The Job Losses Begin

Popular Economics Weekly

“Trump’s arbitrary, capricious, and mercurial decisions about tariffs and everything else that affects the economy have made it impossible for employers to make even modest predictions about the future. So they won’t hire.” Robert Reich, Former U.S. Labor Secretary

FREDpayrolls

Total nonfarm payroll employment changed little in August (+22,000) and has shown little change since April, the U.S. Bureau of Labor Statistics (BLS) reported today. The unemployment rate, at 4.3 percent, also changed little in August. A job gain in health care was partially offset by losses in federal government and in mining, quarrying, and oil and gas extraction. BLS.gov

The Labor Department summary of the August unemployment report was misleading. There were lots of changes. Professor Reich, President Clinton’s former Labor Secretary, was just hinting at the damage Trump’s policies have wreaked since April 2 and the announcement of his tariff war on the rest of the world.

Job growth, for instance, since April has been a disaster. Revisions to past payrolls reveal that June private nonfarm payrolls lost jobs (-13,000) for the first time since the COVID-19 pandemic.

And the 22,000 total of new hires in August means that job growth has stagnated, since job growth is no longer keeping up with population growth, hence higher unemployment to come. The unemployment rate of 4.3% is a four-year high.

The Retail, Transportation, Education & Health, and Leisure/Hospitality sectors added a total of 88,000 jobs, which means that the rest of the economy lost -66,000 jobs, including the federal government (-14,000). It’s further evidence of the damage the DOGE government job cuts have done.

Consumers will be savings more and spending less for the holidays, which is a sign of slowing growth and even a recession, as I’ve been saying in past blogs.

Employers have stopped hiring because of the mostly illegal tariffs that may have to be refunded to importers, say the courts. The immigration raids are draining small businesses of workers, and the DOGE job reductions are cutting off the basic information that businesses need to operate; like weather predictions, medical information (vaccinations for babies and school kids).

There were never enough native-born workers to keep the job market growing, historically. It’s been the average one million per year influx of new immigrants that have filled the void of job vacancies historically.

Trump is also turning into Don Quixote with his irrational dislike of windmills. He is shutting down programs for future wind and solar power endangering future energy sources that AI will need to power the future economy.

There was other news that showed similar job weakness. The ADP, a private payroll processor, showed monthly payroll gain of just 54,000 jobs, down from 106,000 jobs in July.

And the U.S. JOLTS report of job hirings and separations was also negative for the first time since the pandemic. It estimates the actual number of monthly hirings and job losses. The number of people hired in July totaled 5.31 million, but the increase was almost entirely offset by 5.29 million “separations” —layoffs, job quitters, retirements, hence to real job growth.

This is while the Biden administration averaged 150,000 per month job increases during its four-year run.

The inflation component of stagflation is already happening, in spite of the Q2 jump in GDP to 3.1% that was mostly due to the drop in imports as the tariff taxes have begun to kick in.

“Trump promised to reduce prices, but prices continue to rise. Blame Trump’s tariffs. Prices for wholesalers rose at the fastest pace in three years in July, and those wholesale prices are now being passed on to retailers and consumers,” continued Professor Reich.

And consumers are also seeing rising inflation. The Personal Consumption Expenditures price index (PCE), the Federal Reserve’s preferred inflation gauge, rose 2.9% annually without volatile food and energy price changes, I said last week. That’s too high for the Fed’s target rate of 2% inflation that prevailed until the COVID-19 pandemic threw a monkey wrench in supply lines that are still recovering for most of the world.

The unemployment report is a huge eyeopener for Republicans who will attempt to explain it away as they did last month when Trump fired the head of the BLS that calculated the unemployment report. Job growth has quickly ground to a halt.

They and the American public will soon realize that allowing Trump’s massive tariffs without congressional consent isn’t working. It was a power play to increase his wealth and that of the Oligarchs that support him.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Who Opposes Overtime Pay Increase?

Financial FAQs

That’s a no-brainer—Republicans in Congress, of course. Who else would oppose updating the safeguards against working more than 40 hours without overtime pay, part of the New Deal that President Roosevelt called the most important part of the New Deal legislation since the Social Security Act of 1935?

Lawmakers in the House and Senate this week introduced the Protecting Workplace Advancement and Opportunity Act, legislation that will ensure the Department of Labor pursues a balanced and responsible approach to updating federal overtime rules, according to their press release. The sponsors of the legislation—members of the House Committee on Education and the Workforce and the Senate Committee on Health, Education, Labor, and Pensions—released the following statements upon introduction:

“In the 21st century workplace, we need to encourage policies that increase flexibility, reduce regulatory burdens, and create more opportunities for workers to pursue their dreams. Our nation’s outdated overtime rules are in need of modernization, but it must be done in a responsible way that doesn’t stifle opportunities for working families to get ahead. Unfortunately, the administration’s overtime proposal fails this test and should be sent back to the drawing board,” said House Subcommittee on Workforce Protections Chairman Tim Walberg (R-MI).

Sure, this when corporate profits have doubled from 6 percent of gross domestic product to 12 percent and more over the last 30 years, while wages have fallen by almost exactly the same amount, said former Labor Secretary Robert Reich in a recent NYTimes Oped.

Graph: EPI

 It is Repub’s reaction to the Labor Department’s proposal for new overtime rules that are expected to be introduced this summer—rules that require no congressional approval. 

According to the Economic Policy Institute, says Professor Reich, it would give 13.5 million more workers a new or stronger right to overtime pay — substantially increasing both middle-class incomes and employment. “It’s not as high as the $69,000 threshold it would take to return to 1975 levels, after adjusting for inflation, but it’s a courageous step in the right direction. It’s like a minimum wage hike for the middle class,” said Reich.

And opposing any boost to the minimum wage is of course the real target of Republicans. But minimum wages are rising, anyway. California, New York, and several cities have already enacted a $15 per hour minimum wage to be phased in over several years.

This tells us just how out of the mainstream are Republican lawmakers that have little, if any, interest in bettering living conditions of 80 percent of the workforce that are wage and salary earners.

Harlan Green © 2016

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Greater Lawlessness Causes Great Recessions

Popular Economics Weekly

We know Greg Smith’s unveiling of Goldman Sachs’ ‘culture’ of GS profits ahead of clients’ interests was nothing new. And that real laws were broken—from conflicts of interest to outright fraud. The 2010 congressional hearings unveiled much of the double dealing that was rationalized by Goldman Sachs’ buyer-beware code—its clients should be sophisticated enough to know that Goldman would try to maximize its own profits, before its clients’ profits.

But other laws were broken; as well as economic rules that govern sound business practices in the runup to the Great Recession. Pundits have traced the decline of Wall Street ethics from the morphing of partnership-owned investment banks to corporations, as well as the enormous growth of financial markets that bred outright greed.

But there is little mention of how it caused our economic decline into the Great Recession. What was behind this culture of greed and unethical behavior; a culture of greater lawlessness can be traced back to the early 1980s when President Ronald Reagan trumpeted that government was the problem and more private enterprise the solution for greater prosperity.

In attempting to downgrade governmental powers, conservative regimes in particular began to consciously disregard the laws of our land—from not enforcing existing regulations, to Iran-contra gun-running in President Reagan’s case, to abrogating international treaties such as START nuclear non-proliferation, and muzzling Department of Justice Attorneys General under GW Bush, to name just a few cases.

The number of convicted criminals in those administrations tells part of the story. President Reagan’s administration was marked by multiple scandals, resulting in the investigation, indictment, or conviction of over 138 administration officials, the largest number for any U.S. President.

And Salon.com had documented 34 incidents of law-breaking in just the first 4 years of GW Bush’s Presidency, the most blatant being unmasking covert CIA operative Valerie Plame, and its fabricated claims that Iraq had weapons of mass destruction.

But even more damage was done via blatantly disregarded economic laws of successive Republican administrations. It was really the attempt by Big Business to unravel the economic safeguards of the New Deal, first spelled out in Paul Krugman’s The Great Unraveling, by advocating massive budget deficits to pay for a Pax Americana—with especially severe consequences for the old and poor.

“Deficits don’t matter” was the infamous chant of Bush VP Dick Cheney. At a time when economic inequality had risen to levels last seen in the 1920s, these administrations wanted to divert attention from a vanishing social safety net by proposing the ago-old Darwinian solution—the free market. For only the fittest will survive in a world that is ruled by self-interest, rather than laws and regulations.

The United States, beginning in the 1980s once again became the most ardent advocate and practitioner of the oldest form of capitalism, now a primitive relic of 18^th century enlightenment. This is but one part of our aging democracy that U.S. hegemonists put up as the model for western civilization. But it is a very imperfect model for the rest of the world as well.

A 2002 survey of 38,000 people in 44 countries by the Pew Center for the People and the Press found what they think of our American Way. “Since 2000, favorability ratings for the U.S. have fallen in 19 of the 27 countries where trend benchmarks are available…pluralities in most of the nations surveyed complain about American unilateralism,” says the study. They think we disregard their interests in pursuit of our own self-interest.

Few dispute that our capitalistic economic system has won the day. It produces great wealth, particularly for those at the top of the wealth pyramid. Robert Reich’s book, “The Future of Success” said it best: “By the end of the (20th) century, the richest 1 percent of American families, comprising 2.7 million people, had as many dollars to spend after taxes as the bottom 100 million.”

But not for the 99 percent majority, in other words. Why so much greed, and willful lawlessness? This last happened in the 1920s run up to the Great Depression. Fear overruled both laws and common sense, so that the lobbyists of self-interest came to the fore. Our economy was being transformed from a rural to industrial economy, which drove workers into the cities. Wages plunged along with prices, and so did economic activity for more than 10 years. It was only the New Deal that brought benefits to the larger majority of citizens and leveled the economic playing field.

The same has happened today. Conservatives are again ignoring basic economic  truths in their attempt to destroy our working class as we know it, by passing laws that ban collective bargaining in states like Wisconsin, or right to work laws that say workers do not have to pay union dues even though they derive the benefits from belonging to a union. We know the results in Wisconsin after one year. Employment has plunged and is the worst of the Midwest states that surround it, according to the Economic Policy Institute.

Graph: EPI

It is no coincidence that those 23 states that have passed right to work laws are also the poorest states, with the highest income inequality, lowest educational achievement, and receive the most in public subsidies. Taking incomes and wealth away from workers in those states can only make them poorer in relation to other states and regions, and a continuing drain on public finances.

That is the real lesson of our greater lawlessness. By choosing to break laws and regulations that govern economic activity, economic activity is being pushed back to levels of past centuries. For workers will only have the incentive to produce more and better products and services when they have the incentive to do so.

In the end, such greater lawlessness means a disregard for everyone but one’s own clan or tribe, a greater selfishness, and no country can survive such a breakdown in social welfare. That is the lesson learned from the Great Recession. Policies that ignore economic as well as civil laws, that continue to divert incomes and wealth to the wealthiest, impoverish the majority.

Harlan Green © 2012