Monday, October 06, 2008

Recession? ... Depression? ... What is Going On? (Part 1)

USA 2008: The Great Depression
Food stamps are the symbol of poverty in the US. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive – a sure sign the world's richest country faces economic crisisBy David Usborne in New YorkTuesday, 1 April 2008
We knew things were bad on Wall Street, but on Main Street it may be worse. Startling official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.
Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.
The increase – from 26.5 million in 2007 – is due partly to recent efforts to increase public awareness of the programme and also a switch from paper coupons to electronic debit cards. But above all it is the pressures being exerted on ordinary Americans by an economy that is suddenly beset by troubles. Housing foreclosures, accelerating jobs losses and fast-rising prices all add to the squeeze.
Emblematic of the downturn until now has been the parades of houses seized in foreclosure all across the country, and myriad families separated from their homes. But now the crisis is starting to hit the country in its gut. Getting food on the table is a challenge many Americans are finding harder to meet. As a barometer of the country's economic health, food stamp usage may not be perfect, but can certainly tell a story.
Michigan has been in its own mini-recession for years as its collapsing industrial base, particularly in the car industry, has cast more and more out of work. Now, one in eight residents of the state is on food stamps, double the level in 2000. "We have seen a dramatic increase in recent years, but we have also seen it climbing more in recent months," Maureen Sorbet, a spokeswoman for Michigan's programme, said. "It's been increasing steadily. Without the programme, some families and kids would be going without."
But the trend is not restricted to the rust-belt regions. Forty states are reporting increases in applications for the stamps, actually electronic cards that are filled automatically once a month by the government and are swiped by shoppers at the till, in the 12 months from December 2006. At least six states, including Florida, Arizona and Maryland, have had a 10 per cent increase in the past year.
In Rhode Island, the segment of the population on food stamps has risen by 18 per cent in two years. The food programme started 40 years ago when hunger was still a daily fact of life for many Americans. The recent switch from paper coupons to the plastic card system has helped remove some of the stigma associated with the food stamp programme. The card can be swiped as easily as a bank debit card. To qualify for the cards, Americans do not have to be exactly on the breadline. The programme is available to people whose earnings are just above the official poverty line. For Hubert Liepnieks, the card is a lifeline he could never afford to lose. Just out of prison, he sleeps in overnight shelters in Manhattan and uses the card at a Morgan Williams supermarket on East 23rd Street. Yesterday, he and his fiancée, Christine Schultz, who is in a wheelchair, shared one banana and a cup of coffee bought with the 82 cents left on it.
"They should be refilling it in the next three or four days," Liepnieks says. At times, he admits, he and friends bargain with owners of the smaller grocery shops to trade the value of their cards for cash, although it is illegal. "It can be done. I get $7 back on $10."
Richard Enright, the manager at this Morgan Williams, says the numbers of customers on food stamps has been steady but he expects that to rise soon. "In this location, it's still mostly old people and people who have retired from city jobs on stamps," he says. Food stamp money was designed to supplement what people could buy rather than covering all the costs of a family's groceries. But the problem now, Mr Enright says, is that soaring prices are squeezing the value of the benefits.
"Last St Patrick's Day, we were selling Irish soda bread for $1.99. This year it was $2.99. Prices are just spiralling up, because of the cost of gas trucking the food into the city and because of commodity prices. People complain, but I tell them it's not my fault everything is more expensive."
The US Department of Agriculture says the cost of feeding a low-income family of four has risen 6 per cent in 12 months. "The amount of food stamps per household hasn't gone up with the food costs," says Dayna Ballantyne, who runs a food bank in Des Moines, Iowa. "Our clients are finding they aren't able to purchase food like they used to."
And the next monthly job numbers, to be released this Friday, are likely to show 50,000 more jobs were lost nationwide in March, and the unemployment rate is up to perhaps 5 per cent.
U.S. markets fall, tent cities rise
City agencies expect modern shantytowns to keep growing
Alexandra Shimo September 24, 2008
Hoovervilles sprang up across the U.S. in the 1930s, built out of cloth, boxwood, cardboard or scraps of metal and named after Herbert Hoover and his policies during the Great Depression. And while there are no such settlements named after George W. Bush's administration, tent cities are again sprouting up across the United States as the economy worsens.
A number of American centres have documented the problem, including Baltimore, Reno, San Diego, Santa Barbara, Fresno and Seattle. One of the larger settlements is in Ontario, Calif., about an hour's drive east of Los Angeles. There, about 140 people live in tents, motorhomes, trucks and cars, next to the Los Angeles International Airport. The population numbered about 400 in March, but authorities decided the settlement was too large and unmanageable and ejected about half of the residents, towing away vehicles and motorhomes.
Unlike many urban centres with tent cities, Ontario has tried to support the inhabitants, investing $3 million to deal with the homeless. Church groups donate tents, tarps and clothing, and distribute packaged food and bottled water. Local authorities have installed water taps, portable showers and toilets (although they tend to topple and spill in high winds). Authorities have even hired veterinarians to spray and neuter people's dogs, although some residents have complained that similar medical care is not available for their human owners. At night, people kept warm by burning garbage. City agencies don't expect these modern day shantytowns to disappear any time soon: few jobs, mounting foreclosures and higher gas and food bills means homelessness in the U.S. is on the rise.
In hard times, tent cities rise across the country
Since foreclosure mess, homeless advocates report rise in encampments
The Associated Press
Thurs., Sept. 18, 2008
RENO, Nev. - A few tents cropped up hard by the railroad tracks, pitched by men left with nowhere to go once the emergency winter shelter closed for the summer.
Then others appeared — people who had lost their jobs to the ailing economy, or newcomers who had moved to Reno for work and discovered no one was hiring.
Within weeks, more than 150 people were living in tents big and small, barely a foot apart in a patch of dirt slated to be a parking lot for a campus of shelters Reno is building for its homeless population. Like many other cities, Reno has found itself with a "tent city" — an encampment of people who had nowhere else to go.
From Seattle to Athens, Ga., homeless advocacy groups and city agencies are reporting the most visible rise in homeless encampments in a generation.
Nearly 61 percent of local and state homeless coalitions say they've experienced a rise in homelessness since the foreclosure crisis began in 2007, according to a report by the National Coalition for the Homeless. The group says the problem has worsened since the report's release in April, with foreclosures mounting, gas and food prices rising and the job market tightening.
"It's clear that poverty and homelessness have increased," said Michael Stoops, acting executive director of the coalition. "The economy is in chaos, we're in an unofficial recession and Americans are worried, from the homeless to the middle class, about their future."
Caught by surpriseThe phenomenon of encampments has caught advocacy groups somewhat by surprise, largely because of how quickly they have sprung up.
"What you're seeing is encampments that I haven't seen since the 80s," said Paul Boden, executive director of the Western Regional Advocacy Project, an umbrella group for homeless advocacy organizations in Los Angeles, San Francisco, Oakland, Calif., Portland, Ore. and Seattle. The relatively tony city of Santa Barbara has given over a parking lot to people who sleep in cars and vans.
The city of Fresno, Calif., is trying to manage several proliferating tent cities, including an encampment where people have made shelters out of scrap wood.
In Portland, Ore., and Seattle, homeless advocacy groups have paired with nonprofits or faith-based groups to manage tent cities as outdoor shelters.
Other cities where tent cities have either appeared or expanded include include Chattanooga, Tenn., San Diego, and Columbus, Ohio.
The Department of Housing and Urban Development recently reported a 12 percent drop in homelessness nationally in two years, from about 754,000 in January 2005 to 666,000 in January 2007. But the 2007 numbers omitted people who previously had been considered homeless — such as those staying with relatives or friends or living in campgrounds or motel rooms for more than a week.
In addition, the housing and economic crisis began soon after HUD's most recent data was compiled.
"The data predates the housing crisis," said Brian Sullivan, a spokesman for HUD. "From the headlines, it might appear that the report is about yesterday. How is the housing situation affecting homelessness? That's a great question. We're still trying to get to that."
In Seattle, which is experiencing a building boom and an influx of affluent professionals in neighborhoods the working class once owned, homeless encampments have been springing up — in remote places to avoid police sweeps.
"What's happening in Seattle is what's happening everywhere else — on steroids," said Tim Harris, executive director of Real Change, an advocacy organization that publishes a weekly newspaper sold by homeless people.
Homeless people and their advocates have organized three tent cities at City Hall in recent months to call attention to the homeless and protest the sweeps — acts of militancy, said Harris, "that we really haven't seen around homeless activism since the early '90s."
In Reno, officials decided to let the tent city be because shelters were already filled.
Officials don't know how many homeless people are in Reno. "But we do know that the soup kitchens are serving hundreds more meals a day and that we have more people who are homeless than we can remember," said Jodi Royal-Goodwin, the city's redevelopment agency director.
Those in the tents have to register and are monitored weekly to see what progress they are making in finding jobs or real housing. They are provided times to take showers in the shelter, and told where to go for food and meals.
Hopes for casino jobs dashedSylvia Flynn, 51, came from northern California but lost a job almost immediately and then her apartment.
Since the cheapest motels here charge upward of $200 a week, Flynn ended up at the Reno women's shelter, which has only 20 beds and a two-week limit on stays.
Out of a dozen people interviewed in the tent city, six had come to Reno from California or elsewhere over the last year, hoping for casino jobs.
"I figured this would be a great place for a job," said Max Perez, a 19-year-old from Iowa. He couldn't find one and ended up taking showers at the men's shelter and sleeping in a pup tent barely big enough to cover his body.
The casinos are actually starting to lay off employees.
"Sometimes I think we need to put out an ad: 'No, we don't have any more jobs than you do,'" Royal-Goodwin said.
The city will shut down the tent city as soon as early October because the tents sit on what will be a parking lot for a complex of shelters and services for homeless people. The complex will include a men's shelter, a women's shelter, a family shelter and a resource center.
Reno officials aren't sure whether the construction will eliminate the need for the tent city. The demand, they say, keeps growing.

Pawn shops thrive in hard times
By Rick Badie Thursday, March 27, 2008, 10:13 AM
The Atlanta Journal-Constitution
When it comes to the economy, here’s what Papandrea and Peacook have seen in recent months: a notable increase in the number of people who can’t make ends meet. They want to take out loans or hock something to buy gas and food. Familiar customers want bigger loan amounts; new ones want to trade something for cash.
It’s not just residents on the lower economic rungs who are finding their way to the shop on Buford Highway. Think electricians, mortgage brokers and investors. Everybody.
“They want money for their stuff, their jewelry and Rolexes,” Papandrea told me Wednesday during the Badie Tour. “I just got a truckload of furniture from a lady. She had to make a payment on something by 6 p.m. that day.”
For William Carroll, working at The Pawn Shop has been an eye-opener. He’s seen people looking to pawn drive up in a Mercedes Benz or Jaguar. They needed money for gas.
“I’m surprised,” Carroll said.
Apparently, some first-time customers are humbled to the point of embarrassment. In a pickle, they turn to what many consider a sleazy type of business that charges sky-high interest rates. One day, a struggling electrician brought in some tools.
“He had to have $400,” Peacook recalled. “He was so embarrassed. He couldn’t believe he was standing here. But he left here with a completely different view of pawn shops.”
In a dour economy, pawn shops write more loans, but the retail end of the business flutters. So in-store stock isn’t moving, but many pawnbrokers are processing more loans for larger amounts, said Jackie Kinlaw, president of the Pawnbrokers Association of Georgia.
Every customer I talked to at The Pawn Shop promised they’d be back for whatever they gave up to get a loan. In reality, though, Papandrea said about 50 to 65 percent of them never do. [Read entire article at:]
Pawnshops are cashing inThe stores are seeing a rise in customers as more financially strapped people seek quick loans.By David Pierson December 24, 2008,0,4228591.story

Reggie Pendleton was laid off last week and needed money to buy his wife and two young children Christmas gifts. So he turned to an increasingly popular option in this deepening recession -- a pawnshop.
On Tuesday, the former technology firm recruiter walked into Collateral Lender Inc. in Beverly Hills clutching a stainless-steel Rolex he had bought in better times for $3,300.
After an inspection by one of the store's appraisers, Pendleton was offered a $400 loan. He can buy back the timepiece within 4 1/2 months at a monthly interest rate of 18%.
Pendleton, 43, was hoping for more money, but a holiday without presents was unthinkable. So the Culver City father took the cash and headed for the mall to buy toys and jewelry for his family. "This will be the toughest Christmas," he said.
People have long turned to pawnshops as a source of ready cash during the holidays. Patrons bring in items of value and exchange them for money.
In turn, the shops hold the items for a state-mandated period. During that period, customers can reclaim their items by paying back the loan plus interest. But after that, the lender is free to sell them and keep the profit.
This year business is up, an indication of how much tougher this season has become for some. Collateral Lender has seen a 20% surge in customers over the last three months or about the same period the stock market tanked.
Traditional lenders have seized up, and people of all walks of life are handing over their diamonds, purses and golf clubs to make their next mortgage payment or, in some cases, pay their employees for the holiday season, pawnshop workers say."This whole period now is nuts," said Tal Shmargal, owner of Collateral Lender. "We have people taking loans just to keep their business afloat.
"It's a trend that's been reported nationally as the nation's economy continues its downward spiral.
Two of the nation's leading publicly traded pawn companies -- Ezcorp Inc. and First Cash Financial Services Inc. -- are among just a handful of stocks that have risen this year, up 31% and 20%, respectively.
"For a lot of people, we're the only source for money," said Dave Adelman, president of the National Pawnbrokers Assn. and owner of Jerry's Pawn Shop in Atlanta. "They can't go to a bank and get money because they won't lend. . . . Most definitely pawnshops are more busy. This time of year we're doing very well." [Read entire article at:,0,4228591.story]
Squeezed by prices, pantries ask help
Food banks seek $1 million boost for emergency aid
By David Abel, Globe Staff, May 3, 2008 The state's four food banks and its hundreds of food pantries, soup kitchens, and shelters are struggling to cope with rising food prices, increasing demand, higher fuel costs, and cuts in the state budget.
This spring, the price of spaghetti has jumped 63 percent from the same time last year, according to the Greater Boston Food Bank. A case of canned peaches costs $16.82, or 57 percent more. Also, the price of peanut butter is up 19 percent, and frozen ground turkey has climbed 10 percent above last year.
As the food banks seek suppliers for the more than 30,000 turkeys they distribute on Thanksgiving, they have found the wholesale price for a pound of turkey has jumped 38 percent. "We're in hard times," said Catherine D'Amato, president of the Greater Boston Food Bank, which provides about 20 million meals to 320,000 people a year.
"The dollar doesn't go as far at the grocery store, and if we have a higher percentage of people trading food money for rent, fuel, and medication, that means more people are going to pantries," she said. "There will be people who have never been to pantries before."
On Tuesday, D'Amato and nearly 100 others who oversee the distribution of food to more than a half-million people in Massachusetts every year will rally on Beacon Hill in an effort to persuade lawmakers to increase funds for the state's emergency food assistance program.
They want lawmakers to raise emergency food assistance by $1 million this fiscal year, to a total of $12 million, as it was last fiscal year. They are also urging lawmakers to increase emergency food assistance to $12.6 million for fiscal 2009.
"There are a lot of worthy programs out there, which we wish we could fund; but these are difficult economic times," said Lisa Capone, a spokeswoman for Governor Deval Patrick's administration. "On this particular proposal, the governor doesn't have a position. But . . . we will work with the Legislature to do the best we can to meet the people's needs."
A Greater Boston Food Bank survey last month of 25 agencies around the state found that 96 percent had an increase in demand. Of those, 58 percent saw demand rise between 20 percent and 40 percent.
Over the past year, the survey found, 52 percent of agencies ran out of food at some time. Fifty-eight percent reported a drop in donations.
Eighty-two percent of agencies reported difficulty buying protein; 52 percent had a tough time buying vegetables; and 35 percent had trouble purchasing canned goods and starches.
D'Amato said demand at the 600 agencies that his food bank serves has swelled between 10 percent and 30 percent. As food prices and demand increase, the food banks are also struggling with a rise in fuel costs.
Jean McMurray, executive director of the Worcester County Food Bank, said that without an increase in state or federal aid, her agency will have less food for the 70,000 people who seek its help every year. She said she worries that donations will fall as donors need more food for themselves.
Andrew Morehouse, executive director of the Food Bank of Western Massachusetts, said his staff and the 400 pantries they serve have seen a rise in the number of working people seeking help.
The food bank, which annually distributes about 5 million meals, received 39 percent less food from the federal government last year than in 2006, and he expects even less this year. To fill the gap, Morehouse said, he hopes to get a boost in donations from supermarkets, food drives, producers, and other sources.
"The bottom line is that unless we get relief, we're going to see increased prices and less food," Morehouse said. "We hope to get the relief."
David Abel can be reached at
Homeless Shelters: A Feeble Response to Homelessness
Betty Reid Mandell Beginning in 1983, emergency public shelters for the homeless began opening in cities nationwide. Over the next couple of decades, shelters grew from being a temporary emergency response to become a permanent shelter industry. There were 62,000 homeless shelters in the U.S. in 2002.
Most homeless shelters for individuals allow people to stay only at night to sleep. A reason frequently given for not allowing people to stay during the day is that the homeless are expected to spend their days looking for work and housing. There are a few day shelters, such as St. Francis House in Boston, where homeless people congregate and eat their meals.
There are specialized shelters for victims of domestic violence, for teen parents, for substance abusers, and for persons with HIV/AIDS. Some shelters provide services, such as a soup kitchen, job seeking skills training and job training, job placement, support groups, information and referral services, substance abuse treatment, early intervention programs, parental skills training, training for the GED, playrooms for children and volunteers to staff them. Haley House in Boston, a shelter for individuals modeled after the Catholic Worker houses of hospitality, trains residents to be bakers and they sell their products to the public. Kip Tiernan, a radical feminist who founded Rosie's Place, a shelter for homeless women in Boston, also founded a shelter for women with AIDS and a homeless women's chorus that performs at fund raisers. There are flowers on the table at the women's shelter, reflecting Kip's belief that people need beauty as well as bread ("Give me bread and give me roses.") Many shelters do not provide storage space for people's belongings. While I was doing outreach in a welfare office, I met a woman who was crippled with severe arthritis and had stayed overnight at a shelter for individuals. The shelter had no lockers, and she was carrying her belongings in a plastic bag. There was no guarantee that she would get a bed for that night because the shelter required people to line up at 4:30 p.m., and those who were first in line got priority for shelter.
Many homeless individuals will not go to a homeless shelter because they are crowded and dangerous. If there is no place to store belongings, they often are stolen. Some of the residents have emotional problems which are exacerbated, or caused by, their homelessness. To avoid these dangerous conditions, some people sleep in the streets, in parks, in their cars, RVs, or in train or bus stations. Some live in tents in the woods or build temporary shelters in out-of-the-way spaces in the city, which are often torn down by the city. Some homeless people prefer the freedom and privacy they have in their own encampments to rigidly controlled shelters. [Read entire article at:]
Shelters and Soup Kitchens Hold Crisis Front Lines By Heike Barkawitz
NEW YORK, Oct 9 (IPS) - Wall Street may be in the throes of agony, but business is booming at the Holy Apostles Soup Kitchen a bit farther north in the Manhattan neighbourhood of Chelsea. And that's not particularly good news. Just ask Ishmael, a young man who has been eating his meals at Holy Apostles for about three months now. "I come here in order to save money," he told IPS. "I do have a job, but still cannot afford to buy food every day." Ishmael also lives in a homeless shelter because renting an apartment is beyond his means -- perhaps not surprising in a place that boasts the highest housing costs in the United States, with an average rent of 2,400 dollars per month, according to the real estate data firm Reis Client Services. Across the city, New York's social services are troubled. Even as the weak economy drives more and more people to seek help in soup kitchens or shelters, advocates worry that the private donations they rely on will simultaneously begin to dry up. Rev. Elizabeth Maxwell, interim executive director of Holy Apostles, is unsure how the church will cope with an inevitable surge in clientele in the months and years ahead. "It's coming from both sides -- the demand is increasing, the need is increasing and at the same time, the resources are shrinking. Due to the financial crisis -- especially in a city like New York, where so much of the city's economy is tied to the fortunes of Wall Street -- city government is going to cut and state government has already cut." Maxwell said the Holy Apostles soup has already seen a "massive increase in the last year". "In July, we served more meals than in any month in our history -- an average of 1,353 meals each weekday -- and in August the average was higher than in any month in our history, and we're up 22 percent in the month of September from the previous September," she said. The number of children has increased by 18 percent, to over 14,000. Patrick Markee, a senior policy analyst at the Coalition for the Homeless (CFTH), told IPS that the number of homeless families in New York has now hit an "all-time record" of about 9,000. "Only this month, the number of families entering shelters increased again," he said, interpreting the situation as a "real sign of an economic downturn". Surviving in New York City without a decent salary can be an almost impossible task. Many adults in shelters share Ishmael's predicament -- they have jobs, yet still cannot afford housing, CFTH says. According to the Census Bureau's Housing Vacancy Survey, in 2005, one out of four New Yorkers spent half of their income on rent alone, leaving little left over for other necessities. "Many people in New York have to choose between food and rent or between medical care and rent," Rev. Maxwell told IPS. One out of five adults and one of four children in New York now live below the poverty line, which is 17,600 dollars per year for a family of three. This equals about two million people living in poverty, Markee told IPS. Speaking to IPS, many homeless people expressed anger at the government. Edward, 55, became homeless when his father died and didn't leave a will. Two hospitalisations left him 3,600 dollars in debt. The federal government sends a cheque for about 150 dollars a month that he can use for food, but it's not nearly enough, he said. Like Holy Apostles, whose budget is 2.7 million dollars, many of the city's estimated 1,200 non-profit soup kitchens and food pantries raise the vast majority of their funding from private individuals and foundations, with only a small percentage coming from the government. "We're very concerned, because people's ability to give is going to be very impacted by the financial crisis," Rev. Maxwell told IPS. "A lot of the foundations that we get money from certainly have a lot of their assets in stock market," added Mark Walter, Holy Apostles' development assistant. "So we don't know what's coming down the pike. New York State just cut its funding for hunger relief programmes by 16 percent and then a couple of months later, they announced that they would be decreasing it an additional six percent of the funds that have not already been spent." The Coalition for the Homeless also raises 60 percent of its funding from private sources, Patrick Markee told IPS. "We're definitely worried for contributions to go down with the financial crisis. Particularly after public holidays we get a lot of private donations. Now with the economy getting worse, these private donations might go down," he said, adding that the coalition would be highly dependent on donations due to an increased need. However, the funding has already been reduced. "We're hoping for the best and planning for the worst," Markee concluded. Throughout the country, homeless advocacy groups are reporting the most visible rise in homeless encampments in a generation. "The economy is in chaos, we're in an unofficial recession and Americans are worried, from the homeless to the middle class, about their future," Michael Stoops, acting executive director of the CFTH, said in a statement. The New York City government may soon be forced to resort to the emergency measure taken by authorities in Reno, Nevada, where a tent city has been erected to house those who have tumbled through the widening economic cracks.

The city's homeless shelter population has been mounting steadily for years, from 21,100 people per night in 1998 to 35,200 in April 2007, an increase of about 65 percent.
"This country is ass-backwards," exclaimed one man who gave his name as Robert. "The situation gets worse for the struggling individuals and only gets better for those who have money. This country is about to collapse and I'm pretty sure that there's going to be a revolt soon."

In hard times soup kitchen struggles to meet the needBy Hilke Schellmann
Volume 3, Number 10 The Weekly Newspaper of Chelsea December 5 - 11, 2008
At around noon last Monday, 13 tables in the nave of Chelsea’s Church of the Holy Apostles were packed with men eating lunch at one of the city’s largest public soup kitchens.
One visitor sat fully wrapped in a white cloth at the far side of the room, next to a golden microphone stand shaped like an eagle. He held a white napkin in front of his face while slowly eating his pasta. He didn’t touch the cauliflower or the carrots.
Next to him sat an older, African-African man with a white beard, collapsed cheeks and a wrinkled face that spoke of years of hard work.
At another table in front of the altar sat Craig Ryan. He stood out in a black blazer and didn’t mind taking the time to talk as he ate. Ryan had worked as a security guard for a subcontracting company at Bergdorf Goodman until four weeks ago, when he got laid off. He lost his apartment and has been sleeping outside or in a flophouse in Williamsburg. He depends on the Holy Apostles soup kitchen on Ninth Ave. for meals, he said, otherwise he couldn’t pay the $30 the hotel charges per night.
But Ryan is not the only person recently in need of a free meal, and Holy Apostles is not the only soup kitchen to see a rise in visitors during the economic downturn.
In a comprehensive survey on the subject released last week, the New York City Coalition Against Hunger found that across the five boroughs, emergency food programs are serving an average of 28 percent more people than a year ago. In November 2007, for instance, the volunteers at Holy Apostles served about 1,150 meals daily—a record number. That figure has risen by about 100 in November of this year.
“We are really worried,” said Reverend Liz Maxwell, Holy Apostles’ pastor, noting that operating the soup kitchen costs $10,000 a day. “Our numbers go up in a time when our donors have to cut back,” she said. “The foundations that help us have taken a hit.”
Assembly member Richard Gottfried recently proposed an increase in welfare benefits and state funding for emergency food programs, with the demand at soup kitchens and food pantries on the rise. Even with significant cuts looming as the state budget deficit grows, Gottfried supports taxing the state’s wealthiest residents to fund programs for its poorest citizens. He held a press conference at the church on Mon., Nov. 24, to call attention to the issue, noting that welfare benefits in the state have not been increased in 18 years and have fallen below 50 percent of the federal poverty level. The Assembly had included a 30 percent increase in welfare benefits in this year’s budget, but it did not make it into the final budget resolution.
On another recent day, soup kitchen chef Chris O’Neill was serving pasta with kidney beans and ground beef, tuna, potato salad, cauliflower, green beans and carrots. For the entrée, he cooked 100 pounds of pasta and 180 pounds of beef in a pair of 40-gallon pots. For dessert the guests had a choice of applesauce and fried apples with cinammon. A man named Carlos was eating at Holy Apostles for the first time but declined to give his full name, because he is an illegal immigrant from Peru. He sat enjoying the pasta dish, allowing simply, “The food is good. The pasta—mmm.”
By 12:30 p.m. the soup kitchen had closed for the day. The chef put the leftover food on a long table, and the 40 volunteers ate lunch together. Raymond Hernandez started volunteering four weeks ago and comes in twice a week. He heard about Holy Apostles’ soup kitchen six weeks ago, when he needed help.
“I started coming as a person who needed food,” Hernandez said, “and then I wanted to give back.” This summer he lost his apartment, and he depends on the food given out by the soup kitchen to survive. But the community of volunteers gives him hope: This year, Holy Apostles had to turn away 800 people who wanted to volunteer on Thanksgiving—a record number.
Economists Say: US recession will be long, severe
Philippine Daily Inquirer
Posted date: October 17, 2008
NEW YORK—The United States has not endured a deep and prolonged recession in more than a quarter century—enough time for many Americans to forget what one feels like.
But unlike the last two relatively short recessions, this one could be much longer and more severe, potentially bringing with it anxiety and job losses not seen in many years.
“In thinking about recessions, people will naturally think back to the last couple” in the early 1990s and in 2001, said Paul Ashworth, senior US economist at Capital Economics in Toronto. “What they should be looking back at is further.”
That requires dredging up memories of the economic slides in the 1970s when an Arab oil embargo starved the nation of energy, and the early 1980s when unemployment and inflation soared.
The last recession—coinciding with the collapse of the tech stock bubble and the terrorist attacks of 2001—lasted just eight months. It was known more for the slow “jobless” recovery that followed than for the depth of the downturn.
Many economists agree that America won’t be so fortunate this time.
“I don’t think we can escape damage to the real economy,” former Federal Reserve Chair Paul Volcker said this week in Singapore. “I think we almost inevitably face a considerable recession.” The Fed’s current chair, Ben Bernanke, delivered a more measured but similarly grave assessment to economists, saying the recent financial turmoil “may well lengthen the period of weak economic performance and further increase the risks to growth.”
The signs of stress are starting to show: The United States has lost 760,000 jobs since late last year, and retail sales in September plunged 1.2 percent, the largest drop in three years.
Every recession is driven by its own dynamic and psychology. The current slump started with the collapse in the housing market and got worse with sharp restrictions on credit that pressured consumer spending and businesses.
Different environment
That is a different environment from 1973 when an oil crisis was the culprit, squeezing US businesses and consumers. In the early 1980s, raging inflation and high interest rates took their toll.
Both periods saw millions of Americans out of work. In 1975, the unemployment rate peaked at 9 percent. In 1982, it jumped to 10.8 percent.
Most economists forecast a sharp increase in the number of people who lose their jobs. But they do not see it leading to unemployment on the scale of either the 1970s or 1980s.
The jobless rate is currently at 6.1 percent, and many economists expect it to rise to about 7 percent early next year—a level the country has not seen since 1993. Some analysts believe the unemployment rate could eventually climb close to 8 percent, which hasn’t happened since 1984. But this recession could begin to feel like those of the past not just because of lost jobs, but because of fear about the future. [Read entire article at:]
Perino Confirms White House Won't Extend Jobless Benefits, Says People Should Just Find A Job
By Ali Frick on Oct 8th, 2008
During today’s press briefing, White House press secretary Dana Perino suggested the Bush administration would oppose any effort to extend jobless benefits — a stance the White House has taken before. She explained their position by saying, “we want people to be able to return to the workplace as soon as possible.” The suggestion was that extending benefits somehow prevents people from returning to work.
She concluded by saying that “the best way to help” the economy and unemployed people is for unemployed people to simply “get back to work.”
It is both insulting and naive to suggest that people aren’t working because jobless benefits are somehow too generous and they’re too lazy to look for work again. People aren’t working because Bushonomics have hemorrhaged jobs and slashed the safety nets for laid off workers:
– The Department of Labor reported last week that the country shed 159,000 jobs in September, and the unemployment rate has increased to its highest level in five years.
– The Washington Post reported yesterday that “unemployment claims are at a seven-year high, and factory orders are sharply down. … Small businesses can’t get financing.”
– According to a July survey by the National Conference of State Legislatures, states are being forced to slash spending and cut jobs “in order to close a projected $40 billion shortfall in the current fiscal year,” more than triple the size of the previous year’s.
State jobless funds are drying out. According to the National Employment Law Project, at least 11 states are facing financial challenges paying their jobless benefits.
The Bush administration’s refusal to extend a helping hand to those punished by the economy it created is nothing new: Last month, the White House threatened to veto a second stimulus package over opposition to an expansion of food stamps benefits.
Q You mentioned earlier about the pain everybody is feeling as a result of all this. Well, the House passed an unemployment extension bill, which would extend unemployment for all states for seven weeks, and for those that have high unemployment, above six percent, for an additional 13. Would the White House support this bill?
MS. PERINO: Well, Paula, I don’t even think — Congress is not even in session, so there’s no legislation moving through Congress. We have supported unemployment benefit extensions in the past, although we wanted a shorter period of time than many had wanted. I don’t know if there’s some people recommending a 26-week extension. We cut that back to 13 weeks back in June. One of the reasons that we did that is because we want people to be able to return to the workplace as soon as possible.
So unless legislation starts moving that I’m not aware of when Congress isn’t here, I don’t know how we could support it.
Q The Senate comes back in November — November 17th –
MS. PERINO: Well, let’s take it up then, Paula. I mean, it’s October 8th; there’s a long way to go between now and then.
Q I know, but in the meantime, there are people that won’t have unemployment checks between October 15th –
MS. PERINO: Well, my point is, Paula, that one of the things that we want is we want people to be able to return to work. We understand that there are people that are hurting, but we’ve already extended the unemployment benefits. But if legislation isn’t moving between now and November 17th, if then, there’s not a lot that we can do in terms of getting a law passed.
Q So you assume that in states that have high unemployment that those people will be able to find jobs between October and –
MS. PERINO: I hope that everybody who wants to find a job is able to find a job. I can only imagine the anxiety for people who are looking for a job and can’t find one. And it’s hard to put myself in their shoes because I haven’t been in that situation. But obviously states — and there are many of them — that have high unemployment rates have a lot of people who are suffering. But getting back to work would be the best way to help all of us, collectively, them individually, and then us as a country.

U.S. Unemployment Worsens
by Tula Connell, Oct 5, 2007
What does it mean when the number of jobs in September goes up, but the nation’s unemployment rate worsens?
One thing for sure is that the major media will emphasize the increase in jobs, even though that increase was not sufficient to staunch the souring unemployment numbers.
The U.S. Department of Labor today released the September jobs report that shows 110,000 workers were added to payrolls last month, but unemployment went from 4.6 percent to 4.7 percent, the worst unemployment rate since the summer of 2006.
As Bonddad notes:
The devil’s in the details, so let’s see what the inside story of this number is.
Construction: -14,000Manufacturing: -18,000
This shouldn’t surprise anyone. The housing sector has been dropping like a stone for the last year. While commercial construction has helped to absorb the displaced workers, that will eventually only go so far. It looks like we are at the point.
71.81 percent of the jobs created (44,000 + 35,000) were lower paying. In addition, when we take government out of the equation (which gives us 73,000 total), pretty much the majority of jobs created is lower paying.
Bonddad’s point about the type of jobs being created is key. Jobs can be plentiful, but if you need three of them to pay your bills, something is seriously wrong.
Although today’s jobs figures revised to 89,000 the number of jobs added in August, after initially reporting a net loss of 4,000, and wages finally rose, not even mainstream economists believe the economy is strong. Yesterday, the Labor Department said jobless claims rose 16,000 to 317,000 in the week ended Sept. 29, a bigger jump than analysts anticipated. Meanwhile, the U.S. Department of Commerce reported that orders to U.S. factories fell in August by 3.3 percent, slightly worse than expected and the largest amount in seven months. And we all know the housing sector is tanking. The Wall Street Journal reports:
Demand for previously owned homes tumbled in August to the lowest level in five years as mortgage-market troubles hurt sales. Home resales fell to a 5.5 million annual rate, a 4.3 percent decline from July, the National Association of Realtors said. In a separate report, the S&P/Case-Shiller index showed the decline in U.S. home prices accelerated nationwide in July, posting the steepest drop in 16 years.
This week, The Wall Street Journal also ran two front-page articles on polls showing growing unhappiness among Republicans over the GOP’s fiscal policies, with Republicans even questioning the party’s unqualified support for so-called free trade.
Bush’s record is so bad, it’s a good time to burst the myth that Republicans are better at running the nation’s economy.
Robert Weiner and John Larmett do just that in a searing post whose head sums up their findings: “A Simple Fact: Republicans Can’t Manage the Economy.” They take a look at the economic records of Democratic and Republican presidents back to Harry Truman and Dwight Eisenhower. Here are a couple of their findings:
The economy added 10 million jobs under Jimmy Carter despite high inflation; Carter ranks first in job creation next to Clinton during just four years in office. Carter also reduced government spending as a percentage of GDP [Gross Domestic Product].
George H. W. Bush had the poorest record for both GDP and income growth. During his single term, the deficit ballooned (from $152 billion to $255 billion) more than under every president but his son and Ford.
But if Bush Jr. was looking to outdo dad, his economic record is resoundingly worse than his father’s—and every other recent U.S. president.
Bragging about a $239 billion deficit sets such a low standard that Bush can claim horrific failure as a good thing for the country. The Bush administration’s annual loss of three-quarters of a trillion dollars is unprecedented. Bush presided over the loss of 2 million American jobs in his first 2-1/2 years and has net gained 5.6 million in six years, the worst since Hoover. Clinton created 23 million jobs.
U.S. Jobless Claims Reach Seven-Year High of 516,000
By Bob Willis
Nov. 13 (Bloomberg) -- First-time claims for U.S. unemployment insurance rose last week to the highest level since September 2001, when the economy was last in a recession, as weakening demand led companies to fire more workers.
Initial jobless claims increased by 32,000 to a larger- than-forecast 516,000 in the week ended Nov. 8, from a revised 484,000 the prior week, the Labor Department said today in Washington. The total number of people on benefit rolls jumped to the highest level since 1983.
Restrictive credit and slumping demand are causing companies to retrench by trimming payrolls and investment. Rising joblessness will further squeeze consumer spending, which accounts for more than two-thirds of the economy, and threaten a protracted downturn, economists said.
"The labor market is only reinforcing a very pessimistic picture,'' Linda Barrington, a labor economist at the Conference Board, said in a Bloomberg Television interview. "When you start to see the downward pressure on wages as well as the credit crunch, that's only going to make consumers much more nervous.'' [Read entire article at:]
Jobless claims overwhelm state officesThe unemployment rate rose to 7.2 percent in December
By Ron Scherer Staff writer of The Christian Science Monitor
from the January 12, 2009 edition
New York - Officials at state unemployment offices say they've never seen anything like it: Layoffs are happening so fast that those seeking unemployment benefits are overloading state computer systems, jamming phone lines, and making it necessary for administrators to hire temporary workers.
In some states, it's so bad officials suspect that only half the calls are getting through. Frustrated, the unemployed are e-mailing anyone they can find at the state agencies or are just hitting redial on their phones, sometimes hundreds of times. The problem will get worse before it gets better, say some officials.
"For the last six weeks, we have seen the highest [number of] weekly claims since we've been keeping records in 1985," says Mike Cullen, Colorado's unemployment insurance director.
"And they are increasing at an increasing rate," Mr. Cullen says.
Last Friday, some of this surge at state offices was reflected in the Department of Labor's monthly jobs report: In December, it said, the unemployment rate hit 7.2 percent, up from 6.7 percent in November. And employers shed 524,000 workers after letting go of 584,000 in November.

The job-loss total for all 2008 was 2.6 million, the most since 1945.
Fall of US auto giants to cost Canada 600,000 jobsDecember 17th, 2008 - ICT by IANS
Toronto, Dec 17 (IANS) The collapse of the three big American carmakers could cost Canada more than 600,000 jobs, a report by the Centre for Spatial Economics has warned. According to the report published Tuesday, 323,000 Canadian jobs could disappear immediately if the US administration failed to bail out General Motors, Chrysler and Ford. Auto manufacturing is a pillar of the Canadian economy.
Ontario province, which is Canada’s economic engine accounting for more than 40 percent of the national economic output, will loss more than 280,000 jobs immediately if the big three were to go under.
Canadian plants, which account for 15 to 20 percent of the total output by the three American auto giants, are mostly based in Ontario province which also supports 40 percent of the Canadian population of 33 million.
To save auto jobs, the Canadian government has proposed a proportionate $3.5 billion package for the struggling sector - against the $15 billion rejected by the US Senate.
The report warned that the collapse of the auto sector will have a deadly effect on other sectors of the economy, including retail and services.
Amid this gloomy scenario, Canadian Prime Minister Stephen Harper warned about the possibility of a depression.
“It could be, but I think we have learned enough about depression, we have learned enough from the 1930s to avoid some of the mistakes that caused a recession in 1929 to become a depression in the 1930s,” the prime minister told a television network.
“The truth is, I’ve never seen such uncertainty in terms of looking forward to the future. I am very worried about the Canadian economy,” he added.
The prime minister has proposed to earmark billions of dollars for spending in the budget next month to ease recession.
Meanwhile, the Canadian dollar - the loonie - made some gains against the US dollar with the Federal Reserve announcing cuts in interest rates to a record low of zero to 0.25 percent.
The loonie jumped as high as 2.25 percent against the greenback, to close at 83.21 cents US - a net gain of 2.02 percent in a single day.
Majority of States Now in RecessionIn March, 5 States Were in Recession; Now There are 27 With 14 More at RiskBy Scott Materowitz
ABC NEWS, Business Unit
Oct. 21, 2008—What started out as a housing problem in a few states has now exploded into a full-fledged recession with a majority of states now in or dangerously close to recession.
Just this weekend, President Bush's top economic advisor used the much-avoided word "recession" to describe the economies in some states.
"We are seeing what I think anyone would characterize as a recession in certain parts of the country," Edward P. Lazear, chairman of the Council of Economic Advisers, said on CNN's "Late Edition."
Back in March, Mark Zandi, chief economist and co-founder of Moody's, said that only five states were in recession: Arizona, California, Florida, Michigan and Nevada.
Now, he said that 27 states are in recession and another 14 are near recession.
"There's no way around the map. It says the nation is in recession. The recession is coast to coast," Zandi said. "Just a handful of states are expanding at this point. One of the unique features of this downturn is how broad-based it is, regionally."
What happened between March and today?
"The job market has eroded measurably and industrial production has weakened sharply in the last couple of months. Those are the two key things. The other thing is that retail sales have also sharply weakened," Zandi said.
The one bright side is part of the middle of the country. Agriculture and energy are still strong and providing jobs.
Maryland, Massachusetts and New Hampshire are still growing and that is because of health care and educational services.
"In the past, in recessions, you saw people moving from areas that were hard hit, to areas that were holding up better, looking for jobs and better incomes," he said. "Now, there is nowhere to go."
High Unemployment
David Wyss, managing director and chief economist at Standard & Poor's, said the worst problems are in the old rust belt, Michigan being the worst hit. The state now has the highest unemployment in the country.
"The recession began, really, with the housing sector and then also very quickly with automobiles," Wyss said. "The states that have been hardest hit have been the manufacturing states, in large part because of what happened with cars."Click Here to Learn More About the Economy in Your Home State
Now the recession is spreading to other states where the housing bubble never burst. For instance, Wyss said, the Boeing strike is starting to drag down Washington state's economy and spread over into Oregon.
"The exception is the part of the country between the Mississippi River and the Rockies, which is still doing pretty well," he said. "High farm prices are good if you are in Iowa. High oil prices are good if you are in Houston."
Peter Morici, an economics professor at the University of Maryland, said a decline in manufacturing is really hurting the rust belt. That said, the economy still is very regional and industry-specific.
"It always varies. Even during the Great Depression, there were people that hardly felt it," Morici said. "Recessions and depressions always have varying effects on people and locations."
Agriculture is doing well because of ethanol development and a growing demand for grains by people in Asia.
Budget Shortfalls
Several state governments already face major budget shortfalls.
"The state governments are an exercise in irresponsibility. Through the property boom, they enjoyed the increase in people's assessments," Morici said. "They are just not structured to handle the cynical movements in their revenue the way they should be.
"Just like companies, municipalities can behave irresponsibly in good times, not shore up any money for bad times and then go crying to the federal government when they need cash," he added.
Casey Mulligan, an economics professor at the University of Chicago, said a lot of regions have a few industries. When those industries suffer, the whole area tends to. Take New York City, which is now hurting because of troubles in the financial sector based there.
One bright spot on the economy: consumer goods. Brands like Coca-Cola and General Mills are doing well, Mulligan said, in particular, thanks to strong international growth. The large high-tech companies also appear to be doing well.
"It's true in all recessions and booms," he added, "that there are some places that don't participate."

Homeless Family Living and Sleeping in Car
Layoffs spreading across corporate AmericaFri Oct 17, 2008 4:52pm EDT
By Scott Malone and Jim Finkle - Analysis
BOSTON (Reuters) - Shock waves from the global financial crisis are now being felt in almost every corner of working America as companies press the eject button on increasing numbers of employees.
While the ax has been falling for months in the financial and home-building industries -- where the current economic downturn started -- as well as the Detroit auto industry, makers of everything from soft drinks to water filtration systems have unveiled hefty rounds of job cuts in recent weeks as they brace for what some predict could become a long and deep recession.
In the past week alone, companies including PepsiCo Inc and Danaher Corp said they would lay off thousands of workers, while the state of Massachusetts disclosed plans to cut its payroll by 1,000 as it faces a tax shortfall.
The situation is poised to worsen as the holidays approach and many businesses scrutinize budgets for the coming year. The sad truth is that Christmas layoffs are common in tough times.
"It's a fairly grim outlook," said Michael Goodman, director of economic and public policy research at the Donahue Institute of the University of Massachusetts. "I don't know of any sector of the economy that will be spared."
A four-week moving average of new U.S. government jobless claims last week hit its highest point in seven years.
Ed Yardeni, chief investment strategist for Yardeni Research, is hoping that the U.S. government's $700 billion bailout package will slow the job cuts.
"If this rescue plan doesn't work, then... you could see something much worse that could feel like a recession or a depression, with all sorts of people losing jobs," Yardeni said.
A survey of more than 100 chief financial officers and other senior executives -- conducted Wednesday -- found 56 percent expect to reduce payrolls over the coming year. A majority polled by CFO Magazine also predicted falling revenues and plan to cut operating costs by at least 5 percent.Cuts, Fear SpreadWorkers are scared. Some 47 percent polled last month by Workplace Options said news of the financial crisis made them fearful about job security, and 25 percent said they had begun scanning help-wanted ads or updating their resumes.
"I'm being more conservative about spending -- I'm concerned," said Donald Gaunt, a 52-year-old construction worker from Smithville, Rhode Island, who said he has enough work to last through the end of this year but wasn't sure about 2009. "It hasn't been this bad since the early 1980s."
Workers in the financial sector, as well as those involved in home building and at the struggling Detroit automakers, have already been hit by round after round of layoffs.
The failure of investment banks Lehman Brothers Holdings Inc and Bear Stearns Cos resulted in tens of thousands of people losing their jobs, but even banks that have survived the crisis, including Bank of America Corp and Citigroup, have cut head count dramatically.
General Motors Corp said this week that it would close plants in Michigan, Wisconsin and Delaware and cut more than 4,000 jobs.
The cuts are spreading into other sectors:
* PepsiCo on Tuesday said it would cut 3,300 jobs, almost 2 percent of its work force, in a bid to cut costs.
* Danaher, which also makes Craftsman tools, said on Thursday it would lay off 1,000 workers and close 12 plants.
* Rockwell Automation Inc said it would lay off about 3 percent of its staff, or 600 people. That news came on September 30, the last day of the U.S. manufacturer's fiscal year.
* Textron Inc, the world's largest maker of corporate jets, said an unspecified number of jobs would be cut as it scales back its financial operation.
* Leggett & Platt Inc, which makes bed springs and store shelving, said it was cutting back hours at some factories and, in the words of Chief Executive Dave Haffner, "must move to reduce staff. We are already doing so." It did not disclose the number of jobs it plans to eliminate.
Few Other Choices
Temporary employment may also prove harder to find. Consumer electronics retailer Best Buy Co, which normally bulks up staffing in the holiday season, plans to cut seasonal hiring by as many as 10,000 workers this year after hiring about 26,000 in 2007.
"When we see job losses and rising unemployment, this does not just affect those who lost their job," said Lawrence Mishel, president of the partly labor-funded Economic Policy Institute think tank.
"Wages grow more slowly when there's higher unemployment, so the downturn will be affecting most working families through reduced hours of work," said Mishel. "This is not something that affects a small part of the workforce."
With the pace of layoffs picking up, the cycle becomes a vicious one, pressuring consumer spending and hurting home values yet again.
"As people lose their jobs, they cut back on their consumption, and people are less able to afford their mortgages, which are already strained," said Ron Blackwell, chief economist at the AFL-CIO, the largest U.S. labor federation. "And so people lose their houses, which continues to aggravate the financial problems. So it's reinforcing in that way and it's also spreading.
"This recession -- and I didn't see it this way a month ago -- is going to be global in scope," Blackwell said.
(Additional reporting by Nick Zieminski in New York; Editing by Brian Moss)
© Thomson Reuters 2008. All rights reserved.
For car dealers, tight credit is fueling a 'catastrophe'By Sharon Silke Carty and Chris Woodyard, USA TODAY
DETROIT — They may be folks you love to hate, but it's hard not to have sympathy for car dealers these days. These business owners are manning the bucket brigades in an auto industry meltdown.
"Things are going disastrously," says Ray Ciccolo, owner and CEO of Village Automotive Group in suburban Boston. "Most car dealers were down over 30% last month, and that is a catastrophe."
Many won't survive. Almost 600 of the about 20,000 U.S. new car dealers have shut their doors this year, and an additional 2,000 will close within 18 months, predicts Mark Johnson, president of a Seattle consulting firm that helps auto dealers buy, sell or merge operations.
In September alone, 61 dealers — two a day — closed shop or downsized to used car lots, says the National Automobile Dealers Association (NADA). Wounded by gas prices that killed sales of their most profitable SUVs and trucks, dealers are being hammered as the economy depresses sales of all models.
Even people with good jobs feel poorer and less confident to take on years of payments for a big purchase. Those who still would are finding it harder to get credit — General Motors credit arm GMAC now requires a credit score of 700 or better for a car loan.
Banks' reluctance to lend also is squeezing the dealers, who need regular loans (called "floor planning") to finance inventory.
"This is a very big, complex issue that's all wound up around itself," Johnson says. "We are definitely up to our neck in this."
Not helping: September sales showed that despite easing gas prices, many buyers still want gas-stingy and cheaper small cars — which have small profit margins — or demand huge discounts on trucks, SUVs or luxury cars.
That's if they're shopping at all. A poll done by WPP Lightspeed this month found that only 10% of Americans plan to buy a car in the next three months.
It may be hard not to gloat when a car dealer gets the short end of the deal, but when they go out of business, that can be bad news for consumers. Fewer dealers fighting for your business means you'll end up paying more for cars.
The plight of car dealers is being watched closely by economic analysts because vehicle sales are a key indicator of the economy's health. The auto industry overall supports one in 10 U.S. jobs, according to the Alliance of Automobile Manufacturers. Dealers alone employ more than 1.1 million and generate nearly 20% of retail sales in most states.
Fewer sales by dealers lead to cuts in auto production. Fewer hours or jobs for assembly-line workers. Fewer parts required from supplier companies. Fewer hot dogs sold to shift workers in plants across the nation.
Not to mention more defaults on mortgages — which got the ball rolling on this economic mess in the first place. [Read entire article at:]
Retailers Report a Sales Collapse
November 7, 2008
Sales at the nation’s largest retailers fell off a cliff in October, casting fresh doubt on the survival of some chains and signaling that this will probably be the weakest Christmas shopping season in decades.
The remarkable slowdown hit luxury chains that sell $5,000 designer dresses as badly as stores that offer $18 packs of underwear, suggesting that consumers at all income levels are snapping their wallets shut.
Sales at Neiman Marcus, the luxury department store, dropped nearly 28 percent in October compared with the same month last year. Sales fell 20 percent at Abercrombie & Fitch, nearly 17 percent at Saks, 16 percent at Gap and nearly that much at Nordstrom.
Of the more than two dozen major retailers that reported on Thursday, most had sales declines at stores open at least a year, the majority of the decreases in double digits. Deep discounters like Wal-Mart and BJ’s Wholesale Club reported gains.
Consumer spending represents two-thirds of the nation’s economic activity, and analysts said the striking sales declines at retailers almost certainly portended an extended, severe recession. The reports highlighted once again the depth of the economic problems confronting President-elect Barack Obama.
Consumers are cutting their spending for many reasons, but high on the list is the weakening employment picture. Even people who still have jobs are pinching pennies as they hear of layoffs among friends and family. Unemployment has hit 6.1 percent, and a new jobs report due Friday is expected to show further deterioration.
Bankrupt and ailing retailers are undercutting some of their healthy peers. Last week, for instance, Mervyn’s announced a 149-store liquidation sale just in time for the holidays. Other such sales are already under way at Steve & Barry’s and Linens ’n Things. Circuit City, the struggling electronics chain, began liquidation sales this week at 155 stores it is closing.
Mr. Cohen of NPD Group said wise retailers would not sacrifice profits just to shove goods out the door. But he acknowledged that in such a panicky climate, the race to discount merchandise had become nearly unstoppable.
“What’s happening is the retailer is almost saying, ‘Please just come in,’ ” he said. “ ‘We’ll pay you to shop.’ ”[Read entire article at:]
Microsoft Cuts 5,000 Jobs as Recession Curbs Growth
By Dina Bass
22 January 2009
Jan. 22 (Bloomberg) -- Microsoft Corp. will cut as many as 5,000 jobs, the first companywide firings in its 34-year history, and said sales and profit will probably drop as the recession eats into software demand. The stock fell the most since 2000.
The reductions, about 5 percent of the workforce, will take place in almost all areas and help save $1.5 billion a year, the company said today in a statement. Microsoft also posted second- quarter sales and profit that missed projections, prompting the company to pull its full-year forecast.
Chief Executive Officer Steve Ballmer is under pressure to reduce costs as personal-computer sales slow and companies curb software purchases in what may be the worst recession since World War II. Microsoft’s Windows division, about a quarter of revenue, suffered a sales decline that surprised the company as customers opted for machines with cheaper versions of the operating system.
“People aren’t buying PCs,” said Kimberly Caughey, senior equity analyst at Fort Pitt Capital Group Inc. in Pittsburgh, which owns 361,685 Microsoft shares. “They’re taking quick action to right-size their company. This is really only 22 days after the close of the quarter, and they must see deteriorating conditions.” [Read entire article at:]
Sony profits fall 95 percent
January 29, 2009
TOKYO, Japan (CNN) -- Sony blamed the global economic slowdown, increased competition and an appreciating yen for a 95 percent drop in third-quarter profits, as the company announced its results Thursday.
Profits for the quarter, which ended December 31, fell from nearly 200 billion yen ($2.2 billion) in 2007 to about 10 billion yen ($110 million) in 2008.
Across the company, sales were down 25 percent, but electronics and games sales were especially hard hit.
Sales of games, including the company's popular PlayStation series, fell 32 percent over the year. Sales of electronics decreased by nearly 30 percent.
The appreciation of the yen also cut into profits.
A stronger yen makes Japanese products more expensive or forces companies to lower their profit margins to keep prices the same.
Last week, Sony warned that it will close out the fiscal year, which ends March 31, with an operating loss of 260 billion yen ($2.9 billion), its first in 14 years.
Disney/ABC TV Group cuts 400 positionsThe Associated Press
Friday, January 30, 2009
LOS ANGELES: The Walt Disney Co.'s television division is cutting 400 jobs, or about 6 percent of the unit's work force, due to the slumping economy.
The cuts include 200 layoffs, while another 200 vacant positions will not be filled in a division that employs 6,500 to 7,000 people, said a Disney executive who spoke on the condition of anonymity because the number of job cuts had not been made public.
The job reductions, to be implemented in the coming months, were the latest announced at the family entertainment company, which is grappling with weak consumer sentiment and a declining advertising market.
Anne Sweeney, the president of the Disney/ABC Television Group, informed staff of the layoffs in a memo sent out Thursday.
"After months of making hard decisions across our businesses to help us adjust to a weakening economy, we're now faced with the harsh reality of having to eliminate jobs in some areas," Sweeney wrote. "I realize this is an extremely difficult day for everyone in our group."
Her memo did not put a number on the job cuts.
The eliminated positions were at all levels and made across the group, which includes the ABC network, ABC Studios, and cable channels including Disney Channel, SOAPnet and ABC Family.
The announcement came a day after the top executive at ESPN, another Disney property, told employees that 200 jobs will be cut within a year, mostly from open unfilled positions, and that the unit will implement a freeze on hiring and executive pay raises.
ESPN chief George Bodenheimer told employees Wednesday that the economy was worsening, "and ESPN and our business partners — especially some of our major advertisers — are feeling the impact more acutely than at any point in our lifetime."
Thursday's move came after Burbank, California-based Disney said last week it would merge its ABC Entertainment and ABC Studios divisions. Sweeney said that reorganization was intended to "streamline the creative process."
ABC Studios had already sought cost cuts of about 2 percent from two dozen shows including "Desperate Housewives" in November after Disney reported losses at its broadcasting group had more than quadrupled from a year earlier.
Last week, Disney's parks division also offered voluntary buyout packages to about 600 executives and gave them until Feb. 6 to opt in.
Disney Chief Executive Robert Iger said in November the company was seeking to pare costs across the company to keep pace with worsening economic conditions.
The company is set to report its earnings for the first quarter, which ended in December, on Tuesday.
Black Angus Steakhouse Operator Files BankruptcyBy Bob Van Voris
Jan. 15 (Bloomberg) -- ARG Enterprises Inc., the operator of 69 Black Angus Steakhouse restaurants in seven states in the western U.S., sought bankruptcy protection and said it is seeking a buyer.
Closely held ARG, with headquarters in Los Altos, California, said in today’s Chapter 11 filing in U.S. Bankruptcy Court in Wilmington, Delaware, that it has between $100 million and $500 million in both assets and debts.
“The debtors’ restaurants primarily are located in some of the areas hardest hit by the mortgage crisis, causing consumers in those markets to cut back on discretionary spending,” Lisa Poulin, ARG’s chief restructuring officer, said in a statement filed with the bankruptcy court.
Several casual-dining style chains have filed for court protection in the past year, including Bennigan’s Steak and Ale restaurants and Buffet Holdings Inc. Pecus ARG Holding Inc., the owner of ARG, and subsidiary ARG Property Management Corp. also filed bankruptcy petitions. [Read entire article at:]
More Utility Bills Go UnpaidConsumers' Economic Struggles Spur More Power Shutoffs as Firms Step Up CollectionsBy REBECCA SMITH
Utilities are becoming more aggressive about collecting money from delinquent customers, leading to a surge in service shutdowns just as economic woes are pushing up the number of households falling behind on bills.
The utilities say they are under pressure to clean out accounts that are weighing down their books at a time when their stocks are being hammered and earnings growth has slowed.
Meanwhile, the increasing number of homes left without power -- which could rise as economic pain deepens -- is beginning to worry some consumer advocates and regulators.
In Pennsylvania, PPL Corp. increased shutoffs by 78% in the first three quarters of the year compared with the same period a year earlier. Shutoffs at electric utilities throughout the state increased by 20% in that period. George Lewis, a spokesman for PPL, based in Allentown, Pa., said the utility had been somewhat lax in the past but decided this year to "reverse the trend and prevent people from getting further in debt" by cutting them off sooner. About 3% of the company's residential accounts have been disconnected for delinquency.
In Memphis, Tenn., the city-owned utility that supplies electricity, natural gas and water to residents cut off 38% more people in the first eight months of the year, or 69,743 electric accounts, versus the same period in 2007. The utility raised electricity rates 20% this year, reflecting increased wholesale power costs for energy. Chris Stanley, a spokesman from the company, Memphis Light, Gas & Water, said the number of accounts owing more than $900 that were 90 days or more past due was up 148% to 1,766 accounts as of Oct. 28.
The increased number of shutoffs has attracted the attention of some regulators. Dian Grueneich, a member of the California Public Utilities Commission who has responsibility for low-income programs, has begun asking utilities to furnish information on shutoff criteria. She wants commission staff to "take a look and make sure it is being applied fairly."
One bright spot is that many utilities will have more money to distribute next year to poor customers through the Low Income Home Energy Assistance Program. Congress boosted the program's funds for the current fiscal year by 78% to $5.1 billion. Many utilities are trying to get the word out that people should apply because eligibility rules have been expanded, allowing people with higher incomes to qualify.
State regulators say they have noticed that power shutoffs have moved up the economic chain. "We're seeing an uptick in middle-class people who have never been in this situation before," said Eric Hartsfield, director of the customer-service division of the New Jersey Board of Public Utilities.
New Jersey's biggest utility company, Public Service Enterprise Group Inc., said it saw a 10% increase compared with the year earlier in uncollectible natural-gas accounts, and slightly less on the electric side, in the third quarter. "We've been diligent in our shutoff activities," said PSEG Chief Executive Ralph Izzo.
Rising delinquencies are occurring across the country. In New York, the amount of money utilities are owed on accounts at least 60 days past due jumped 22%, to $611.3 million in September compared with a year earlier, according to regulators.
Michigan has experienced a nearly 39% increase in electricity disconnections this year compared with last, according to statistics filed voluntarily by utilities with state regulators.
The rise comes as utilities are finding it more difficult to fund their operations.
Northeast Utilities, which owns electric and gas utilities in New Hampshire, Massachusetts and Connecticut, is carrying about $15 million of unpaid bills currently, up from about $11 million this time last year and about $8 million in 2006. "We're putting more resources into collecting on accounts now," said Chief Financial Officer David McHale.
In the third quarter, PECO Corp., a Philadelphia utility, racked up an additional $37 million of bad-debt expenses from unpaid bills compared with the third quarter of 2007, bringing its total unpaid balance to $56 million.
The company has put in place a new service-termination strategy this year that for the first time assesses credit risk, and pulls together other information used as a basis for decisions. "We ask how old, how big and how risky" an account is when prioritizing disconnections, said Denis O'Brien, president of PECO, a unit of Chicago-based Exelon Corp.
The number of shutoffs could rise further, as new technologies such as digital meters make it easier for utilities to cut off late-paying customers.
Digital meters allow power companies to do things remotely that previously required sending out work crews. For example, utilities can take meter readings wirelessly and switch a customer's power off or on without having to send a crew to a house. They also can use a "service limiter" feature to cut power flows to a trickle until customers pay up. Utilities are installing millions of these meters across the U.S.
Southern California Edison, a unit of Edison International of Rosemead, Calif., currently disconnects late-paying customers owing as little as $30, but that could drop lower in the future. That usually would be a money-losing proposition, because it requires a crew to be sent out to disconnect service manually. But the company is in the process of installing 5.3 million digital meters, at a cost of $1.63 billion, which will allow remote, wireless shutoffs, making it economical to take action even for tiny amounts owed. In a recent filing with regulators it said it could adopt "rigid enforcement" of payment rules in the future for those owing less than $30. It hypothesized it could cut off an additional 129,000 people a year.
Lynda Ziegler, senior vice president of customer service at SoCal Edison, said the utility doesn't have enough wireless meters to support a policy change yet. She added that notification requirements mean it still could take nearly three months to sever a delinquent account. But she said the utility may seek authority from the Public Utilities Commission in the future to act more quickly or to convert certain customers to prepaid service because "one of the struggles people have is catching up when they get behind."
The ease with which utilities can use digital meters to cut off service has alarmed some consumer advocates. "Just because you can do it doesn't mean you should do it," said Irwin Popowsky, head of the Office of Consumer Advocate in Pennsylvania. "From my perspective, they're creating a reason to not have smart meters."
Write to Rebecca Smith at
Toys for Tots in CrisisReporter: Deb Farris Email Address:
The charity that provides toys for needy kids at Christmas time is in dire straights.
Toys for Tots says for the first time ever the toys are running out and it's not even close to Christmas.
The Marines organize Toys for Tots every year. Thursday they loaded up 5,500 toys for one charity, but they need about 20,000 more to meet the extremely high demand this year.
"Usually in the past, Wichita has pulled through for us, but this year the economy is down. Everyone is more concerned about providing for their own and there's a lot of kids out there who are going to miss out on a Christmas," said Sergeant James Watts of Toys for Tots.
Homeless woman's body found burning in shopping cart in VancouverCBC News
Last Updated: Friday, December 19, 2008 11:51 AM ET
The body of a middle-aged homeless woman was found burning Friday in downtown Vancouver after she apparently tried to keep herself warm by burning candles in a temporary shelter she had built over a shopping cart.
The body was found burning in the cart at Davie Street and Hornby Street around 4:30 a.m. PT, police said.
The woman, known as Tracey, 47, came to Vancouver last month after living on the streets in the Abbotsford area for a number of years, Vancouver police Const. Jana McGuinness said Friday.
"She was checked by our officers on at least three occasions overnight and offered shelter, which she declined," McGuinness said.
"The officer that checked her last had a conversation with her, offered her a small comfort in the form of a cigarette, and lent her his lighter when she asked to borrow it to light a candle."
Tracey's activities after that were unknown. Investigators are asking anyone who may have had contact with her in the area between 12:30 a.m. and 4:30 a.m. to call police.
Patrons at a nearby all-night coffee shop said that a homeless man wearing a blanket had run into the shop screaming that somebody was on fire.
But witnesses said he was ignored by the staff and patrons for two or three minutes because there had been several incidents involving homeless people fighting and yelling in and around the coffee shop earlier.
Eventually one woman in the coffee shop went out to look and spotted the flames about a block and a half away, witnesses said.
Someone called 911, but the firefighters arrived too late to save the person.
Victim may be 7-Eleven door-opener
Judy Graves, co-ordinator of the tenant assistance program for the City of Vancouver, said she believed the victim was a homeless woman who would frequently stand outside a nearby 7-Eleven store, opening the door for customers.
Graves said staff at the store told her the woman had lit candles inside the cart.
Firefighters on the scene said they believe the fire started accidentally.
The death comes during a weeklong cold snap gripping much of Canada. Temperatures plunged below –8 C overnight in Vancouver, with the wind chill making it feel like –13, driving many homeless people to emergency shelters overnight.
Graves, who has been an advocate for the homeless for over two decades, speculated the woman might have chosen to remain on the streets during the cold snap because many shelters do not allow street people to bring their shopping carts inside for the night.
A new shelter that will allow shopping carts is scheduled to open within days, said Graves.
One man died and a woman was severely burned in January when their portable stove exploded as they used it for warmth while sheltering in a Vancouver alley.

Home Prices: Falling
By Susie Madrak
Friday Dec 12, 2008
I think home prices may fall by even more than 30%. We're hitting a period of deflation, which will drive wages (and employment) even lower and the value of houses may drop even more:
As painful as the decline has been, history suggests home values still may have a long way to drop and may take decades to return to the heights of 2½ years ago.
"We will never see these prices again in our lifetime, when you adjust for inflation," says Peter Schiff, president of investment firm Euro Pacific Capital of Darien, Conn. "These were lifetime peaks."
The boom in home prices — fueled by heavily leveraged loans built on low or even no down payments — made it easy to forget that housing values had been remarkably stable for a half-century after World War II, rising at roughly the same pace as income and inflation. Prices soared in most of the country — especially in Arizona, California, Florida and Nevada and metro areas of Washington, D.C., and New York — during a brief period of easy lending, especially from 2002 to 2006. That era's over.
So far, home values nationally have tumbled an average of 19% from their peak. As bad as that is, prices would need to fall as least 17% more to reach their traditional relationship to household income, according to a USA TODAY analysis of home prices since 1950. In that scenario, a $300,000 house in 2006 could be worth about $200,000 when real estate prices hit bottom.
World Bank Warns of Great Depression II
Posted On: December 12th, 2008 Source:
The world could go through its worst recession since the Great Depression as a massive financial crisis has slashed global investment and sharp drops in commodity prices severely hurt poor-country exports, the World Bank warned on Tuesday.
The global development bank slashed its previous estimates for global growth to 2.5 per cent in 2008 and 0.9 per cent in 2009, well below the 3 per cent rate typically considered the dividing line between global growth and contraction. “The financial crisis is now likely to result in the most serious recession since the 1930s,” said the World Bank’s chief economist Justin Lin, as the group released its annual report on the global economy.
The current economic slowdown was notable for both its length and breadth across all regions of the world, leading to a contraction in the most wealthy nations and a sharp slowdown in emerging countries, the bank said.
The bank’s analysis pointed to a number of indicators of a dramatic slowdown. Global trade volumes will contract for the first time since 1982. Worldwide investment will fall 50 per cent in 2009, compared to 2007. The financial crisis has cut access to loans in advanced and developing countries, pulling investment out of poorer nations and reducing consumer spending.
Lin urged all countries with the ability to increase government spending to use it to boost domestic demand.
States’ Funds for Jobless Are Drying UpDecember 15, 2008
With unemployment claims reaching their highest levels in decades, states are running out of money to pay benefits, and some are turning to the federal government for loans or increasing taxes on businesses to make the payments.
Thirty states are at risk of having the funds that pay out unemployment benefits become insolvent over the next few months, according to the National Association of State Workforce Agencies. Funds in two states, Indiana and Michigan, have already dried up, and both states are borrowing from the federal government to make payments to the unemployed.
Unemployment taxes are collected by states from employers, but the rate varies from state to state per employee. In good times states build up trust funds so that when unemployment is high there is enough money to cover the requests for benefits, which are guaranteed by the federal government.
“You don’t expect the loans to happen this early in a jobs slump,” said Andrew Stettner, the deputy director of the National Employment Law Project, an advocacy organization for low-wage workers. “You would expect that the states should, even when they are not well prepared, to have savings.”
The Labor Department said last week that initial applications for jobless benefits rose to 573,000, the highest reading since November 1982. It is recommended that states keep at least one year of peak-level benefits in their trusts, but many have not, and already some states are far worse off than others.
Indiana’s unemployment trust fund went insolvent last month, and has borrowed twice from Washington since then — the first such loans to the state since 1983. It also expects to request an additional $330 million early next year.
Michigan, which has been borrowing money from the federal government for the past few years to replenish its fund, is now $508.8 million in the hole and unable to repay it. Next month the state, where the unemployment rate is more than 9 percent, will begin levying a special “solvency tax” against some employers to replenish its trust fund.
California, New York, Ohio, Rhode Island and other states are inching toward insolvency as well, and may have to borrow from the federal government to get through at least the first quarter of 2009.
In South Carolina, officials recently requested a $15 million line of credit.
“Right now we have $40 million in our trust fund, and we are paying out around $11 million a week,” said Allen Larson, deputy executive director for the unemployment insurance program at the South Carolina Employment Security Commission. “So we think it is going to be very close as to whether or not we can get through this year. We have never experienced anything like this.”
Officials in New York said the state’s trust fund has about $314 million, compared with $595 million last year, and will most likely have to borrow from the federal government in January.
The situation puts states, many of them facing huge deficits, in an even tighter vise. As more people lose their jobs, the revenue base that the benefits are drawn from shrinks, making it harder to pay claims. Adding to that burden is that states will eventually have to pay back what they borrow.Some states are worried about next year because the lion’s share of unemployment taxes are collected early in each year, and they are not sure the money will stretch through the end of the next year. [Read entire article at:]
Economic Crisis Hits State Court SystemsBy Susie Madrak, Monday Dec 22, 2008 7:00pm
Yet another legacy of the law-and-order Republican crowd:
Reporting from Brentwood, N.H. -- Come February, the red-brick Rockingham County Courthouse, one of New Hampshire's busiest, will arraign criminal suspects, process legal motions and otherwise deal with murders, mayhem and contract disputes. What it won't do is hold jury trials.
The economic storm has come to this: Justice is being delayed or disrupted in state courtrooms across the country.
Financially strapped New Hampshire has become a poster child for the problem. Among other cost-cutting measures, state courts will halt for a month all civil and criminal jury trials early next year to save $73,000 in jurors' per diems. Officials warn they may add another four-week suspension.
"It brings our system almost to a screeching halt," said county prosecutor James M. Reams. His aides are scrambling to reschedule 77 criminal trials that were on the February docket.
"All the effort to subpoena witnesses and prepare for those trials is right out the window," Reams said, frustration in his voice. "Internally, it's a monumental waste of time. We'll have to redo everything."
At least 19 other states, including California, have slashed court budgets and other government services as their economies have tanked, said Daniel Hall, vice president of the National Center for State Courts, a nonprofit in Williamsburg, Va.
As jobs get axed, lawsuits get filedLabor lawyers expect a flood of wrongful- termination casesBy Carol J. Williams, Los Angeles Times
Posted: 12/26/2008,
Lured away from her job in Houston to take an executive position at Dell Inc., Jan Chapman persuaded her husband to quit his job, move with her to Austin, Texas, and buy a house at the height of the real-estate bubble.
Seven months later, the computer-maker laid off Chapman, whose 25-year career in human resources had been filled with flattering performance evaluations.
Chapman, 59, and three other top female managers have filed a class-action lawsuit against Dell, alleging age and sex discrimination in the company's termination of 8,000 employees over the past year.
The lawsuit, filed in federal court in San Francisco, is one of only a few so far emanating from the mass layoffs sweeping the United States.
But labor and employment lawyers warn that a tidal wave of wrongful-termination lawsuits is expected in the coming months as the jobless burn through their savings, run up debt and find few work prospects in the worst economic downturn in decades.
Attorneys specializing in labor law say they haven't been this busy since the late 1980s, as strapped corporate clients seek their counsel on how to reduce staff without inviting litigation.
"Unfortunately, we're doing a lot of that lately. Nobody is immune," said Jay Krupin, who leads the labor and employment practice at Epstein Becker Green's Washington office.
Krupin walks clients through a checklist of laws and company policies that need to be considered in identifying positions to be eliminated, including notification requirements, severance-pay provisions and a "disparate impact analysis" to guard against terminating those in a protected class who might have grounds to sue.
The 20-year-old Worker Adjustment and Retraining Notification Act, called the WARN Act, requires employers to give at least 60 days' notice of plant closings that eliminate 50 or more jobs, and before mass layoffs affecting 500 employees or more than a one-third of the workforce. "If you got rid of a number of employees, and they all happened to be over 40, they would have a cause of action" for age discrimination, Krupin said.
The same could apply to disproportionate dismissal of minorities or women, he said, even if there wasn't deliberate intent to target those workers.
Companies that regularly evaluate employees and identify underperformers are best positioned to defend their decisions to lay off the laggards. Conversely, employers who haven't documented poor performance — or have given glowing reports or pay raises to workers they now want to lay off — are likely to have a hard time defending those dismissals.
One indicator of the heightened concern about litigation has been the rise in policies that employers have taken out for employment practices liability insurance, said Jenny Jones, president of the independent Los Angeles insurance brokerage Elkins Jones. Her agency has seen a 32 percent increase in policies to cover defense costs in the event of wrongful-termination lawsuits.
Economy Spurs 240% Spike at Texas Domestic Violence SheltersDec 22 11:00 AM US/Eastern
Allstate Foundation Survey Says Numbers Will Climb Around New Year
IRVING, Texas, Dec. 22 /PRNewswire/ -- Domestic violence shelters across Texas are experiencing an unprecedented jump in families needing emergency rescue during the current economic downturn and are bracing for an even greater increase after the holidays, according to an Allstate Foundation survey.
Of the 29 shelters the Allstate Foundation surveyed in Texas, 83 percent say the number of hotline calls, walk-ins and/or families staying at their shelters has dramatically increased this year. Walk-ins at one shelter jumped 240 percent. Crisis hotlines calls have doubled in some cases, and the number of women and children staying at shelters has increased by as much as 71 percent in some instances.
"Every year the stresses of the holiday season send women and children fleeing for safety," said Paige Flink, Executive Director of Family Place in Dallas. "But this year, the financial pressures of the holiday season are compounded by the weakened economy. This is a recipe for disaster and I'm afraid we will see more tragic stories on the news if we don't prepare women today."
Unfortunately, this increased demand for emergency services won't disappear with the New Year. More than 70% of the shelters surveyed explain many battered women try to keep their families together so the children can have holiday memories. The stresses of the holiday season come to bear eventually, however, and shelter beds are overflowing throughout the month of January, as well.
"I often hear people ask why a woman doesn't 'just leave' an abusive situation and take her family to safety," said Janemarie Clark, Allstate Foundation Manager for Texas. "Financial dependence is the reason. When women believe that they don't have the resources to feed and clothe their children, they will stay in a dangerous domestic situation."
Animal shelters across nation filling up as faltering economy leads owners to give up petsBy Margery A. Gibbs, Associated Press
Last update: December 21, 2008
A growing number of Americans are giving up their dogs and cats to animal shelters as the emotional bonds between people and pets get tested by economic ones.
From the Malvern, Pa., man who turned his two dogs over in order to help pay for his mother's cancer treatments, to the New York woman who euthanized her cat rather than keeping it alive with expensive medications, rising economic anxieties make it increasingly difficult for some pet owners to justify spending $1,000 a year or more on pet food, veterinary services and other costs.
The population growth at animal shelters in Connecticut, Nebraska, Texas, Utah and other states shows how the weak economy is also shrinking the pool of potential adopters. And it coincides with a drop-off in government funding and charitable donations.
The effect has been cramped quarters for dogs and cats, a faster rate of shelters euthanizing animals and some shelters turning away people looking to surrender pets, according to interviews with several shelters and animal advocates. Of the estimated 6 million to 8 million dogs and cats sent to animal shelters every year, half are euthanized and the rest adopted, according to the Humane Society of the United States.
"It's definitely discouraging for us," said Adam Goldfarb, a Humane Society spokesman. "One of our major goals is to develop and celebrate the bond between people and animals. It's so tragic when families reach a point when they can't afford to care for their pets."
With two children, a husband on disability and a difficult job search of her own, 23-year-old Mel Bail of Worcester, Mass., had begun feeding leftovers from family meals to her three cats — Rory, Ozzy and Mudpie — before recently deciding to give them up.
"When I couldn't pay my gas bill, I knew I had to find another home for the cats," Bail said.
But it wasn't easy to find a shelter that would accept them. "They're completely full," said Bail, who ultimately turned to online classified ads to find homes for Rory, Ozzy and Mudpie.
There is no nationwide data being collected on the reasons dogs and cats are being abandoned by their owners, but shelter managers and advocates for animals say the trend is undeniable — and probably a bigger phenomenon than they are aware of.
"People are embarrassed to admit that's why they're giving up their pets," said Betsy McFarland, the Humane Society's director of communications for companion animals.
An Associated poll found that one in seven owners nationwide reported reduced spending on their pets during the past year's recession. Of those cutting back, more than a quarter said they have seriously considered giving up their pet.
The average annual cost of owning a dog is about $1,400, while the average annual cost of a cat is about $1,000, according to a survey conducted by the American Pet Products Association. The survey suggests there are some 231 million pets — excluding fish — in more than 71 million homes in America.
In Omaha, Neb., the Nebraska Humane Society's shelter began tracking for the first time this year those pets given up because of financial constraints. Through mid-November, more than 275 pets were given up because their owners said they couldn't afford to keep them.
Among them are two 9-year-old miniature schnauzers, dropped off anonymously with a note that said their owners could no longer afford to keep them.
Humane Society spokeswoman Pam Wiese said the obedience-trained purebreds came into the shelter up-to-date on vaccinations and dental care and were well-groomed.
"It is really sad, because for these people, it is not an excuse. They are absolutely stuck, and they need to downsize and there is no one to take the pets," she said. "You can tell these have been much-loved pets."
In New York, Erin Farrell-Talbot recently made the decision to euthanize her 15-year-old cat, Buki, when she was told within days of losing her job that he would need thousands of dollars in treatment and medications costing $65 a month to live.
"When it came down to whether I was going to charge food for the month of September or give medicine to my cat, that was a clear decision for me," Farrell-Talbot said. "It was horrible. It killed us."
The Animal Humane Association in Albuquerque, N.M., saw 69 dogs and cats turned over through September because the owners couldn't afford to keep them. That compares with 48 in the same period in 2007 — a 44 percent increase, said executive director Peggy Weigle.
In response, Weigle's shelter began a program to open its emergency pet shelter — normally reserved for battered women needing a place to keep their pets for a while — to those suffering financially. So far this year 45 pets have been taken in through the emergency program, compared with eight the previous year.
The Society for the Prevention of Cruelty to Animals in Virginia Beach, Va., recently began a program called Help Out Pets Everywhere (HOPE) to provide food, medical care and temporary homes for pets belonging to families with financial difficulties. Eighteen applications were received within the first week.
The program received 18 applications within its first week. Some of those people have never experienced hardship until now, and therefore, neither have their pets, McNally said.
"It's been devastating," said Amy McNally, a spokeswoman for the program. "For somebody to say, 'I can't afford to feed my dog' — it's a humbling time."
Celente Predicts Revolution, Food Riots, Tax Rebellions By 2012
“America will cease to be a developed nation within 4 years, crisis will be worse than the great depression”Paul Joseph Watson
Thursday, November 13, 2008
The man who predicted the 1987 stock market crash and the fall of the Soviet Union is now forecasting revolution in America, food riots and tax rebellions - all within four years, while cautioning that putting food on the table will be a more pressing concern than buying Christmas gifts by 2012.
Gerald Celente, the CEO of Trends Research Institute, is renowned for his accuracy in predicting future world and economic events, which will send a chill down your spine considering what he told Fox News this week.
Celente says that by 2012 America will become an undeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts and job marches, and that holidays will be more about obtaining food, not gifts.
“We’re going to see the end of the retail Christmas….we’re going to see a fundamental shift take place….putting food on the table is going to be more important that putting gifts under the Christmas tree,” said Celente, adding that the situation would be “worse than the great depression”.
“America’s going to go through a transition the likes of which no one is prepared for,” said Celente, noting that people’s refusal to acknowledge that America was even in a recession highlights how big a problem denial is in being ready for the true scale of the crisis. Celente, who successfully predicted the 1997 Asian Currency Crisis, the subprime mortgage collapse and the massive devaluation of the U.S. dollar, told UPI in November last year that the following year would be known as “The Panic of 2008,” adding that “giants (would) tumble to their deaths,” which is exactly what we have witnessed with the collapse of Lehman Brothers, Bear Stearns and others. He also said that the dollar would eventually be devalued by as much as 90 per cent.
The consequence of what we have seen unfold this year would lead to a lowering in living standards, Celente predicted a year ago, which is also being borne out by plummeting retail sales figures.
The prospect of revolution was a concept echoed by a British Ministry of Defence report last year, which predicted that within 30 years, the growing gap between the super rich and the middle class, along with an urban underclass threatening social order would mean, “The world’s middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest,” and that, “The middle classes could become a revolutionary class.”
In a separate recent interview, Celente went further on the subject of revolution in America.
“There will be a revolution in this country,” he said. “It’s not going to come yet, but it’s going to come down the line and we’re going to see a third party and this was the catalyst for it: the takeover of Washington, D. C., in broad daylight by Wall Street in this bloodless coup. And it will happen as conditions continue to worsen.”
“The first thing to do is organize with tax revolts. That’s going to be the big one because people can’t afford to pay more school tax, property tax, any kind of tax. You’re going to start seeing those kinds of protests start to develop.”
“It’s going to be very bleak. Very sad. And there is going to be a lot of homeless, the likes of which we have never seen before. Tent cities are already sprouting up around the country and we’re going to see many more.”
“We’re going to start seeing huge areas of vacant real estate and squatters living in them as well. It’s going to be a picture the likes of which Americans are not going to be used to. It’s going to come as a shock and with it, there’s going to be a lot of crime. And the crime is going to be a lot worse than it was before because in the last 1929 Depression, people’s minds weren’t wrecked on all these modern drugs – over-the-counter drugs, or crystal meth or whatever it might be. So, you have a huge underclass of very desperate people with their minds chemically blown beyond anybody’s comprehension.”
The George Washington blog has compiled a list of quotes attesting to Celente’s accuracy as a trend forecaster.
“When CNN wants to know about the Top Trends, we ask Gerald Celente.”— CNN Headline News
“A network of 25 experts whose range of specialties would rival many university faculties.”— The Economist
“Gerald Celente has a knack for getting the zeitgeist right.” — USA Today
“There’s not a better trend forecaster than Gerald Celente. The man knows what he’s talking about.”- CNBC
“Those who take their predictions seriously … consider the Trends Research Institute.”— The Wall Street Journal
“Gerald Celente is always ahead of the curve on trends and uncannily on the mark … he’s one of the most accurate forecasters around.” — The Atlanta Journal-Constitution
“Mr. Celente tracks the world’s social, economic and business trends for corporate clients.”— The New York Times
“Mr. Celente is a very intelligent guy. We are able to learn about trends from an authority.”— 48 Hours, CBS News
“Gerald Celente has a solid track record. He has predicted everything from the 1987 stock market crash and the demise of the Soviet Union to green marketing and corporate downsizing.”— The Detroit News
“Gerald Celente forecast the 1987 stock market crash, ‘green marketing,’ and the boom in gourmet coffees.”— Chicago Tribune
“The Trends Research Institute is the Standard and Poors of Popular Culture.” — The Los Angeles Times
“If Nostradamus were alive today, he’d have a hard time keeping up with Gerald Celente.”— New York Post
So there you have it - hardly a nutjob conspiracy theorist blowhard now is he? The price of not heeding his warnings will be far greater than the cost of preparing for the future now. Storable food and gold are two good places to make a start.
Parent Company, a Retailer, Files for BankruptcyBy Stephanie Rosenbloom
December 30, 2008
A rash of retailing bankruptcies is expected in the new year, but as the clock winds down on one of the weakest holiday shopping seasons in decades, the fallout has already begun.
On Monday, the Parent Company, an Internet retailer of children’s products, had the dubious distinction of apparently becoming the first well-known retailer to file for Chapter 11 bankruptcy protection after Christmas. The company made the filing along with nine of its subsidiaries, including eToys. Many analysts did not expect bankruptcy filings to begin until January or February.
Michael J. Wagner, chief executive of the Parent Company, called the bankruptcy filing “an unfortunate but necessary and responsible step to preserve the company’s value for our stakeholders in light of the ongoing challenging retail environment.”
Challenging is hardly the word. This year, retailers including Circuit City, Boscov’s, Sharper Image, Mervyns, Linens ’n Things, Whitehall Jewelers and Steve & Barry’s filed for bankruptcy protection.
And that is very likely the tip of the iceberg. After studying more than 180 companies, AlixPartners, a restructuring firm, estimates that over the next 24 months there will be a fourfold increase in the number of retailers in deep distress — companies that do not have enough working capital or are unable to finance their debt.
“Unfortunately, this is the new normal,” said Matthew F. Katz, a managing director in the retailing practice of AlixPartners.
Retailers had one of the worst holiday shopping seasons in decades, with sales falling by double digits in nearly all categories, including apparel, luxury goods, furniture and electronics and appliances, according to SpendingPulse, a report by MasterCard Advisors that estimates retail sales from all forms of payment, including checks and cash.
Like many retailers, the Parent Company was hit hard by the freeze in consumer spending. To attract consumers during the Christmas shopping season, eToys offered up to 60 percent off more than 1,300 toys and games, including brands like Hannah Montana, My Little Pony and TMX Elmo.
But the Parent Company, which is considering selling some or all of its businesses, was not simply a victim of the recession. The company’s history of troubles is deeper than the grandest of toy chests. EToys filed for bankruptcy protection in 2001 and its assets were bought by KB Toys, one of the nation’s biggest toy retailers, for more than $5 million. KB Toys, which filed for bankruptcy in 2004, filed again this month. It has already begun going-out-of-business sales.
The Parent Company, based in Denver, is majority owned by D. E. Shaw & Company. The company, which listed assets of $20.6 million and debt of $35.7 million, is seeking permission for a $10.9 million operating loan from a Shaw affiliate to keep operations running while it seeks a buyer.
Like luxury retailing, the toy sector was once considered insulated from the economic downturn. But no more. James J. Lewellis, a retailing research associate at Needham & Company, said recently that toy retailers had too much inventory and had had to cut prices significantly. He estimated sales would fall at least 5 percent compared with last year.
“It’s all about liquidity,” said Mr. Katz of AlixPartners. “What retailers are trying to do is turn their inventory into working capital and use that to fund the operation and to fund the debt load. And without that your lifeline is soft or gone.”
Is recession behind spike in bank robberies?From Deborah Feyerick, CNN
December 31, 2008
NEW YORK (CNN) -- A rash of bank robberies in New York has the city's police commissioner worried that criminals have turned banks into "virtual cash machines" and some wondering whether tough economic times are fueling the trend.
On Monday alone, robbers targeted five banks in the Big Apple, some striking in broad daylight and near famous landmarks.
Police called the incidents unrelated, but they're just the latest examples of the growing tally of hold-ups.
Bank robberies in New York have risen 54 percent compared with last year, with criminals committing more than 430 in the past 12 months, according to the New York police department.
"As it stands now, they've turned [banks] into virtual cash machines," New York Police Commissioner Raymond Kelly said.
Bank robberies are also up in many areas across the country, including San Diego, California, and Houston, Texas, federal law enforcement experts told CNN.
It's enough for some to link the trend to the rash of layoffs, the plummeting stock market and the bust in the real estate values, all of which have left many Americans in dire financial straits.
"It makes me think that the recession is making people go to extreme measures," a woman who frequents one of the banks robbed Monday told The New York Times.
But Kelly said it's not clear whether the bad economic times are fueling the unusual spike.
"People want to say... it's because of the economy. I think it's too early to make that statement," he said.
CNN security analyst Mike Brooks agreed, adding that although there are typically many bank robberies during the holidays, there are no data to suggest that any recent spike was caused by the economy.
Another expert said it's possible that the difficulty of finding a job right now may be a factor, but he doubted that law-abiding citizens are turning to crime to make ends meet.
"It's hard to attribute the bank robberies to people who were let go from Lehman Brothers or other organizations that are in trouble," said Alfred Blumstein, who has researched criminal justice for 20 years and is a professor of operations research at Carnegie Mellon University's Heinz College.
"I would anticipate that people who rob banks have been involved with crime before because that's not where one is likely to start," Blumstein said.
A person who might turn to robbing banks is someone in their late teens or early 20s who has already broken the law and has decided to move on to a bigger target, he added.
"Bank robbery is a very high-risk activity, because most banks have various surveillance equipment in place, and it requires a degree of aggressiveness that otherwise law-abiding folks are not likely to take on," Blumstein said.
Some officials say the modern, customer-friendly design of banks -- with easy access to tellers and cash -- is too tempting for robbers.
"We don't like the business plan that makes a bank look like a living room," Kelly said "We [advise] just some common sense provisions, such as so-called bandit barriers, so that tellers have some option to act when somebody puts a note in front of them."
In fact, bank robbers have simply handed tellers a note in a vast majority of hold-ups in New York. Kelly put the figure at 80 percent and added that although the rest of the robbers claimed to have a gun, many didn't actually show it.
Mike Smith, president and CEO of the New York Bankers Association, is meeting with the NYPD to see what more can be done to discourage robbers. He said banks have a significant amount of security, some of which may not be visible to the public.
"Are there enhancements? Obviously. Criminals talk to each other, they know what's going on, but typically they are apprehended," Mike Smith said.
CNN's A. Pawlowski contributed to this report.
Love, Jobs & 401(k)sBy RUTH LA FERLA
November 23, 2008
On a good day last summer, Thomas Taccetta, a stock trader, might have checked his financial charts before plotting the day’s investments. Today he is likely to check in with his psychic as well. “I’ll play the broadest index, the S.&P. 500,” Mr. Taccetta said, “and if she tells me she is getting a negative view, I will sell.”
Since September, when the Dow collapsed, Mr. Taccetta, who trades for his own portfolio in Boca Raton, Fla., has talked with his psychic about once a month, roughly twice as often as a year ago. “There is no rhyme or reason to the way the market is trading,” he said. “When conditions are this volatile, consulting a psychic can be as good a strategy as any other.”
In an era when even Henry M. Paulson Jr., the Treasury secretary, changes his mind weekly about how to rescue the United States economy, Mr. Taccetta’s decision to seek the advice of a psychic may not seem all that irrational. With Washington flinging pieces of the $700 billion bailout package around, dithering about whom to rescue — homeowners? automakers? cousin Fred? — a good set of tarot cards might come in handy.
“Your mortgage agents, your realtors, your bankers, you can’t go to these people anymore,” said Tori Hartman, a psychic in Los Angeles. “They’re just reading a script — at least that’s how my clients feel. People are sensing that the traditional avenues have not worked, that all of a sudden this so-called security that they’ve built up isn’t there anymore. They come to a psychic for a different perspective.”
Psychics say their business is robust, as do astrologers and people who channel spirits, read palms and otherwise predict the future (albeit not the winning lottery numbers). Their clients, who include a growing number of men, are often professional advice-givers themselves, in fields like real estate and investments, and they typically hand over anywhere from $75 to $1,000 an hour for this form of insight.
“My Web traffic is up and up and up,” said Aurora Tower, a New Yorker who constructs spidery star charts for her growing clientele. “People will entertain the irrational when what they consider rational collapses.”
Quackery? Whatever. But after all, the nation’s supposed experts on the economy, from pundits on the networks to billionaire investment bankers, have not been exactly reliable. And spiritual readings, as they are known, appear to be one of the few growth sectors in a contracting economy.
“My phone is ringing off the hook,” said Roxanne Usleman, a psychic in Manhattan.
Ms. Usleman, who says she channels angels to advise her clients on interpersonal and financial matters, reported both a spike in traffic on her Web site and a significant surge in private consultations. She used to see comfortably 15 to 20 clients a week, she said. Now she meets with more than twice that number. “I’m having trouble squeezing in appointments,” she said.
Dawn Carr, a psychic in Boston, said her holiday bookings jumped as much as 70 percent this year over last, fueled in part by corporate bookings for holiday parties. “These people are looking for someone not just to entertain them, but to enlighten them,” she said.
Although most of us would settle for just enough telepathy to read our spouse’s mind, some people crave more.
“When you don’t know what to expect of a job interview or a business partnership,” said Gita V. Johar, a professor of at the Columbia University Business School, “that is when you’re most likely to turn to a psychic.”
Professor Johar, whose specialty is studying the effects of superstition on consumer behavior, suggested that when your portfolio is shrinking or your business is tanking, talking to a soothsayer may be “one way of feeling in control.” She needed no crystal ball herself to predict that “given the uncertainty of the economy, psychics are going to see an increase in business.”
The steep prices charged by practitioners of divination do not seem to have deterred many of the financially fretful. Ms. Hartman, the Los Angeles psychic, said her Internet traffic has picked up substantially, from about 30 visitors a day to more than 200. She charges from $150 for a 30-minute telephone reading to $500 for 90 minutes of “intuitive counseling.” In what is perhaps a sign of the times, the $70 moss-scented prosperity candle offered on her Web site has become her best seller, she said.
Many more men have joined the ranks of seekers. “In the old days men would turn to their wives and ask, ‘What did that goofball say, honey?’ ” said Michael Lutins, a New York writer and astrologer. “Now they are raising their heads, interested in matters that were once considered women’s stuff.” Mr. Lutin has lectured about astrology at such male-dominated institutions as the Harvard Business School Club of New York.
Ms. Usleman said that her once predominantly female clientele has also expanded. Men — among them lawyers, doctors, chief executives and insurance brokers — now make up about 50 percent of her business. They approach her, she said, with highly targeted questions, as if they were grilling an investment counselor. “Before agreeing to a reading, they will ask: ‘What is your accuracy rate? Can you guarantee your readings? How do you get your information and can I depend on it?’ ”
Aside from storefront readers, psychics rarely hang out a shingle, making their earnings hard to track. But one person who has attempted to quantify the rising popularity of psychics is Robert LoCasio, the chief executive of, a site offering telephone consultations with experts in fields from finance to fly fishing.
When he bought his company a year ago, Mr. LoCasio checked the Consumer Sentiment Index, which is published by the University of Michigan and charts consumer confidence, from 2005 through September of this year. He then compared the data with records from his own company, and drew the conclusion that when the economy is down, consultations with psychics spike noticeably.
Live Person earned revenues of $30 million this year, about 70 percent derived from spiritual readers, Mr. LoCasio said. “In this day and age, a spiritual guide is an everyday therapist — that’s what the business has become,” he said.
In more ordinary economic cycles, psychics tend to offer guidance on romance and relationships. These days, they are besieged with questions about whether a pink slip is in the cards, whether a condo will sell, or whether a company will continue to prosper.
Alicia Bowling, who runs a sports bar in Manhattan, consulted a psychic when friction with a business partner seemed about to imperil her livelihood. “I used to go to my psychic about twice a year, but in the past year, yikes, I may have talked to her a dozen times,” said Ms. Bowling, 49. “I used to ask more about love, or will I ever be married, but with all these hard times, I wonder, ‘What’s going to happen to my bar and will I survive?’ ”
Sergei Pamukh, a New York stock trader, considers himself a skeptic about supernatural matters, but softened his stance after consulting Ms. Usleman, the Manhattan psychic. When his business was flailing earlier this fall, she suggested that he travel to Moscow to meet with a billionaire mogul. “In two or three weeks I am going,” he said.
Ms. Usleman said she typically fields questions these days like, “Should I go back and live with my parents?” and “Is it O.K. to take my children out of private school?” In the past, she added, “they would ask, ‘Should I have a baby?’ But now they have put that on hold.
“Basically, what people want to know in a troubled economy,” she said, “is what can they do to reinvent themselves.”
Fahrusha, a Madame Blavatsky from Manhattan, said that clients have been pressing her with highly focused queries. “They might want to know about investing in a particular security, or ask how the euro will fare against the dollar,” she said. In flusher times, they might have consulted a financial expert, she said, “but some of these people are experts themselves.”
Maria Napoli, a Manhattan astrologer whose clientele includes a growing circle of the rich and famous in the worlds of fashion, art and finance, observed that many of her clients were fretting about a global picture, not just their careers. “They are asking: ‘Where are we headed as a country? Are we entering a depression?’ I get a lot of Republicans wondering where their party is going.”
Mostly they are after a little peace of mind.
“It pays to cover all your bets,” said Stuart McFaul, who runs a marketing and public relations company in San Francisco.
Mr. McFaul checks in with his psychic when he is stumped for answers about where his business, and his competition, might be headed. “I’m a big believer that you really don’t dismiss any opinion,” he said.
Ms. Bowling, the bar owner, is grateful for the slightest shred of insight. “In times that are this nerve-racking, all it takes is one word that kind of helps you get through your day,” she said.
"What we are seeing is a portrait of an economy that is cratering," says Stuart Hoffman, chief economist at PNC Financial Services in Pittsburgh. "This explains why holiday sales were so weak, with people so concerned about their jobs, and why consumer confidence is so low."
Usually, if individuals qualify for unemployment insurance, they go online to apply or call their state bureau responsible for processing the paperwork and paying them. However, even the online networks are having challenges. Last week, three states – Ohio, North Carolina, and New York – reported computer problems. Online systems in many other states are slowing because of the sheer volume they are handling.
Although many states have offices to help individuals look for jobs, the state employees there usually cannot help someone applying for benefits.
"We let [the employees] do a simple task on [the office's] behalf, but we don't want them to give out bad information," says Cullen, whose state no longer has offices for those filing for benefits.
Yet many times, the unemployed need to talk to a real person.
That was the case last week for Danielle Saxon of Elk Grove, Calif., a suburb of Sacramento. In October, she lost her job at a company that does home renovation. But her claim form disappeared in the mail, and for two weeks, she was unable to get through to anyone in the state Employment Development Department (EDD).
Finally, after missing two unemployment checks, she drove to a state office with six phones that would ring through directly to state workers. As she waited in line to use one of the phones, she tried to reach someone on her cellphone – in 86 separate calls.
After two hours and 45 minutes, she finally got to use one of the six phones, but she had to redial 115 times to get through to a state employee.
"I am very frustrated. I have a car payment, car insurance, and a phone bill all overdue," she says. "What am I supposed to do?"
Her story is similar to ones elsewhere. In Ohio, the Department of Job and Family Services ordinarily handles about 7,500 calls a day. Two weeks ago, it started getting 80,000 calls a day, says Brian Harter, a spokesman.
To deal with the deluge, some states are trying to hire more workers. That's the case in Pennsylvania, which this past fall started hiring 600 permanent workers and 300 temps to help it cope with a 16.4 percent increase in new claims. In addition, the state is spending more money on its computer systems. "Our servers have been upgraded and expanded, and we are now upgrading our mainframe," says David Smith, a spokesman in Harrisburg, Pa.
In addition, Pennsylvania, which may see a big boost in claims after Alcoa lays off 15,000 workers, has expanded the hours of its workers in the unemployment office. Filers can even reach state workers on Sundays.
Although claims are high nationally, they are not at their peak – reached in 1982 when 695,000 people filed initial claims for unemployment in one month.
But in prior downturns, there were more offices for people to visit to get questions answered. In fact, the states could use an extra $546 million to administer their programs, estimates the National Association of State Workforce Agencies (NASWA).
"The problem is lack of resources [to hire] more employees and [modernize] computer systems," says Rich Hobbie, executive director.
For the past two years, Rep. Jim McDermott (D) of Washington has sponsored the Unemployment Insurance Modernization Act, which includes $7 billion to expand coverage and a one-year, $500 million payment to states to improve administration. Several press reports indicate the legislation is expected to be included in President-elect Obama's economic stimulus program. It was already reintroduced last Thursday in the House.
The states, however, are split over supporting it because it would require the expansion of coverage to include such categories as some part-time workers, people who have compelling family emergencies, and workers enrolled in state training programs.
Some Republicans say they are opposed to the expansion. Some business groups, concerned their unemployment costs will rise in the future, are also against it.
Unemployment advocates, however, say the basic unemployment act, written in 1935, needs updating. "It is woefully out of date," says Andrew Stettner of the National Employment Law Project in New York. "It will give the states an immediate boost to fill a gap in their unemployment insurance programs."