Category: Ineptitude


 

Who Needs The United States? Not Russia And China

 

Russia and China have just signed what is being called “the gas deal of the century”, and the two countries are discussing moving away from the U.S. dollar and using their own currencies to trade with one another.  This has huge implications for the future of the U.S. economy, but the mainstream media in the United States is being strangely quiet about all of this.  For example, I searched CNN’s website to see if I could find something about this gas deal between Russia and China and I did not find anything.  But I did find links to “top stories” entitled “Celebs who went faux red” and “Adorable kid tugs on Obama’s ear“.  Is it any wonder why the mainstream media is dying?  If a particular story does not fit their agenda, they will simply ignore it.  But the truth is that this new agreement between Russia and China is huge.  It could end up fundamentally changing the global financial system, and not in a way that would be beneficial for the United States.

Russia and China had been negotiating this natural gas deal for ten years, and now it is finally done.  Russia is the largest exporter of natural gas on the entire planet, and China is poised to become the world’s largest economy in just a few years.  This new $400 billion agreement means that these two superpowers could potentially enjoy a mutually beneficial relationship for the next 30 years

Russia reached a $400 billion deal to supply natural gas to China through a new pipeline over 30 years, a milestone in relations between the world’s largest energy producer and the biggest consumer.

President Vladimir Putin is turning to China to bolster Russia’s economy as relations sour with the U.S. and European Union because of the crisis in Ukraine. Today’s accord, signed after more than a decade of talks, will allow state-run gas producer OAO Gazprom (GAZP) to invest $55 billion developing giant gas fields in eastern Siberia and building the pipeline, Putin said.

It’s an “epochal event,” Putin said in Shanghai after the contract was signed. Both countries are satisfied with the price, he said.

Of course countries sell oil and natural gas to each other all the time.  But what makes this deal such a potential problem for the U.S. is the fact that Russia and China are working on cutting the U.S. dollar out of the entire equation.  Just check out the following excerpt from a recent article in a Russian news source

Russia and China are planning to increase the volume of direct payments in mutual trade in their national currencies, according to a joint statement on a new stage of comprehensive partnership and strategic cooperation signed during high-level talks in Shanghai on Tuesday.

“The sides intend to take new steps to increase the level and expansion of spheres of Russian-Chinese practical cooperation, in particular to establish close cooperation in the financial sphere, including an increase in direct payments in the Russian and Chinese national currencies in trade, investments and loan services,” the statement said.

In my recent article entitled “De-Dollarization: Russia Is On The Verge Of Dealing A Massive Blow To The Petrodollar“, I warned about what could happen if the petrodollar monopoly ends.  In the United States, our current standard of living is extremely dependent on the rest of the world continuing to use our currency to trade with one another.  If Russia starts selling natural gas to China without the U.S. dollar being involved, that would be a monumental blow to the petrodollar.  And if other nations started following the lead of Russia and China, that could result in an avalanche from which the petrodollar may never recover.

And it isn’t just the national governments of Russia and China that are discussing moving away from the U.S. dollar.  For example, the second largest bank in Russia just signed a deal with the Bank of China “to pay each other in domestic currencies”

 

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Last I  checked the excuse for the shuffling that was  going on with  scheduling appointments.  Was not an  isolated incident as it was  being  done in more than one  VA Hospital.  Taking place due to  policies being implemented  to  monitor the productivity and efficiency of Hospital personnel and their respective departments. 

Protocols such as this are generally handed down from corporate hierarchy to regional and then local.   It is doubtful that regional or local management implemented these measures on their own and just happened to coincide with similar incidents in other  hospitals in the same way. 

If these protocols were being implemented and enforced  throughout all VA Hospitals , logic would dictate that  they originated higher up the food chain and that local as well as regional management had a stake in the ultimate outcome of these assessments.  After all ,  corporate politics would dictate that promotions and rewards would directly correlate with the outcome of said assessments as well as departmental records.

To establish unrealistic goals without providing adequate means to accomplish said goals effectively.  As well as establishing a competitive situation without adequate control measures to keep the  overzealous and unscrupulous from doing exactly what has been done.  Is an obvious failure on the part of corporate management, Eric Shineski, in this case.  To gloss over that fact is naive at best and criminal at worst.  But then Mr. Obama is no stranger to criminal negligence , gross ineptitude and just plain ignorance of the actions taking place around him.  So I suppose he can sympathize…..

 

~Desert Rose~

 

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VA Secretary Eric Shinseki. (Reuters/Jonathan Ernst).

VA Secretary Eric Shinseki. (Reuters/Jonathan Ernst).

 The Washington Post

 

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House votes 390-33 to speed up VA firings

The House on Wednesday overwhelmingly passed a bill to grant the Veterans Affairs secretary expanded authority to fire senior executives for poor performance.

The measure passed on a 390-33 vote amid allegations that veterans encountered delays in access to medical care at multiple VA hospitals across the country, leading to dozens of deaths. All 33 votes in opposition came from Democrats, including ledership Reps. Steny Hoyer (Md.) and James Clyburn (S.C.). House Minority Leader Nancy Pelosi (D-Calif.) voted to approve the measure.

Under the bill, the VA secretary would be authorized to dismiss senior executives or demote them to the civil service. It would require the VA secretary to notify Congress of such a firing or demotion within 30 days.House Veterans Affairs Committee Chairman Jeff Miller (R-Fla.) said the measure would help rid the department of incompetent employees in light of the controversy.

“The committee has received nothing but disturbing silence from the White House and only excuse after another from the Department of Veterans Affairs,” Miller said.

Rep. Corrine Brown (D-Fla.) said the legislation would send a message that the VA would be held accountable.

“It is very important as we go into Memorial Day that we let the veterans know that we appreciate their service. And we also need to let them know that we’re going to do all we can to make sure they have the quality health care they deserve,” Brown said.

An administration official said the White House supports the overall goals of the legislation, but also had concerns that it could have unintended consequences.

 

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Obama vows fix to veterans’ health care troubles

 

WASHINGTON (AP) – With outrage mounting over veterans’ health care, President Barack Obama declared Wednesday that allegations of misconduct at VA hospitals will not be tolerated, and he left open the possibility that Secretary Eric Shinseki, a disabled war veteran, could be held to account.

“I will not stand for it – not as commander in chief but also not as an American,” Obama said following an Oval Office meeting with the embattled Shinseki.

Congress moved to keep up the pressure on the administration, with the House easily approving a measure Wednesday evening that would give the VA secretary more authority to fire or demote the 450 senior career employees who serve as hospital directors or executives in the agency’s 21 regions. The vote was 390 to 33.

Rep. Jeff Miller, R-Fla., chairman of the House Veterans Affairs Committee, sponsored the measure, saying VA officials who have presided over mismanagement or negligence are more likely to receive bonuses or glowing performance reviews than any sort of punishment. He declared that a “widespread and systemic lack of accountability is exacerbating” the department’s problems.

The White House said it supported the goal of seeking greater accountability at the VA but had unspecified concerns about the legislation.

The growing furor surrounding the Department of Veterans Affairs centers on allegations of treatment delays and preventable deaths at VA hospitals. The department’s inspector general’s office says 26 facilities are being investigated nationwide, including a Phoenix hospital facing allegations that 40 people died while waiting for treatment and staff kept a secret list of patients in order to hide delays in care.

The allegations have raised fresh concerns about the Obama administration’s management of a department that has been struggling to keep up with the influx of new veterans returning home from the wars in Iraq and Afghanistan. Obama’s comments Wednesday – his first on the matter in more than three weeks – signaled a greater urgency by the White House to keep the matter from spiraling into a deeper political problem in a midterm election year.

 

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Possible drawbacks of the VA firing bill scheduled for Wednesday vote

The House is set to vote this week on a bill that would give the head of the Department of Veterans Affairs authority to fire or demote senior executives for perceived performance problems without going through the usual administrative procedures.

House Majority Leader Eric Cantor (R-Va.) added the measure to the weekly docket on Thursday, the same date VA Secretary Eric Shinseki testified about reports that VA health clinics throughout the country have cooked their books to hide treatment delays, some of which may have affected patients who died while waiting for care.

VA Secretary Eric Shinseki. (Reuters/Jonathan Ernst).

VA Secretary Eric Shinseki. (Reuters/Jonathan Ernst).

Ironically, the American Legion has called for Shinseki’s removal because of the alleged coverups, along with other problems such as a longstanding backlog of disability claims and preventable deaths at various VA hospitals. If the secretary departs, his critics would have to wait for a replacement to fire senior officials for the recent controversy.

Shinseki said during the hearing that he is “mad as hell” about the reported treatment delays, and he vowed to stick around until he improves VA services for veterans or President Obama asks him to resign.

MORE: Shinseki faces tough questions on VA scandal, vows to ‘accomplish a mission’

Although firing VA officials may quell the recent outrage over reported coverups, the Senior Executives Association has raised concerns about the House bill. Below is a summary of the measure’s drawbacks, as outlined in recent statements from the group:

* Due process: Senior executives can appeal firings and demotions to an administrative panel known as the Merit Systems Protection Board, which determines whether the personnel actions were warranted. However, the hearings are informal and the decisions are non-binding for agency executives, unlike with rank-and-file employees.

The SEA said the House bill would rob employees of the right to recourse when department chiefs wrongly punish their workers. They also noted that accountability processes already exist for senior executives.

Agencies must provide a 30-day written notice when they decide to remove senior executives. The officials can then argue against removal, choose to resign, or return back to work at a lower position. They may also be eligible for immediate retirement.

 

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Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections

Obama Backs Shinseki Amid Calls to Resign (Updated)

VA Budget 03 042313 445x295 Obama Backs Shinseki Amid Calls to Resign (Updated)

Updated 6:22 p.m. | The White House is backing Veterans Affairs Secretary Eric Shinseki after he faced calls to resign Monday over allegations that veterans died waiting for care in Phoenix and other problems in his department.

“As the President said last week, we take the allegations around the Phoenix situation very seriously,” said Shin Inouye, a White House spokesman. “That’s why he immediately directed Secretary Shinseki to investigate, and Secretary Shinseki has also invited the independent Veterans Affairs Office of Inspector General to conduct a comprehensive review,” he said.

“We must ensure that our nation’s veterans get the benefits and services that they deserve and have earned. The President remains confident in Secretary Shinseki’s ability to lead the Department and to take appropriate action based on the IG’s findings.”

Earlier Monday, the American Legion called on Shinseki to resign, although the Veterans of Foreign Wars declined to do so. Sen. John McCain, R-Ariz., said he wants the investigation to go forward first. 

 

 

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Heritage Foundation  :

What Obama Wants for Your Children and Grandchildren

 

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Tenth Amendment Center

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Senator demands independent investigation as VA scandal spreads

By Jeremy Schwartz

The chair of the Texas Senate’s veteran affairs committee on Monday called for an independent investigation into allegations that wait time data was manipulated at Department of Veterans Affairs clinics in Central Texas and San Antonio.

Sen. Sen. Leticia Van de Putte, D-San Antonio, made her comments as the burgeoning scandal over VA patient care reached the Rio Grande Valley, where a former VA doctor accused the department of delaying colonoscopies for veterans with cancer and jeopardizing veterans’ visits to non-VA specialists because the agency took so long to reimburse private providers.

In Austin, Van de Putte demanded accountability from top VA leaders over claims that scheduling clerks were trained to falsely input appointment data to make it appear that waiting times were far shorter than they really are. The VA aims to see patients within 14 days of their desired appointment dates, and medical centers are graded on their ability to hit those targets.

“It appears the motivation for the deception…was a personal pay day in the form of a VA performance bonus,” Van de Putte said. “Someone is responsible. These scheduling clerks didn’t just decide to falsify reports all over the country at the same time…The allegations show a pattern that crosses multiple clinics and shows the actions were condoned at a pretty high level.”

The claims of whistleblower Brian Turner, a VA scheduling clerk who said he saw data manipulation in Waco, Austin and San Antonio, were first reported by the American-Statesman last week.

On Monday, new allegations emerged against the VA Health Care Center in Harlingen, and officials with the VA’s Texas Valley Coastal Bend Health Care System, which oversees the facility. Dr. Richard Krugman, former associate chief of staff at the center, told investigators that “patient care was impacted by the VA’s requirements to cut costs,” according to documents obtained by the American-Statesman.

 

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Cornyn Demands Answers From VA Secretary

May 13 2014

WASHINGTON – U.S. Senator John Cornyn (R-TX) today announced on Fox News he has sent a letter to Veterans Affairs Secretary Eric Shinseki after several reports surfaced of abuse and mismanagement in VA clinics in Texas and across the country.  The letter asks several questions of Sec. Shinseki, and calls on the Secretary to provide answers during his testimony before the Senate Veterans’ Affairs Committee on Thursday, May 15. A video of Sen. Cornyn’s Fox News interview regarding VA failures can be viewed here. Sen. Cornyn’s questions for Sec. Shinseki include:

“Can you confirm that supervisors at VA facilities in Texas have not and are not ordering employees to ‘game the system’ by concealing wait times?

“Can you confirm that veterans diagnosed with cancer of any kind that requires chemotherapy are provided that treatment in a timely manner by the VA? 

“Can you confirm that any bonuses or pay raises are on hold for senior leaders at VA facilities in San Antonio, Austin, Waco, Harlingen, and all VA facilities where similar allegations have been made?

“Can you confirm that staff at facilities currently under investigation for allegations of falsified reports will not be assigned to investigate other VA facilities? 

“Can you confirm that documents are being preserved at all Texas VA facilities?”

The full text of the letter is below and attached.

May 13, 2014

The Honorable Eric K. Shinseki
Secretary of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC  20420

Dear Secretary Shinseki:

I write to reiterate my deep concern regarding the numerous, troubling reports that continue to surface regarding mistreatment of our nation’s veterans at Department of Veterans Affairs (VA) facilities across the country.  These reports indicate that incidents—including the withholding of life-saving care from some veterans—were the result of a culture of cover-ups, indifference as to the health and welfare of our veterans, and a complete lack of accountability that pervades your Department.  Yet, the Administration’s response to these troubling revelations has been lethargic and its inaction puzzling.

During your testimony before the Senate Veterans’ Affairs Committee on Thursday, I call on you to provide direct, clear answers to these questions:

1.         According to recent reports, you have ordered a “face-to-face audit” of all Department of Veterans Affairs clinics.  Can you describe in detail how you intend for this audit to be conducted, its timeline for completion, and what measures are being taken to ensure these audits are conducted in an independent and transparent manner?  If the allegations are substantiated, what type of action are you willing to take to right these wrongs, and how will the responsible officials be held accountable?

2.         A whistleblower in Texas claims that during his time as a scheduling clerk for VA facilities in Austin, San Antonio, and Waco, he was directed by supervisors to hide true wait times by inputting false records into the VA’s scheduling system.  VA officials in San Antonio deny this, while VA officials in Austin claim employees may have been discouraged from using the electronic scheduling tool that would reveal long wait times, but that those orders did not come from “executive leadership.”  Can you confirm that supervisors at VA facilities in Texas have not and are not ordering employees to “game the system” by concealing wait times?

3.         An Austin-based surgeon recently contacted my office to inform me he is not accepting any further subcontracts from the VA due to failures in patient care that he has personally witnessed.  Specifically, he saw a veteran in August of 2013 who was referred to him by the VA after they detected a lesion they suspected was cancerous.  Already two months had lapsed between the time they detected the lesion and the time he saw the veteran.  This surgeon performed a biopsy and diagnosed it as laryngeal cancer.  He informed the VA that the veteran needed immediate chemotherapy – that they had a real chance to treat his cancer if they started chemotherapy right away.  Almost two months later, he followed up on his case only to learn the VA never provided chemotherapy, with no good excuse as to why.  The veteran died several days later.  Can you confirm that veterans diagnosed with cancer of any kind that requires chemotherapy are provided that treatment in a timely manner by the VA?

4.         A whistleblower in South Texas who formerly served as associate chief of staff for the VA Texas Valley Coastal Bend Health Care System in Harlingen, TX, told the Washington Examiner this week that roughly 15,000 patients who should have had the potentially life-saving colonoscopy procedure either did not receive it or were forced to wait longer than they should have.  He also claims that approximately 1,800 records were purged to give the false appearance of eliminating a backlog.  Can you confirm that veterans requiring colonoscopies to detect cancer are provided with the procedure in a timely manner?

5.         In 2012, VA medical facilities in Central Texas reported that 96 percent of veterans were seen by providers within 14 days of their preferred appointment date.  In the South Texas region that includes San Antonio, the statistics were even more impressive: 97 percent of veterans were seen within two weeks, according to annual performance reports.  Can you produce documents that show the original dates of veterans’ requests for appointments for 2012?

6.         According to public records, the director of the Phoenix VA hospital, where news investigations have discovered at least 40 veterans died while waiting for care and languishing on secret lists, received more than $9,000 in bonus pay in 2013.  Can you confirm that any bonuses or pay raises are on hold for senior leaders at VA facilities in San Antonio, Austin, Waco, Harlingen, and all VA facilities where similar allegations have been made?

7.         My staff attended a Quarterly Congressional Staffer and Veterans Service Organization Representative Meeting at the Central Texas Veterans Health Care System (CTVHS) Friday, May 9, 2014.  Sallie Houser-Hanfelder, director of the Central Texas Veterans Health Care System, told meeting attendees that, as part of the face-to-face audits you have ordered, a quality systems manager from CTVHS would be sent to another VA facility to assist with investigations there.  Can you confirm that staff at facilities currently under investigation for allegations of falsified reports will not be assigned to investigate other VA facilities?

8.         A former VA employee at the VA Greater Los Angeles Medical Center told the Daily Caller that employees at the Center destroyed veterans’ medical files in a systematic attempt to eliminate backlogged veteran medical exam requests.  The former employee said, “The waiting list counts against the hospital’s efficiency.  He said the chief of the Center’s Radiology Department initiated an “ongoing discussion in the department” to cancel exam requests and destroy veterans’ medical files so that no record of the exam requests would exist, thus artificially reducing the backlog.  In addition, you have been subpoenaed by the House Veterans Affairs Committee over concerns by Chairman Jeff Miller that evidence in Phoenix may have been destroyed after the Committee issued a document-preservation order on April 9.  A top VA official testified on April 24 that a spreadsheet of patient appointment records, which may have been a “secret list” proving misconduct, was shredded or discarded.  Can you confirm that documents are being preserved at all Texas VA facilities?

I look forward to your prompt and detailed responses to these pressing questions.

Sincerely,

JOHN CORNYN
United States Senator

 

 

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The Heritage Foundation

Armed Services Chairman on Obama: ‘Our Foreign Policy Is a Mess’

Chairman of the House Armed Services Committee Congressman Buck McKeon. (Photo: Erin A. Kirk-Cuomo/Newscom)

President Obama’s wrongheaded view of the world has weakened America’s military and turned foreign policy into a “mess” — and Republicans bear some of the responsibility, the chairman of the House Armed Services Committee said yesterday.

“It is no accident that the expansion of Russia and China has come at the exact moment when we are dismantling our military and retreating from the world,” Rep. Buck McKeon (R- Calif.) said in a speech at The Heritage Foundation aimed at drawing attention to defense and national security issues.

“With Russia invading Ukraine, China provoking our Pacific allies, al-Qaeda regrouping, North Korea banging the drum, and ongoing turmoil in the Middle East, I think the president has lost sight of his purpose here,” McKeon said.

McKeon’s appearance at Heritage was part of “Protect America Month” events organized by the think tank.

Americans, McKeon argued, ought to be asking what the nation’s central foreign policy goal is, and what role the U.S. military has in advancing it.  He said:

“Put plainly, our foreign policy is a mess. We have no coherent strategy.  I’m not sure if we’re supposed to be pivoting to Asia, pivoting to the Middle East, or pivoting back to Europe.”

The California Republican, who announced four months ago that he will retire next January after 22 years in Congress, argued that most Americans want to live “in peace and security,” free to prosper and make their own decisions without worrying about what’s going on in “faraway lands.”

He cited Abraham Lincoln’s formula that government’s legitimate aim is “to do for a community of people whatever they need to have done, but cannot do for themselves.”

“An individual can go out and find health care coverage without the government,” McKeon said. “They can save for retirement without the government. They can start a business without the government. But they cannot resist foreign aggression without a strong standing military.”

 

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ByBruce Kennedy

Another bad sign for America’s middle class

You don’t have to be an economic victim of the Great Recession to know that America’s middle class is being squeezed in an unprecedented manner. Not only is the U.S. middle class no longer the world’s richest, according to recent research, but millions of families who were once financially secure are now living hand-to-mouth.

What’s going on? A new report from the National Employment Law Project finds that, nearly five years after the recession officially ended, most of the jobs that have been created during the recovery offer lower wages. Such positions made up 22 percent of jobs lost in the recession, but have accounted for 44 percent of employment growth.

 

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Where is the middle class heading?

 

The labor research and advocacy group also found that, from the outset of the recession in late 2007 to its low point in February of 2010, “employment losses occurred throughout the economy, but were concentrated in mid-wage and higher-wage industries.”

By contrast, mid-wage positions, which composed 37 percent of the jobs cut in the recession, have made up only 26 percent of those recovered. High-wage industries, which made up 41 percent of recession jobs lost, reportedly had a 30 percent recovery growth.

“Today, there are nearly 2 million fewer jobs in mid- and higher-wage industries than there were before the recession took hold, while there are 1.85 million more jobs in lower-wage industries,” NELP said in a statement,

 

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The low wage jobs explosion

  @Luhby April 28, 2014: 4:57 PM ET

low wage explosionLow wage jobs are on the rise.

NEW YORK (CNNMoney)

Looking for a job? The ones you’ll find will likely be low wage.

The labor market has been recovering since the Great Recession ended, but many of the jobs created have been in low-wage industries, according to a new report by the National Employment Law Project, a left-leaning group.

Among the fastest-growing jobs: Food services, home health care and retail — all of which pay relatively little.

Better paying blue-collar industries, such as construction and manufacturing, have not recovered to their employment levels before the recession.

Lower wage industries accounted for 44% of employment growth since employment hit bottom in February 2010, the group found.

Going back to the start of the recession six years ago, the nation has added 1.85 million jobs in low-wage industries, but mid-wage and higher-wage industries have shed nearly 1 million positions each.

 

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Reuters

People wait in line to meet a job recruiter at the UJA-Federation Connect to Care job fair in New York March 6, 2013. REUTERS/Shannon Stapleton

People wait in line to meet a job recruiter at the UJA-Federation Connect to Care job fair in New York March 6, 2013.

Credit: Reuters/Shannon Stapleton

 U.S. job growth jumps, but shrinking labor force a blemish

WASHINGTON Fri May 2, 2014 4:52pm EDT

(Reuters) – U.S. employers hired workers at the fastest clip in more than two years in April, pointing to a rebound in economic growth after a dreadful winter and keeping the Federal Reserve on track to end bond purchases this year.

The brightening outlook was, however, tempered somewhat by a sharp increase in the number of people dropping out of the labor force, which pushed the unemployment rate to a 5-1/2-year low of 6.3 percent. Wage growth also was stagnant.

Nonfarm payrolls surged 288,000 last month, the Labor Department said on Friday. That was largest gain since January 2012 and beat economists’ expectations for only a 210,000 rise.

“It lends significant legitimacy to the positive tone in the wide array of post-February economic reports, which have all been consistently pointing to a significant pick-up in economic growth momentum this quarter,” said Millan Mulraine, deputy chief economist at TD Securities in New York.

March and February’s data was revised to show 36,000 more jobs than previously reported.

U.S. stocks briefly rallied on the report, which was later eclipsed by rising tensions in Ukraine. Stocks ended lower, while safe-haven bids pushed the yield in the 30-year U.S. government bond to its lowest level in more than 10 months.

The dollar was flat against a basket of currencies.

About 806,000 people dropped out of the labor force in April, unwinding the previous months’ gains. That helped to push down the unemployment rate 0.4 percentage point to its lowest level since in September 2008.

The labor force participation rate, or the share of working-age Americans who are employed or unemployed but looking for a job, also fell four-tenths of a percentage point to 62.8 percent last month, slipping back to a 36-year low touched in December.

Overall, however, the data suggested the economy was gathering strength and led investors to pull forward their bets on when the Fed will start to raise interest rates.

The strong payrolls growth added to upbeat data such as consumer spending and industrial production in suggesting that sputtering growth in the first quarter was an aberration, weighed down by an unusually cold and disruptive winter.

 

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Reuters

Discouraged job seekers behind shrinking labor force

WASHINGTON Fri Apr 5, 2013 6:58pm EDT

People wait in line to meet a job recruiter at the UJA-Federation Connect to Care job fair in New York March 6, 2013. REUTERS/Shannon Stapleton

People wait in line to meet a job recruiter at the UJA-Federation Connect to Care job fair in New York March 6, 2013.

Credit: Reuters/Shannon Stapleton


(Reuters) – Americans giving up the hunt for jobs were likely behind a sharp drop in the U.S. workforce last month, a bad sign for an economy that is struggling to achieve a faster growth pace.

The number of working-age Americans counted as part of the labor force — either with a job or looking for one — tumbled by 496,000 in March, the biggest fall since December 2009, the Labor Department said on Friday. That pushed the so-called workforce participation rate to a 34-year low of 63.3 percent.

March marked the second month in a row that the participation rate declined — 626,000 people have dropped from the work force since January.

Friday’s report showed a decline in the number of discouraged job seekers last month after a pop in February, which at first glance might suggest the drop in the workforce was mainly because of shifting demographics.

But a closer look at the underlying numbers raises questions about the notion that retiring baby boomers were the driving force behind the shrinking workforce.

“You have to think that it’s a large part demographics, but demographics are not really going to have such a big effect on month-to-month changes,” said Keith Hall, senior research fellow at George Mason University’s Mercatus Center.

Of the nearly 500,000 people dropping out, just 118,000 were aged 55 and older, meaning more than three-quarters of the increase came from below-retirement-age adults.

Also, the number of people 65 and older counted as part of the workforce actually rose by 27,000, which followed a 72,000 increase in February.

Hall said the sluggish economy was forcing some older Americans to continue working to rebuild retirement nest-eggs that were shattered during the 2007-09 recession.

Indeed, the participation rate for Americans between 55 and 64 years old held steady at a relatively high 65 percent. On the other hand, participation by the 25-29 age group was the lowest since record-keeping started in 1982.

“People are just giving up the search for work. A lot of them would like to work and they aren’t, that is a serious sickness in the economy,” said Peter McHenry, assistant economics professor at the College of William & Mary in Williamsburg, Virginia.

The drop in participation helped to lower the unemployment rate by a tenth of a percentage point to 7.6 percent. If the workforce had not contracted, the jobless rate would have risen two-tenths of a percentage point to 7.9 percent in March.

 

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Yahoo Finance
In this April 10, 2014 photo, Jennifer Stickney, a recruiter for Right at Home, which provides in-home care and assistance, answers questions from nursing students at a job fair on the campus of Kaplan University in Lincoln, Neb. The Labor Department on Friday, May 2, 2014 said U.S. employers added a robust 288,000 jobs in April, the most in two years, the strongest evidence to date that the economy is picking up after a brutal winter slowed growth. (AP Photo/Nati Harnik)
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In this April 10, 2014 photo, Jennifer Stickney, a recruiter for Right at Home, which provides in-home care and assistance, answers questions from nursing students at a job fair on the campus of Kaplan University in Lincoln, Neb. The Labor Department on Friday, May 2, 2014 said U.S. employers added a robust 288,000 jobs in April, the most in two years, the strongest evidence to date that the economy is picking up after a brutal winter slowed growth. (AP Photo/Nati Harnik)

Any period of unemployment can have a crippling effect on a worker’s career and finances. But to be both young and unemployed in America presents its own set of unique challenges.

Workers under the age of 30 have contended with five solid years of double-digit unemployment — 19% for 16- to 19-year-olds and 10.6% for 20- to 24-year-olds at last count. The economy is slowly improving and there are jobs to be had again. The overall U.S. unemployment rate dropped to 6.3% in April as 288,000 jobs were added — the highest in two years, the Labor Department announced Friday.  But young people who haven’t been able to find work are now struggling to compete in a tough job market with little experience.

“The longer you’re not in the workforce, the harder it is to get back in,” says Rory O’Sullivan, deputy director of the Young Invincibles. “Employers look at resumes and there are a lot of young people working outside of their field of study. You can imagine all those things can make it harder to build a career.”

As many as one in five high school graduates and one in 10 college graduates are considered “disconnected youths,” those who are not working or enrolled in college, according to a new report by the Economic Policy Institute, a liberal think tank.

“There is little evidence that young adults have been able to ‘shelter in school’ from the labor market effects of the Great Recession,” the authors write. “Increases in college and university enrollment rates between 2007 and 2012 were no greater than before the recession began—and since 2012, college enrollment rates have dropped substantially.”

If these “idle” young people were factored into unemployment rates, it would raise the combined rate of unemployment for 16- to 25-year-olds from 14.5% to 18.1%.

And of those young people who have managed to find work, nearly half are considered to be underemployed, often working in part-time jobs that may have little or nothing to do with their chosen career path. What’s more, young people who graduate in 2014 will likely earn less than they would have if they had graduated in a stronger economy, the EPI report says.

Wages for high school graduates have dropped by 9.8% since the recession and wages for young college graduates fell by 6.9%.

Youth unemployment isn’t just a “young people” problem either. A recent report by the Young Invincibles estimates it has cost the U.S. economy nearly $9 billion in lost tax revenue since 2007. Each unemployed 18- to 24-year-old represents an estimated $3,200 in lost tax revenue, and each 25- to 34-year-old costs more than twice as much: $7,000.  And with nearly one-third of millennials living at home with their parents, parents who might have otherwise been enjoying the relief of an empty nest must instead continue their roles as financial guardians.

The reality is that young people are disproportionately impacted by economic downturns and no matter how much the U.S. economy improves, they will be feeling the effects of the recession for many years to come.

We spoke with several young people under the age of 30 — all solidly in the “underemployed” camp — who are struggling to launch their careers.

 

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Photo: Sara Beck

“My resume is a work of art.”

Sara Beck, 28, has spent the better part of a year trying and failing to find a full-time marketing position in Plymouth, Minn.

Her troubles have little to do with her lack of education or job skills: She has an MBA in international business, spent six years working abroad, and speaks perfect Spanish.

“My problem is that I’m either too experienced or not experienced enough for some of the jobs I want,” she says. “I had a really promising interview, but I got an email recently that they decided to go with candidates whose experience aligned more with the requirements. It was an entry-level position.”

While Beck pursues a career in the U.S., her husband, a Chilean national, stayed behind in Santiago to work on obtaining a work visa. She’s caring for their daughter on her own while living with relatives until she can find work.

“I can’t send my daughter to the daycare of my choice because I’m saving money,” she says. “I have more than $70,000 left in student loan debt. It’s insane to think about.

In the meantime, she has cobbled together enough freelance work to stay afloat — writing, editing and translating gigs that put food on the table but don’t necessarily improve her odds of landing a marketing job.

“I try to take a job in, say, content writing and apply it to a job as a business analyst,” she says. “My resume is a work of art.”

 

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