Inauguration Day.

That's not even counting the 200,000 jobs that economists believe employers trimmed last month, according to estimates from Briefing.com. The October jobs report will be released this Friday.

The unemployment rate is expected to climb to 6.3% from 6.1% and match the worst reading of the decade. And economists all seem to agree the worst is yet to come.

At some point next year the unemployment rate is forecast to pass 7%, a level not seen since 1993.

And monthly job losses of 200,000 or more are expected to become the norm, not the exception, as the full impact of the credit crisis is felt more keenly on Main Street.

Economists generally believe there's little Obama can do to stop more job losses in the short-term, even if he's able to get a new economic stimulus package passed by the lame-duck Congress and signed into law by President Bush.

"Superman couldn't change what's in store for the U.S. economy. It's going to be ugly," said Rich Yamarone, director of economic research at Argus Research.

Andrew Reina, a practice director for the staffing firm Ajilon Finance Solutions, said caution has become the watchword for companies making hiring decisions because of uncertainty about business conditions.

Even if they aren't cutting jobs, they're likely leaving more positions open this year and could push back hiring plans for 2009 until later in the year. Reina agrees that President-elect Obama won't be able to change that outlook in the near term.

"It's an uphill battle. He's going to have a lot of work on his hands early on," he said.
Big Three eyes help to save jobs

One of the immediate questions facing the Obama administration is what help, if any, to extend to the battered U.S. automakers, who may seek the same kind of financial help that banks and Wall Street firms have received recently. General Motors (GM, Fortune 500) issued a statement Wednesday suggesting it is looking forward to that kind of help from that the new administration.

"GM welcomes President-elect Obama's pledge to support our nation's domestic auto industry in its ongoing efforts to transform its business and develop new technologies," the company said. "This support will enable a competitive U.S. industry to contribute significantly to our nation's economic revival."

The Center for Automotive Research, a Michigan think tank, issued a study Wednesday that showed 2.5 million jobs could be lost in the next year if GM, Ford Motor (F, Fortune 500) and Chrysler were forced by the downturn to shutdown half of their U.S. plants.

"To permit any of the Detroit Three manufacturers to collapse would scar the U.S. economy further at a time when it can ill afford another blow," said David Cole, CAR's chairman. "The likelihood of one or two of the Detroit Three manufacturers ending operations is very real."

But many of those plants could be lost even if government help is made available, especially if auto sales stay weak and credit to car buyers and dealers remain tight.

Along those lines, experts say that worries about the economy, not necessarily policy changes from Obama, will keep employers from adding staff. Even those who expect some kind of stimulus plan getting past Congress say more job losses are already certain.

"I think businesses are going to do what they're going to do, regardless of government policy, at least over the next six months," said Mark Zandi, chief economist of Moody's Economy.com, who forecasts job losses between 150,000 and 200,000 a month over the next six months.
Recovery not likely until 2010

Another economist suggested that the positive effects from a stimulus package would not be felt until spring or early summer 2009 at the earliest and that there would be no significant job gains until 2010.

"Classically, employment is a lagging indicator that will decline well into the recovery period," Brian Bethune chief U.S. financial economist for research firm Global Insight. "Assuming the recession lasts until middle of 2009, it may be another six to eight beyond that before employment stabilizes."

This doesn't mean that Obama is powerless to help create jobs for the longer-term. And economists say things could be worse if the new administration makes the wrong decisions.

Mark Vitner, senior economist with Wachovia, said unemployment could rise as high as 8.5% in the first quarter of 2010 if Congress does approve help for state and local governments and move ahead on public works projects as part of a stimulus package.

Vitner also is worried that employers will pull back on hiring even more if they sense that an Obama administration will make it easier for unions to organize non-union companies.

But he doesn't believe either Obama or the congressional Democrats will actually push an anti-business agenda.

Much of the current job weakness stems from credit tightening, which makes it more difficult for large and small businesses to get the financing they need to expand and hire more workers.

But Vitner said there is relatively little that either Obama or the current Bush administration will be able to do to get banks and Wall Street firms lending again, despite talk about pushing financial institutions to use the $700 billion in federal help to start making loans.

"Banks will continue to tighten until we see an improvement in credit quality. That's 18 months to two years away," Vitner said. "The credit cycle has to play out. You can't legislate lending."

A Note From LawCrossing

As you are no doubt aware, with the current fluctuations in the economy, the legal market is beginning to slow quite dramatically. Especially hard hit are attorneys working in the securities and real estate sectors. A large number of companies and law firms have begun layoffs and there are no signs that the situation will improve anytime soon. From what I have been hearing, even though the pundits are avoiding the term, there is a good chance that the United States is now in a recession.
...
The current economic situation is somewhat analogous to what occurred in 2000-2001. There was an economic boom ("the Internet bubble") that created a great deal of legal work, then the bubble burst and much of the work (and jobs) disappeared. More recently, we had a real estate boom which created a great deal of legal work and has slowed dramatically. This has affected the financial and real estate sectors the most; however, a lack of liquidity in the markets will likely have broad implications for most law firms. The availability of investment capital fuels spending in intellectual property, for example. Moreover, it is axiomatic that companies tend to spend more on outside services such as law firms when times are good than when the economy is in trouble.

What occurred in 2000-2001 with corporate attorneys, in particular, was quite shocking: Tens of thousands of corporate attorneys lost their jobs and a significant percentage of stopped practicing law completely after not finding work for months. The corporate work came to a virtual standstill at most firms in Silicon Valley and San Francisco. What made this so absurd was that most firms did not call these layoffs and instead told most attorneys they were being let go for performance reasons. I knew of many people who went to schools like Stanford Law School and were practicing at well know major firms then like Venture Law Group, for example, who actually ended up moving back in with their parents and are now in completely different careers.

Granted, I know they are a paid service to help assist with finding jobs; however, I believe this is an accurate representation of the current market. And, for someone who has been unemployed for quite some time now, it is not refreshing or comforting to read.

Jobless claims higher than expected

Number of Americans filing for unemployment insurance increases reaches 481,000.

NEW YORK (CNNMoney.com) -- The number of Americans filing new claims for unemployment insurance last week was higher than economists expected, indicating continued weakness in the nation's economy.

The U.S. Department of Labor reported Thursday that initial filings for state jobless benefits reached 481,000 for the week ended Nov. 1.

Read more here.

On this Election Eve, Circuit City, the #2 consumer electronics retailer, is set to close 155 or 20% of its stores, approximately 7300 workers will be affected.

Law Firm Consultant Issues ‘Grimmest Ever’ Forecast
Posted Oct 27, 2008, 02:46 pm CDT
By Martha Neil

The situation likely will get worse for many law firms struggling to cope with the economic firestorm before it gets better, a well-known legal consultant predicts.

In a Hildebrandt International client advisory described by director James Jones as "the grimmest one I've ever written," he says layoffs can be expected at a number of law firms, reports the National Law Journal.

Joyce also predicts flat law firm profits, at best, and a drop of as much as 15 percent in profits at some partnerships. "We see 2009 being a tough year," he tells the legal publication. At the earliest, the economy won't begin to turn around until the end of the year, he says.

There is a little good news, however: countercyclical practices, such as bankruptcy and litigation, as well as regulatory work, are starting to pick up.

Exxon Mobil Managed to Profit

They've been getting a bailout...by all of us.

Exxon Mobil: Biggest profit in U.S. history
Largest U.S. oil company surges past analyst estimates to post net income of $14.83 billion.

Unemployment Woes...I Can Relate

The Bad News About Your Job: Why the unemployment rate is artificially low.

What About Us?

Wall Street's problems have captured the attention of Congress, the White House and the media. But on the country's Main Streets, worried workers, struggling small business owners and cash-strapped families are wondering if anyone is paying attention to them. A look at how Americans are coping with the economic crisis.

It's hard to overstate the poor numbers coming out of Wall Street in recent months. But could it be that we're overstating the gravity of the situation? As job losses have mounted and consumer confidence has plunged, policymakers, news organizations, econo-pundits, and even some of my NEWSWEEK and Slate colleagues have noted that the unemployment rate, which rose to 6.1 percent in September, seems to be at a nonrecessionary, noncatastrophic, low level. The unemployment rate is still below where it was in 2003; and between September 1982 and May 1983, the last very deep recession, it topped 10 percent. (Go here for a chart and historical data).

But maybe the employment data are much worse than they seem. In the past year, the two key measures of employment-the unemployment rate and the payroll jobs figure-have been poor but not awful. The unemployment rate has risen from 4.5 percent a year ago to 6.1 percent. And in the first nine months, 760,000 payroll jobs were lost. This is unwelcome but not catastrophic. So why do things feel so bad? It's not because, as Phil Gramm suggested, we're a nation of whiners. And it's not a matter of columnists and spin doctors shading the numbers to make things look worse.

Rather, these two figures are undermeasuring the weakness in the labor market. By some measures, in fact, the job situation is worse than it has been at any time since 1994.

Here's why. Back in the 1990s, the Bureau of Labor Statistics recognized that in a changing economy, in which outsourcing, self-employment, and contracting were becoming more commonplace, the traditional methods of measuring unemployment and job growth might not accurately portray the economic situation. And it knew its methodology had some quirks-the unemployment rate doesn't account for people who have given up looking for jobs, or who have taken themselves out of the work force. So since 1994, the BLS has been compiling alternative measures of labor underutilization. There are many different varieties of labor underutilization. There are marginally attached workers: "persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past." There are discouraged workers, a subset of the marginally attached crowd, who have "given a job-market related reason for not looking currently for a job." There are people who work part-time because they can't find-or their employer can't provide-full-time work. There are people who have left the work force entirely. Neither the unemployment rate nor the payroll jobs figure captures the plight of many of these folks.

And the alternative labor underutilization measures show a lot of stress. The data on people not in the work force show the number of people not looking for work because they're discouraged about finding jobs has risen from 276,000 in September 2007 to 467,000 in September 2008-up 70 percent. The percentage of people unemployed for more than 15 weeks stood at 2.3 percent in September 2008, up from 1.6 percent in September 2007, a rise of nearly 45 percent. But the most troublesome is the U6. The U6 is sort of the summa of job angst, a shorthand tally for the aggregate of job-related frustration. (Moneybox covered some of this terrain back in 2004 .) To compile the U6, the BLS takes the number of unemployed, plus all marginally attached workers, plus all of those employed part-time for economic reasons, and then calculates that total as a percentage of the sum of the entire civilian labor force plus marginally attached workers.

The U6 in September rose to 11 percent, its highest level since the data series started in 1994 and significantly higher than it was in the last recession, in 2001. The ratio between the U6 and the official unemployment rate has remained relatively steady over the last several years. But that means that as the unemployment rate has risen, so too has the portion of the population suffering from other types of work deficits. Three years ago, when the unemployment rate was 5.1 percent, an additional 3.9 percent of the labor force fell into one of those other underutilized categories. Last month, with the unemployment rate at 6.1 percent, an additional 4.9 percent of the labor force was underutilized. (See charts comparing the unemployment rate and the U6 rate.) Add it up, and more than 10 percent of American workers are essentially not contributing full-time to their families' well-being and to that of the economy at large. The unemployment rate may still be historically low, but the underutilization is historically high.

Sculpture represents nation's economic meltdown

The economy is melting -- literally.

Two artists on Wednesday installed a 1,500-pound ice sculpture that spelled the word "Economy" in Manhattan's financial district.

The "Main Street Meltdown" was to remain in Foley Square until it melted -- about 24 hours. By Wednesday evening, the E and the C had already thawed and vanished.

The backdrop to the sculpture, the wide stairs and row of pillars fronting the state Supreme Court building, is instantly recognizable to millions of viewers of TV's "Law & Order."

"To see the word 'economy' melting down is representational of an extreme time," artists Nora Ligorano and Marshall Reese said on their Web site.

The artists said the sculpture, which is 5 feet tall, 15 feet wide and sits on a pedestal, was installed on Oct. 29 because it is the 79th anniversary of the day in 1929 when the stock market crashed, precipitating the Great Depression.

"Economy" is the fourth in a series of political ice sculptures Ligorano and Reese have created. Earlier this year, they carved blocks into the word "Democracy" and allowed them to melt during the Republican and Democratic conventions.

Home Foreclosures up 71% in the 3Q compared to this time in 2007. Who said it couldn't get worse?

Desperate Times Call for Desperate Measures

Monthly job losses cut across 41 states
More than 80% of states reported jobs disappearing in September, with Michigan suffering the highest losses, according to a government report.
By Lara Moscrip, CNNMoney.com contributing writer

NEW YORK (CNNMoney.com) -- The number of states suffering monthly job losses more than doubled in September, with Michigan losing the greatest number of jobs, according to a government report released Tuesday.

Private sector and government jobs fell in 41 states and the District of Columbia last month, the Labor Department said. By comparison, only 18 states reported monthly job losses in August.

The widespread job losses are a sign of a recession, said Bob Brusca, an economist at Fact and Opinion Economics in New York.

"You expect to see job losses across the board, across the country," Brusca said.

The numbers released Tuesday underline the grim condition of the nation's job market.


Earlier this month, the Labor Department reported that net payrolls nationwide declined by 159,000 in September, the ninth straight month the U.S. economy has lost jobs. The unemployment rate remained unchanged from the prior month at 6.1%.

Eleven states reported jobless rates higher than the national average. Rhode Island posted the highest at 8.8%, an increase from 8.5% in August. Michigan had the second highest rate, 8.7%, which fell from 8.9% the month before.

Michigan lost 28,300 jobs in September and has lost 77,900 jobs in the past year. Georgia lost the second greatest number of jobs - 22,300 - down 61,100 over the past year. Louisiana shed 17,500 jobs in September, a figure not 'substantially' affected by Hurricane Ike, according to the report.

Michigan, home to the country's auto industry, has reported job losses as auto manufacturing plants close and automakers discuss mergers. Just last week, General Motors (GM, Fortune 500) announced that it would close a metal stamping plant near Grand Rapids, Mich., by the end of next year, costing about 1,340 hourly jobs.

Brusca said it's not surprising that Midwestern states have shed a high number of jobs.

"The Midwest has been having more trouble with jobs, that's where manufacturing industries are concentrated," Brusca said. "With the treacherous situation with the auto industry, it'd be surprising if they didn't report job loses," he said.

Nine states posted job gains. Missouri, the state reporting the largest monthly increase in employment, added 3,800 jobs. It was followed by Nebraska, Wyoming, West Virginia and Virginia.