There are two "must read" articles in the business section today that illustrate how difficult it's becoming to hold onto the American Dream. The first one is in the NY Times: A Hidden Toll on Employment: Cut to Part Time
The number of Americans who have seen their full-time jobs chopped to part time because of weak business has swelled to more than 3.7 million - the largest figure since the government began tracking such data more than half a century ago. [...]
On the surface, the job market is weak but hardly desperate. Layoffs remain less frequent than in many economic downturns, and the unemployment rate is a relatively modest 5.5 percent. But that figure masks the strains of those who are losing hours or working part time because they cannot find full-time work - a stealth force that is eroding American spending power. [emphasis mine]
All told, people the government classifies as working part time involuntarily - predominantly those who have lost hours or cannot find full-time work - swelled to 5.3 million last month, a jump of greater than 1 million over the last year.
In other words, people are losing income even though they're working - for now.
"The change in working hours is the canary in the coal mine," said Susan J. Lambert of the University of Chicago, a professor of social service administration and an expert in low-wage employment. "First you see hours get short, and eventually more people will get laid off." [emphasis mine]
We're no stranger to layoffs here in Michigan, and in spite of what you hear from state Republicans who like to pin our jobs woes on Gov. Granholm, the downturn in the auto industry is a big reason behind the weakness in the overall job market.
That brings me to the second article on CNN: Autos and jobs: Stuck in reverse
What might be less obvious, given the attention given to how much the economy has been hurt by problems in the housing and financial markets, is how important a healthy auto industry is to the overall jobs market.
Even after years of job cuts and plant closings by U.S. automakers, the automakers, along with their suppliers and dealership networks, are responsible for nearly 3 million jobs according to government figures for June.
But the auto sector has lost 67,000 jobs since the end of 2007, accounting for more than one in seven jobs lost overall during the current jobs slump.
Most of the layoffs have yet to be implemented. Many will come this fall when plants that normally would be gearing up for production of new trucks will be idled due to lack of demand. [emphasis mine]
And for those of you who still aren't convinced, read on.
"It's bad news for the economy," said David Cole, the chairman of the Center for Automotive Research. "These are high impact jobs."
That's because job cuts on the assembly lines are likely to lead to even more layoffs at auto parts makers and other companies that supply the industry, such as steel, aluminum and chemical manufacturers, Cole said.
And even though Toyota Motor (TM) and Honda Motor (HMC) now build a significant number of their vehicles at North American plants, they still use overseas suppliers to a far greater extent than their U.S. rivals. So U.S. suppliers won't really be able to rely on Japanese auto giants for that much more business.
It's no wonder this economist told Bloomberg News, "We're in a recession. It's going to widen, it's going to deepen." |
