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Tuesday, May 25th, 2010

The Latest in Unemployment & Consumer Prices

The Labor Department has released unemployment data for May and the numbers suggest no significant improvement in the nation’s employment landscape—in fact, last week’s numbers marked the largest rise in unemployment since February.

Here’s a look at some of the numbers and how they relate to previous weeks.

  • Initial claims: For the week ending May 15th, initial unemployment claims rose to 471,000 from 446,000, an increase of 25,000 from the previous week. The four-week average, too, rose by 3,000.
  • This time last year: In this week of 2009, 540,925 initial unemployment claims were made; this year, that number was down slightly, to 407,940, suggesting that the employment situation has improved somewhat since a year ago.
  • High & low claim rates: States reporting the highest rate of initial unemployment claims include California, Michigan, New Jersey, Georgia and Puerto Rico; the lowest reported rates came from New York, Kentucky, Connecticut, Missouri and New Hampshire.

The numbers surprised some analysts, who reportedly expected job growth last week. The increase in unemployment rates points to continued uncertainty in the job market, even as the economy generally seems to be recovering. Because unemployment is often an indicator of bankruptcy filings, these statistics can have long-reaching effects.

Possible Explanations

The news may not be all bad, though. In April, as the economy expanded, the official unemployment rate actually grew, not because more jobs were lost, but because more people began actively looking for work, as they perceived the job market was strengthening.

Consumer Price Index for April

The Bureau of Labor Statistics released data this week that show the Consumer Price Index for April 2010 decreased by 0.1 percent, largely fueled by a 1.4 percent decrease in the energy index. Here’s how some other sectors fared:

  • The food index rose by 0.2 percent in April, spurred by rises in the price of meat, fish, poultry and eggs.
  • The index for all items excluding food and energy remained unchanged.
  • The indexes for recreation, airline travel and medical care rose last month, but were balanced by decreases in the indexes for apparel, household furnishings and services.

During the last year, the index for all goods and services has risen by a modest 0.9 percent, which the BLS reports is the smallest 12-month increase seen since 1966.

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Friday, May 7th, 2010

Helpful Hints for Tough Employment Times

The U.S. Labor Department released its latest unemployment numbers for the month of April, and the news is mixed. The U.S. job market added 290,000 jobs in April, more than predicted and the fourth straight month of job growth. However, the unemployment rate crept up to 9.9% from 9.7%, where it had been for the first three months of the year.

With a record-high 45.9% or unemployed people had been jobless for 27 weeks or more, the unemployment rate is expected to remain high despite other gains in the economy.

Your Rights as an Employee

In tight times, it's important to know what you can legally expect from your employer so you can take appropriate action if your rights are breached. Here's an outline of your rights as a worker.

  • Right to freedom from discrimination: Federal law prohibits your employer from treating you in a specific way based on your race, ethnic identity, religion, national origin, sex, disabilities and so forth. If you suspect that a boss took action based on one of these factors, it may be a good idea to contact a lawyer.
  • Right to a safe workplace: No employer can subject you to perilous conditions at work or expose you to known safety hazards.
  • Right to privacy: While not every state has a right to privacy law, many do, and most include your personal possessions (like purses), storage areas, private phone calls and emails. Be careful, though, because company-owned computers or phones offer only limited protection – in general, if you wouldn’t want your boss or coworkers to see something, keep it out of work email.
  • Right to whistle-blowing without consequences: Blowing the whistle on a boss or coworker (that is, notifying authorities about forbidden or illegal activities that someone is conducting or has conducted) is not legally considered grounds for termination.
  • Right to leave for qualified medical purposes: Being penalized for certain types of medical leave is prohibited.
  • Right to fair wages: This can get murky, because women in the U.S. only make 77 cents to males' dollar despite the law. Plus, discussing salary with coworkers is always uncomfortable, and may be forbidden in some workplaces. Know if your wage fairly represents your experience, job duties and performance—and how to address it if you aren't earning a fair wage.

It’s important to advocate for yourself in the workplace; if you suspect you were let go for reasons that violate any of the above rights, you may want to consider legal action.

But how can you prove whether or not a superior's actions were acts of discrimination? It’s a good idea to have regular discussions with your boss about your expectations at work. When you have a clear outline of what's expected of you, you have more leverage to offer concrete evidence that you upheld your end of the bargain. Standing up for yourself in the workplace can help strengthen your career and help you move on from bankruptcy.

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Tuesday, April 27th, 2010

Looking for Work? More Companies Looking to Hire, Survey Says

As the weather warms up around the country, a new survey shows the job market may be starting to thaw.

A survey by the National Association for Business Economics released yesterday revealed the most optimistic job outlook in several years.

Business leaders said they expect to lay off fewer employees and hire more new workers in the coming months.

The survey was conducted from Mar. 25 to April 10, and spanned business leaders and members of the NABE, said the Associated Press in their report. Some numbers from the survey:

  • 22 percent of companies said they planned to increase payrolls, up from just 13 percent in January.
  • 37 percent expected to add employees in the next six months.
  • 13 percent expected to lay off workers. From the same survey in January 28 percent of companies expected layoffs.
  • More than half saw stronger demand in their industry.

Add these up and the job market looks much better than it did just a few months ago. Big industries like finance, insurance and real estate all said they had plans to add more new hires in the next few months than they were in previous quarters. Meanwhile, a mere 3 percent of survey respondents predicted "significant" layoffs, and many companies reported having more merchandise and materials on hand than previous quarters.

So if you're among the unemployed or underemployed it may time to dust off the resume and give it a workout, because companies have plans to hire more workers soon. It's unclear how much of an immediate impact this could have on bankruptcy filing rates.

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Saturday, January 16th, 2010

December Unemployment Unchanged at 10 Percent

The Bureau of Labor Statistics has released its most recent unemployment numbers (for December 2009), and they paint a gloomy picture of the U.S. job landscape.

While the actual unemployment rate and number of unemployed people in the country remain unchanged from the last recorded period (10.0 percent and 15.3 million, respectively), certain figures point to a dismal immediate future.

Unemployment by the Numbers

Here's a look at a breakdown of the current unemployment figures for the United States:

  • Adult men: 10.2 percent
  • Adult women: 8.2 percent
  • Teenagers: 27.1 percent
  • Whites: 9.0 percent
  • Blacks: 16.2 percent
  • Hispanics: 12.9 percent
  • Asians: 8.4 percent

While these numbers represent little movement in either direction from the BLS's last report, they also don’t paint the whole picture. For example:

  • Long-term unemployment continued its upward movement, reaching 6.1 million people who have been without work for 27 weeks or more, composing approximately 40 percent of the total number of unemployed people.
  • The number of underemployed people remains at 9.2 million – though these people are working, they have fewer hours than they’d like because of economic restraints.
  • A whopping 929,000 workers are considered "discouraged," meaning they’re out of work and they would like to work but have stopped looking for jobs because they believe none are available. A year ago, the number of discouraged workers was only 642,000.

Perhaps unsurprisingly, job losses continued in certain sectors (including construction, manufacturing and wholesale trade) and increased in temporary help services (likely from holiday hires).

Looking Ahead

So what do these numbers mean for the future of the U.S. economy and job market? Some analysts suggest the unemployment rate will actually get higher as the economy begins to pick up.

This may sound counter-intuitive, but makes sense upon closer examination: as the economic situation improves nationally, more people will likely enter the work force, believing more opportunities for work are available. And, even if more jobs do crop up, they may not keep pace with the number of new workers seeking employment.

For now, the problem of long-term unemployment continues to plague Americans: the average length of time without a job was 29.1 weeks as of December, which is apparently the highest average since 1948, when records were first kept. With that kind of prolonged job loss, it's no surprise that more than 1.44 million Americans filed bankruptcy last year, and even more are expected to in 2010.

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Friday, December 4th, 2009

Health Insurance for the Unemployed: A Costly Concern

Thanks to the health care overhaul bills currently working their way through the U.S. Senate and House of Representatives, the high cost of health insurance in America is on the public’s mind. And now, with a key provision of the stimulus bill expiring this month, another aspect of the health care dilemma has come to the surface.

Job Loss and Health Insurance

Because many Americans get medical insurance through their employers, job loss can be a double blow, meaning the loss of income as well as coverage. To address this concern, lawmakers included provisions for health insurance in the stimulus bill passed in February:

  • Subsidized coverage: The stimulus provided funds to reduce COBRA payments by 65 percent for those who wanted to keep their company’s health coverage after losing their jobs.
  • Limited offer: Naturally, the government assistance came with boundaries: to be eligible, people must have been laid off between September 1, 2008 and December 31, 2009. Further, subsidized coverage only lasts for nine months.

Because the measure went into effect in March of this year, thousands of unemployed Americans are now facing huge jumps in the cost of their health coverage.

In fact, sources indicate that the average affected family will see their costs soar $722 per month – from $389 to $1,111. In many states, that amounts to the vast majority of unemployment payments; in some states, it exceeds possible unemployment payments.

Hope on the Horizon: Bills in Congress

Luckily, the situation is not completely without hope. In fact, the Associated Press reports that Congress is currently considering bills that would add an additional $100 billion to unemployment benefits (including the COBRA subsidy).

Here’s a numerical breakdown of the proposed legislation:

  • $85 billion would be funneled toward extending emergency unemployment payments
  • $15 billion would fund the expanded health care coverage

In 2007, when unemployment hovered around 4.8 percent, about $43 billion was reportedly spent on unemployment costs.

While some measures of the economy suggest we’re pulling out of the worst of the recession, many experts still expect unemployment levels to remain high for another year or so, which means these problems likely won’t disappear any time soon. And as unemployment often leads to bankruptcy, it may signal more problems down the line.

Additional Resources

Special Report: Expiration of COBRA Subsidy (PDF)

Unemployed and Uninsured (PDF)

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Monday, November 9th, 2009

Orlando Shooting Suspect Had Recently Filed Bankruptcy

The suspect in the shooting in Orlando last week that left one dead and six injured had a checkered financial past—including unemployment and a recent bankruptcy filing.

In 2007, suspect Jason Rodriguez was fired from engineering firm Reynolds, Smith & Hills, the location of the shooting, according to The New York Times. According to Rodriguez's public defender, he believed his former employers were blocking his attempts to receive unemployment benefits.

Rodriguez filed Chapter 7 bankruptcy in May, 2009, listing assets of $4,675, mostly from an unreliable 2002 Nissan XTerra, and debts at $89,873.31, including child support, back taxes and student loans.

At the time of his bankruptcy filing, Rodriguez was working at Subway as a "sandwich artist", but recently quit the position due to shortage of hours, according to CNN.

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Thursday, November 5th, 2009

Senate Passes Unemployment Extension Bill

Unemployed Americans will receive up to 20 additional weeks of unemployment benefits under a bill passed by the Senate this week, according to CNN.

This is great news for the thousands of unemployed Americans who would possibly be nearing bankruptcy if this bill didn't pass.

The Senate voted 98-0 Wednesday to provide continued relief to the estimated 15 million Americans currently drawing unemployment benefits. The bill provides at least 14 additional weeks of benefits, and 20 weeks in those states where unemployment is 8.5% or greater.

The bill now moves to the House, which passed a similar bill in September providing up to 13 additional weeks of benefits. President Obama has shown support for extending unemployment benefits, and is expected to sign the bill.

In the Senate bill, benefits would be extended to those who exhaust their current benefits before December 31. Those whose benefits have already run out could reapply for additional benefits.

The additional unemployment would be funded by a supplemental unemployment tax on employers that would run through June 30, 2011.

7,000 Unemployed Lose Benefits each Day

CNN reports that 7,000 unemployed workers exhaust their benefits every day. And with just 3 million jobs for 15 million unemployed (a figure that doesn't include under-employed or those who've given up on looking), that rate isn't expected to slow soon—without help.

In September, the unemployment rate reached a 26-year high at 9.8%. October's unemployment rate, due out tomorrow, isn't expected to decline. Most experts expect unemployment to crest above 10% in 2010.

Unemployment and Bankruptcy

Unemployment is also closely tied with the bankruptcy filing rate. Personal bankruptcy filings reached a four-year high in October, with 135,914 consumer filings, most filed in court by bankruptcy lawyers, according to the American Bankruptcy Institute. That total is the highest since the new bankruptcy law went into effect in October, 2005.

Update: The House passed the Senate's unemployment benefit extension bill Thursday afternoon with a vote of 403-12. President Obama is expected to sign the bill Friday.

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Wednesday, November 4th, 2009

Layoffs: Johnson & Johnson to Cut 7% of Jobs

Health care giant Johnson & Johnson announced Tuesday that it would eliminate up to 8,000 jobs worldwide, or 7% of its workforce, as a cost-savings measure, according to CNN.

Many of the cuts will come from management levels as the company revises its corporate structure. As a result, Johnson & Johnson expects to save between $800 million and $900 million this year.

Johnson & Johnson manufacturers household health and beauty products, like soaps and mouthwash, along with pharmaceuticals and medical devices. The recession has impacted both sides of J&J's business. The layoffs come in a tough economic time as the company strives to remain profitable and avoid the possibility of bankruptcy.

The majority of the job cuts will occur outside of the U.S., according to CEO Bill Weldon, and will occur across all aspects of the business.

Johnson & Johnson's restructuring has been occurring over the past few years, as it attempts to fight off competing drug manufacturers and generic versions of its own drugs. In July, 2008, J&J cut 4% of its workforce. In April, 2009, about 900 U.S. sales jobs were eliminated.

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Posted in Finance 101: Secure Your Future | 1 Comment »

Monday, October 26th, 2009

Foreclosure Auctions Finding Few Bidders in Detroit

A recent auction of foreclosed and abandoned properties in and around Detroit, Michigan, saw only one-in-five properties sold—despite an opening bid of only $500.

Almost 9,000 homes and lots were on the auction block at the Wayne County tax auction, according to Reuters, with a total land area almost the size of Boston. At the end of the four-day auction, less than 1,800 properties were sold.

The auction was held by Wayne County to recoup unpaid property taxes, many for homes that had been abandoned or foreclosed.

With unemployment over 27 percent, Detroit is by far one of the hardest-hit cities in America. Detroit's population has dwindled from a peak of nearly 2 million in the 1950s to an estimated 800,000 today. Despite efforts by the city to revitalize the downtown, much of the city is turning into a ghost town, according to Reuters.

Detroit is struggling during the recession, with one of the highest bankruptcy rates per capita in the nation.

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Posted in Home Foreclosure | 3 Comments »

Tuesday, October 13th, 2009

High Unemployment Leading to Higher Job Competition

With unemployment teetering at 10% and many businesses reluctant to hire, it should come as little surprise that job competition is stiff. A new report by MSNBC shows just how stiff: there are currently 6.3 unemployed workers on average competing for each job opening.

According to the Department of Labor, job competition is up from 1.7 workers per opening in 2007, when the current recession began. DOL has been tracking job competition statistics since 2000.

Employers have cut a total of 7.2 million jobs since December, 2007, and while that rate is slowing, job creation is not expected to recover any time soon.

Many economists predict the unemployment rate to peak at 10% next year and remain at the current level throughout most of 2010, creating a difficult job climate for millions of competing unemployed Americans.

According to a September report by CNN, the federal stimulus has created or saved 1 million jobs, helping to stem the tide of unemployment.

Unemployment is a significant factor for many people filing bankruptcy. Those hardest hit by unemployment may soon find themselves with few other options to fight off mounting debts.

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Posted in Economic News: How Are We Doing? | 1 Comment »

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