Job Cuts Top 100,000 in January

NEW YORK (Reuters) - Planned job cuts in January were 26 percent higher than in December as U.S. jobs moved to countries like India, China and the Philippines, and as mergers made some jobs redundant, according to a report on Tuesday.

The outplacement firm Challenger, Gray & Christmas Inc., said post-holiday job cuts reached 117,556 in January surpassing the 100,000 threshold for the first time since last October.

Financial markets were on their toes awaiting January's payrolls report to be issued by the Labor Department on Friday after a disappointing December report that showed an increase of only 1,000 jobs.

Analysts had expected 150,000 new jobs to show up in the data, and the worse-than-expected outcome showed that the U.S. economic recovery has yet to produce sustained jobs growth. Economists again expect a figure of 150,000 new jobs in January.

Poor job creation is a headache for President Bush as he seeks re-election in November. The economy -- specifically job creation -- is expected to be a key issue in the campaign. Since Bush took office, more than 2.3 million non-farm jobs have been lost.

According to Challenger, consumer product companies led the January cutbacks with 22,775 job cuts, the largest number of reported job cuts in that sector in a single month since 1993, according to Challenger.

Challenger said one of the main factors for the job cuts in January was an increase of employers eliminating jobs in the United States and shifting to service providers in India, China and the Philippines among other countries.

Another factor was an increase in mergers so far this year. The survey's head, John Challenger, noted in a statement that one of those mergers will result in "as many as 10,000 job cuts to take place as redundant positions are eliminated."

Overlooking the fact that someone with a mortgage and 3 kids isn't going to survive "McDonald's or Walmart or the local frozen yogurt shop".

I didn't "overlook" that fact. Of course a person in the position you describe wouldn't survive that, without (for example) giving up their mortgage and moving into a cheaper place, i.e. apartment.

What you're saying is that this is a less appealing option than simply collecting unemployment. That's true. And, it's great. Because it means that we have a system where even when people get laid off etc., they can typically afford not to look for jobs at Walmart fro yo etc. for a long time, and still stay in the same homes. Isn't that great?

I'm still trying to figure out how all this adds up to "we must blame Bush"

Yes....last point first. I said nothing about Bush.

As for unemployment...I got laid off, collected for a while, and then found work as an independent contractor. In Illinois, after paying into the unemployment program for almost two decades, the rate I got (family, kids)...didn't even cover my mortgage payment. Forget other expenses. Fortunately I was frugal for many years and had capital to live on. Many people do not.

The issue here is not "can people survive". It is deeper than that. Far deeper. For example:

1st, our military depends upon taxes. Like or not, so do those other government programs. Someone who used to make 75K paid taxes. If they work at McDonalds - they don't. (Other than social security). They fall into the bottom tax bracket - which, with dependents, means they actually pay no federal income tax. At all. If this happens to enough people -- we see spending not being supported by taxes. A ballooning deficit. Followed by the depreciation of the dollar. Etc. Of course...the solution is to cut expenditures, by Congress. Which will happen when pigs fly.

2nd, this will gradually lead to falling housing prices (as more people suffer downsizing to their incomes, they won't pay those large dollars for houses. Hasn't happened yet. But it is inevitable). Many of those same people, suffering a smaller income, will have to sell their houses. But since most of them have little equity, and many will have negative equity, personal bankruptcies will rise. That is already happening. Guess what the biggest class of people who go bankrupt are? Turns out...families with kids.

3rd, this situation will not improve quickly. Interesting interview recently with the CEO of Intel. He made two important points. He said (a) people in the US now need to compete with 3 Billion educated people who have high speed telecommunications access. This will continue to suppress salaries in the US. And (b), the level of R&D investment is insuffient. For example, total R&D by the government of the life sciences is about 5 billion -- but the agricultural subsidies by the government is 35 to 40 billion. A serious problem.

"In an attempt to justify your own failures and bitterness, the only case you have made is for your own misery. Congratulations, you have convinced yourself. I, on the other hand, am happy and successful, in the greatest country on the face of the earth.
Loser."

Thank you for your informative and erudite response. I look forward to more of your wonderful insight.

Just tell me though how am I miserable, having a beatiful wife, doing a job I like, taking vacations all over the world, plenty of money in the bank...and in good health. Where do I display any bitterness or misery?
You're the one who is the angry divorced woman who relies on getting money from your ex-husband.
Here's some more of a random sampling of your intellectual wisdom:

Posted by M. Thatcher to jpsb 02/04/2004
"You are on crack."
"You, personally, are a loser.:

RE: Rush Limbaugh
M. Thatcher to blackie
"I have ignored the little vermin since October. I will ignore them again. But today, I'll defend this worthy man who means so much to me."

LOL Rush Limbaugh means so much to you?!! Wow you need some friends.

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