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The Great Jobs Depression Worsens, and the Choice Ahead Grows Starker
The Great Jobs Depression continues to worsen.
A job seeker checks for new jobs postings at the Glendale Workforce Services Center Thursday, Aug. 19, 2010, in Glendale, Calif. Employers appear to be laying off workers again as the economic recovery weakens. The number of people applying for unemployment benefits reached the half-million mark last week for the first time since November. (AP Photo/Damian Dovarganes) The Labor Department reports this morning that companies created ony 67,000 new jobs in August. That's down from the 107,000 they created in July. And because the government laid off temporary Census workers, the economy as a whole lost 54,000 jobs.
To put this into perspective, we need 125,000 net new jobs a month just to keep up with the growth of the population and the potential workforce.
Think of it this way. The number of Americans willing and able to work but who cannot find a job hasn't stopped growing since the start of 2008. All told, about 22 million Americans are now jobless. Add in those who are working part-time who'd rather be working full time, and we're up to 25 million.
And because most families depend on two paychecks, the practical impact is almost double.
All this has a negative multiplier on the economy. If families can't pay their bills, their mortgages become delinquent (that's why mortgage delinquencies keep rising), their credit card bills go unpaid (we're seeing a notable rise in credit card defaults), and they can't afford to buy anything other than necessities (hence auto sales have plummeted, new homes sales are down, and retail sales are in the pits).
As a result, more and more businesses decide to lay off workers (or refrain from adding them) because they can't sell the goods and services they produce.
The last time we saw anything on this scale was in the 1930s. The last time we did anything about this on the scale necessary to reverse the trend was in the 1930s and 1940s.
It is not that America is out of ideas. We know what to do. We need massive public spending on jobs (infrastructure, schools, parks, a new WPA) along with measures to widen the circle of prosperity so more Americans can share in the gains of growth (exempting the first $20K of income from payroll taxes and applying the payroll tax to incomes over $250K, for example).
The problem is lack of political will to do it. The naysayers, deficit hawks, government-haters and Social Darwinists who don't have a clue what to do would rather do nothing. We are paralyzed.
If there was ever a time for bold government action it is precisely now. Obama should be storming the country, demanding the largest responses to the jobs emergency in history. He and the Dems should be giving Republicans hell for their indifference to all this.
Instead, Obama is all over the map -- a mosque controversy, an Israeli-Palestinian peace talk (that may take years to complete if ever), a symbolic withdrawal from Iraq, and lots of little tax-cutting ideas.
Senate and House Democrats, meanwhile, are on the defensive. Polls even suggest Dems may lose the House and possibly even the Senate in November.
Business leaders have either gone silent or gone reactionary, as they did in the 1930s.
But the pain and suffering of tens of millions continue. Government revenues continue to drop, and the safety nets and public services they rely on are subject to even more cuts.
Ever wonder why the nation is turning isolationist and xenophobic? Why we're lashing out at undocumented immigrants, even though fewer are here now than a few years ago; why the rise of anti-Islam feeling now, although 9/11 was nine years ago? Why the virulence and hate-mongering on right-wing radio, and the surliness in the blogosphere?
The practical choice we face is this: Either major action to reverse the jobs emergency or years of intolerably high unemployment coupled with demagoguery and scapegoating.
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117 Comments so far
Show AllNo, kidding! becides we have all the oil we need for the one to five hundred years, we haven't even hit peak oil yet. Look at the spot price, only $74 a barrel.
It will go up of course as we roll over the top of peak oil. also from time to time due to speculators like happened a few years ago when we nearly hit $100 a barrel. That can't be helped and is usually tempororary.
>^^<
Big business will start hiring when the unemployed will work for pennies, just like in the 30's,- and the gap between the have and have nots has widened. Like in the 30's, the poor young could not find a job, or attend college, so they went to war. Another war is about on against Iran. The one Israel and Bush tried to create for 8 years. Obama was picked to play the patsy, and finish what Bush didn't.
But, apparently, too many of us are "lazy" and too picky. Well, the closest job opening for me would require moving to an even smaller town that's 400 miles from where I currently live. And, that job is only for one year; there's no guarantee it'd be around next year. So I can stay where I currently reside and maybe find a job that pays $7-10 an hour mostly without health care. I live where there are a lot of veterans and their family members, so they are ahead of me for any job I apply for.
Certinally isn't any use working if your not making enough to put a roof over your head and a couple of meals a day in your gut. If you can't make that minimum why get up in the morning.
>^^<
UNEMPLOYMENT -- BY CLASS
0% -- High Society
0% -- Country Club Class
3% -- Educated Middle-class
30% - Laboring class, the 49% of society without a high school diploma
For the upper half voting majority, the 51% most aggressive and wealthy, they all have great jobs, terrific homes and deluxe healthcare.
Could you provide a link for evidence of those numbers? Thanks.
I have an idea. Why not restrict incomes to ten times the minimum wage, taxing at 100% anything over that. Apply a luxury tax of 100% and exempt municipal bonds from taxation. This way, the rich finally pay up their share while municipalities receive billions of new dollars to regen infrastructure, create jobs, educate or whatever.
I'm an anarchist and I'm a better statist than most of you who cleave to this brutal, corrupt and dead system. If your governments won't do this for you, why have them? If the wealthy won't accede to these demands, why have them?
in the 60's - the top tax rate WAS =/- 90%...
and not so long ago... imports WERE taxed on the way in...
why... we ask... why do they do THIS to US... because they CAN... and will continue to do so...
until anther FDR a.k.a. - "traitor to his class" emerges... or we storm the gated communities...
We must choose Communism!
No. Communalism, which negates hierarchies.
A Labor Day Appeal to AFL-CIO President Trumka
(Please note: It was recently announced that the AFL-CIO President Trumka, with the UAW, was giving $80,000,000 ... EIGHTY MILLION DOLLARS OF DUES MONEY COLLECTED FROM UNION MEMBERS... to Obama and the Democratic Party for the November 2010 election. (In 2008 it was 50 million dollars!)
(After almost two years of Obama in office, and the Democratic Party in majority control of Congress, the continued support of Obama and the Democrats by the "leaders" of organized labor, is nothing but a deliberate betrayal of the needs of all working people, organized and unorganized.)
(Read this "Appeal" with a introductory comment on the California Peace and Freedom Party Blog (California's only "ballot status" Socialist party) here:)
http://peaceandfreedom.org/blog/?p=3626#more-3626
To: AFL-CIO President Trumka
What will your Labor Day speech have to say to the working people of America this coming Monday, September 6th?
Please do not trivialize yourself or the AFL-CIO on this Labor Day by further belaboring the obvious, as you have done here, by denouncing absurd Sarah Palin, the Tea Party kooks, or the evil Republican Party! These easy targets are nothing but corporate media distractions to divert attention from the crises now facing millions of working people today.
In 2008 you gave millions of dollars and thousands of man-hours of precious AFL-CIO resources to support Obama and the Democratic Party. He was supported by you, and tens of millions of working people, with a promise of hope and of change from the eight years of reviled Bush policies.
But President Obama, with full Democratic Party control of Congress, has not brought about any change. Instead of change Obama has continued and expanded the very policies most opposed to the needs of working people.
He has expanded the wars in the Middle East, and not ended them. He has re-established the profiteering gangsters on Wall Street with trillions of dollars in “bail out” funding. Obama has continued Global Warming by supporting “Cap and Trade” gimmicks that does not shut down profitable polluters. “Socialist” Obama has not nationalized the oil companies as a first step to end Global Warming, to end environmental pollution or to end the wars for oil profits.
Most of all, President Trumka, in opposition to the expressed wishes to the delegates at the Pittsburgh convention that elected you into office, you supported Obama’s “Health Care Reform” instead of single-payer universal health care. Obama has continued the destruction of public education.
Most tragically, Obama and the Democrats are now implementing the destruction of Social Security.
Mr. Trumka, the time is now, on this Labor Day, to renounce President Obama’s anti-labor corporate agenda and announce that you can no longer support the Democratic Party, now completely inebriated with corporate money and corporate agendas.
Mr. Trumka today, on this Labor Day 2010, announce that the AFL-CIO is now calling for the foundation of a new political party that will be “of, by and for” the economic interests of working people. By 2012 the new party should be established with a platform and candidates to run at every level of federal, state, and local government, up to and including a candidate for President of the United States.
The effect of this historic announcement would once again restore the hope for needed change held by tens of millions of desperate working people.
Get it straight, Obama did NOT bail out the banks. That was rushed through before Bush left office. The bill that passed after Obama took office was a formality, because the way the original bill was written, if Obama and Congress had decided not to debate and vote on the second $350 Billion (or whatever it was), it would have been _automatically_ paid to the banks, without Congress having any authority to track where it went.
Let's put it this way, Progressive_Patriot: Obama has CONTINUED many, if not most of Bush and Clinton's worst policies, including the bail-out of the banks, instead of rolling them back, as he promised.
Again, Get it straight, Obama rushed back from the campaign trail to vote for the bailouts. More Republicans than Democrats in Congress voted against the bailout.
Obama has appointed all Wall St insiders to his econmic team and has showerrd the banks with money.
The bank bailout was a bi-partisan effort as was the original de-regulation that caused this bank bubble under Clinton.
If you want accuracy, than do your homework and be accurate yourself. To say that Obama bears no blame for the current crisis is utter partisan nonsense.
the bailout was a paltry $700B... originally voted DOWN by the REPUBLICANS... and yes... 6 months before obama's inauguration...
what he DID do... is keep bernake on... not to mention geitner... summmers... et al... all disciples of deregulation...
what the treasury has done... SINCE the bailout... against $700B CHUMP CHANGE... is take 1.75 TRILLION and counting onto IT's balance sheet... another 8-10 TRILLION in actual and perceived backstops to the OCEAN of WORTHLESS paper STILL HELD by the banks... they can put that WORTHLESS CRAP up as collateral... get TREASURY LOANS at 0.25% and speculate... speculate.. speculate...
the banks should all have been nationalized day 1... wound down... and written down to actual vs. face value... obama COULD have take bolder steps... but has stopped short of disrupting the financialized do nothing bubble asset economy...
2 years later... we have credit card interest capped at 29.99999%... larger print for outrageous and ever more ingenuous fees... but derivatives remain unregulated... high speed trading transaction tax non existent... and the NEXT bailout codified into law... $400B is "pre authorized" for the NEXT bubble burst...
NOW... take an underwater homeowner... there's ONLY 64 MILLION of them... but let's just take one... after 18 months of wrangling with the servicer / bank / or note owner MAY get an EXTENDED term 30 to 40 YRS at a slightly reduced rate... with fees... and zero reduction in principle... compared to wall street banks who get 100 cents on the dollar for crap - some not worth 10 cents on the dollar...
obama didn't pass the bailout... but he's not done much of anything that'll help those most in need of a hand up...
oh... did i forget to mention the dismantling of social security and medicare - due for announcement dec 31... surely 5 pm on a holiday friday...
oh and all those post-bailout bailouts mentioned above... they're on your tax bill... 13.3TRILLION nat'l debt... and counting... it is mathematically impossible to pay off...
but at least i have mandated healthcare...
hope... isn't action. better than mccain/palin... but not by much... ship's sinking a little slower... that's all.
But according to Sharron Angle, McDonald's has jobs for all of us.
What an idiot that woman is, and the polls say she's running neck-and-neck with Harry Reid. At least Reid isn't STUPID.
Harry Reid's in trouble for selling out. He wouldn't be tied with Angle if were half as good as GIVE 'EM HELL HARRY ! Harry Truman gave hell to the ruling class while Harry Reid gave hell to the labor class. No poll would wanna tell him that though. Reid must go anyway and so too the Democratic Party. Republicans need to go too but the majority of voters only pick between two evils in every election. Where's the Green Party in NV?
"Progressive_Patriot September 4th, 2010 2:15 am
Get it straight, Obama did NOT bail out the banks. That was rushed through before Bush left office. The bill that passed after Obama took office was a formality, because the way the original bill was written, if Obama and Congress had decided not to debate and vote on the second $350 Billion (or whatever it was), it would have been _automatically_ paid to the banks, without Congress having any authority to track where it went."
If this is so, then it should be understood by those who are (IF this is true) misinformed and blaming the wrong guy (on this instance!)
~SC
Get it straight, Obama rushed back from the campaign trail to vote for the bailouts. More Republicans than Democrats in Congress voted against the bailout.
Obama has appointed all Wall St insiders to his econmic team and has showerrd the banks with money.
The bank bailout was a bi-partisan effort as was the original de-regulation that caused this bank bubble under Clinton.
If you want accuracy, than do your homework and be accurate yourself. To say that Obama bears no blame for the current crisis is utter partisan nonsense.
We know the reality that no third party person will get elected to any national office and the next congress will be deadlocked.
Isn't this what the revolution has been waiting for?
Soon revolution will be marketed as something every one is entitled to.
They copped the last revolution too didn't they?
We have been down this road before.
The greater evil's turn at the wheel is back again.
The truth is the see saw.
The only thing a deadlocked congress can do is pass crackdown laws on the "rebels" who will be trying to survive the hard times to come.
Rule number 1:
avoid angry crowds and doomsday predictions like this.
Simple solutions for simple minds. We aren't going to tax our way out of this mess. Some real suggestions:
1. End these failed wars of foreign aggression. Reign in the imperialist corporate fascist filth that runs this country.
2. End this corporate fascist orgy of exploitation and oppression. Nurture growth of local manufacturing instead of sending it to far-flung regions of the world.
3. Start developing alternatives to fossil fuels. There should not be a roof in America that does not have solar panels on it. How many jobs would that create?
4. Build an interstate mass transit system. How many jobs would that create? How many cars taken off the roads?
That's just for starters.
If you should ever run for office, Lefty, I'd vote for you in a minute.
If it's only the top 1% that have all the money, it shouldn't be that hard to cut a few out of the herd off to one side.
Then BLEED'EM good, take every nickel of their billions and dump'em in the east river. Quiet like, next thing you know we got and extra few trillion in the account and a few missing persons, homeless guys of no relavance to anyone.
They never played fair,,, why should we??
>^^<
AND....
Stop having so many damn children! Get it fixed already.
Three additional children PER SECOND on a finite planet.
First look in the mirror before pointing fingers.
If not for immigration, The US would have zero population growth.
Your anti-child point of view is revealing given your screen name.
Just a little personal bias is showing maybe?
We are all slaves.
Debt is a big scam and permeates every aspect of our lives and keeps us all trapped.
We are awash in fear mongering to the point that we are all half-crazed.
The government is owned lock stock and barrel by corporations.
All of the politicians are a bunch of blood sucking vampires.
We are enslaved. We really, actually are. Walking and driving around and shopping blah blah is all window dressing. We are in prison. It is a big prison. "Seal the borders" for security? Hah. We are being sealed in.
We are in crazy land here, and ANYTHING we do to break out of that is worthwhile - almost nothing is happening to break out of it now - and we have absolutely nothing to lose.
People here are miserable - they are in pain and suffering.
We are intentionally being kept sick, demoralized, and fearful.
We can't see the trouble we are in, because we have nothing to compare to.
The national political discussion is a joke.
The Democratic party politicians should all be tarred and feathered and run out of town.
America is a society gone completely mad. We live in a big prison. It is pathetic. Fear keeps us locked in. We are so saturated with fear, that it would not be off the mark to say that fear is the only thing happening here, and that anything else is ruthlessly suppressed and punished. And we are all trustees. Anyone refusing the role of trustee is isolated and viewed and treated as a pariah. That is not to say that we cannot overcome this - not in the least. We have to fight, though, every hour of every day and break the spell.
Demoralization coupled with fear - all of the thinking and speaking around us everyday is just laced with those two.
Let's smash it up. Let's never rest until we do. Nothing else is anything but a waste of time.
mcoyote: A great post, so on the mark.
concur
I hear you.
"America is a society gone completely mad. We live in a big prison. It is pathetic. Fear keeps us locked in. We are so saturated with fear, that it would not be off the mark to say that fear is the only thing happening here, and that anything else is ruthlessly suppressed and punished. And we are all trustees."
well stated, we're all guilty and if we step outside of the parameters of accepted speech, well remember MLK and malcolm X ? the corporate masters don't even have to violently neutralize their opponents, there's always the loony bin and the ability to discredit/marginalize any opposition through MSM.
welcome to hell.
...peace...
The American people are wasting their time looking for Obama and the democratic party or any other president to enact radical social change.
The U.S. Presidency and the U.S. Congress are the stooges for Wall Street and the war mongering corporate military complex. This is where the ruling capitalists make all their money. The super rich and the corporate capitalists have rottened our nation to the core.
Radical changed can only come from below. Our mass media and leading universities are presently owned by the dirty rotten system. This must change. Christianity in America has been poisoned by the love of capitalism. This is the price so many of us are now paying for being so selfish and clueless and being indifferent to the struggling poor. The capitalists don't care about the poor, now they are oppressing the middle class. They want it all.
Americans must take to the streets, a revolution is the only answer. We must become martyrs for future generations. Many will die but our numbers must overwhelm national security.
The reality is that the rich capitalists and the corporate elite are destroying the world. They are drunk with power. This power must be taken away from them.
I really see no other way. Then and only then will the American people understand the absolute necessity of a true and honest democracy, a democracy that works for the common good. We the people must get in touch with our own humanness. Consumer capitalism has deadened the American soul. The system is now so rotten that it cannot be fixed. The only course of action is revolution. How do we get it started is the big question.
Let's not kid ourselves, we have never had a true democracy in our nations history. It is time we did. A true form of democratic government is the only answer. When the dust settles after the revolution, the U.S. will have to be re-educated about the critical dynamics of participatory democracy. Re-education of the American people will have to start in our churches, synagogues, mosques, schools and universities.
America will have to start all over. If the people are sufficiently informed, they will always be smarter than their leaders who can be counted upon to be corrupted by power and their big egos. More democracy is the only anwer.
COMES NOW -- MAN WITH EXCESSIVE WEALTH
Frederick Johnson
“Could you provide a link for evidence
of those numbers? Thanks.”
LIGHT
Could you first provide a link that refutes those numbers?
For common horse sense, either you have it or you don’t.
UNEMPLOYMENT -- BY CLASS
0% -- High Society
0% -- Country Club Class
3% -- Educated Middle-class
30% - Laboring class, the 49% of society without a high school diploma
Another mainstream pundit commentary in which Reich complains about the results of a disfunctional 2 party system and all his only solution is for the two parties to shape up. I guess Reich doesn't want to address the real problems as he may lose his Sunday morning political talkshow slot.
MODERN CHRISTIANITY -- IS IT MORAL?
Stephen V. Riley
“Christianity in America has been
poisoned by the love of capitalism.”
LIGHT
But what about the dark ages, the Catholic Vulgate Bible riddled with contradictions that started the dark ages in AD 391? What about all bibles, all published by the rich, being identical in thought to the Vulgate Bible?
For all it takes is one contradiction in a book for a reader to consider it all fiction. So the rich created the bible to be saturated with contradictions to establish a religion saturated with hypocrisy, which started the Christian Crusades to invade the Middle-East, an invasion that continues to this very day.
For first the bible commands everyone to be pacifists, “Do not use force to overcome evil. If they strike you on the right cheek turn to them the other also.”
Then comes the hypocrisy of Romans 13:1, the command to bear the sword for government, to kill in the name of God because, “The authorities that exist have been established by God... for the authorities are God’s servants.”
Catholic Vulgate Bible, compare it to your bible: http://www.drbo.org/
John: The history of Christianity is a very easy target. Christianity was corrupted when it joined forces with the Roman Empire and developed its own visions of empire. Since then it has been further corrupted by institutional power and the human ego.
But such institutional corruption is not limited to Christianity and the Catholic Church. What about the institutions of Wall Street, the Pentagon, corporate capitalism or most institutions of power that are only concerned with their own perpetuation.
From where I am active in the Emerging Christianity movement, I see Christianity maturing. Because of this, the institutional Catholic church is digging in its heals and circling the wagons. It is scared to death of a maturing Christianity. Increasing number of Christians do not take the bible literally. It is more about connecting the dots in the bible and engaging in spiritual discernment, recognizing how the bible can address the signs of our time.
It is easy to criticize Christianity, but not the mind of Christ. Institutional power must be recognized as the true evil of our times.
Thankfully, the American people are not nearly as stupid as the Pol's or some folks here would like to think they are.
They certainly understand that you cannot spend your way out of recession or depression in peace time. Its been tried many times and never once worked.
The thing that many are seeming to miss is the fact that you CANNOT make any changes till you fix what you have.
And you cannot fix our economy by raising taxes in the middle of a recession/depression. For once ther republicans are right, most of Lord Bushes tax cuts should stay for the moment.
You cannot fix our economy by starving the small business which employs above 70% of all employees now.
You cannot fix our economy by ignoring the policies, trade and tax laws (or lack thereof) to pursue politics or personal agenda's.
You cannot fix our economy by attacking your own citizens or the American worker.
No one is going to take to the streets, there won't be any revolution nor do our citizens need to be "enlightened", they know what needs to be done.
You may not like it, it may not fit certain ideologies, but the democrats are just beginning to understand it. Watch the rats run for cover and desert the SS Pelosi as it goes down.
Step out from behind that tree and you will see the vast forest.
“most of Lord Bush’s tax cuts should stay for the moment."
Empire USA since 1945 has plundered half of all the capital on earth, our High Society now having clear title to it. Do not tax it, nationalize it and dear conservative, if you have more then a million nationalize that too.
The Keynsian economic policies and government regulation that followed WWII and ended with Reagan provided stability and economic growth. Deficit spending must continue or the economy will shatter.
The Bush tax cuts must be repealed and the wars must be ended in order to bring down the deficit.
It cannot, as you indirectly suggest, be balanced on the backs of the workers. Without increased tax revenue on the rich, the only way to balance the budget is to cut social programs.
The economic progarm that you suggest is the one being proposed by the corporatist deficit hawks and will cause a depression.
Your rhetoric states that "You cannot fix our economy by attacking your own citizens or the American worker" but that is exactly what your conservative economics will do.
The only positive note is your general suggestion to reform trade laws.
"The practical choice we face is this: Either major action to reverse the jobs emergency or years of intolerably high unemployment coupled with demagoguery and scapegoating."
& so it will be Robert! When the GOpers return to power it will be demagoguery and scapegoating non-stop 24/7. Why? because the D's are spineless whores who have betrayed the very people who put them in office. The bottomless disgust and anger @ the Obama admin. and the D party will drive all of them into permanent exile and oblivion. Were looking at 30 more yrs. of reactionary Gov't because these swine have destroyed the Progressive brand.
And the poisoned, corrupted, and polarized atmosphere will commence full speed ahead.
But "the Progressive brand," is it not also of the upper half of society, the voting majority most aggressive and wealthy? And progressives, do they not all have great jobs, terrific homes and deluxe healthcare?
If you have faith in man then become a socialist, the only system free of hypocracy. Otherwise be like me and loose all faith in society.
Reich and other economists basically factored out working people in their quest for corporate profit maximization. Now the reality of their myopia has manifested in the form of joblessness and for many hopelessness. Economists be damned!!!
They stopped feeding the goose that laid the golden egg. Now they are wondering why are there no golden eggs? It is purposeful that they continue to withhold feed from the goose; yet, they continue to feed the greed. Hubris!
Such is capitalist Reich, a college professor with blind faith in the capitalist rich who so love their excessive wealth.
Reich was a voice for labor in the Clinton Administration. He was sidelined and basically ignored.
If you read more of Reich, you would see that he is about as good as it gets with Establishment political figures.
His Liberal Capitalist ideas are lacking in many areas, but he is vastly preferable to the the Reactionary Republicans and the Robert Rubin protges in the O'Bomber Admn.
FAKE MORALITY -- FICTION SALVATION
Stephen V. Riley
“I am active in the Emerging Christianity movement,
I see Christianity maturing…
Increasing number of Christians do not take the bible literally.”
LIGHT
But do they take Scripture literally, the hand written manuscripts written by God the Holy Spirit actually? For Scripture contains none of the contradictions found in bibles.
TRUE TEST
(1) Are all in your group pacifists?
(2) Do they believe that excessive wealth is satanic?
(3) Do they believe that this day of life is more then they deserve?
I think I am seeing the next WORSE that is to come. Right how, I seem to be running into a lot of 1099 job offerings.
As I understand it, the 1099 is an independent contractor, who gets a lump sum payment for a job with a specified end date. The independent contracor doesn't work hourly, nor are they considered an employee because they take no direction from the person that hired them. They pay all of their own taxes and pay quarterly to the IRS. They have no workers comp or any unemployment benefits
O.K. that is what I think I understand about an independent contractor, but so far I have been offered 3 of these jobs, and it makes no sense to me. If I go to work at a place and am paid hourly, and am under the direction of a company, then I am NOT an independent contracror. Howvever, I am finding more than a few compaines who say this is correct, and that I am wrong!.
I won't take those jobs because it seems like I am going back to the olden days when people worked piece meal for whatever they produced. I suppose that this is one way to privatize social security and get rid of workers comp, and unemployment. Except that the laws right now are very specific about what is an independent contractor.
I am waiting now for the really crazy people in Congress to do away with all these worker protections, and this is a scary thought to me. The fact that so many are offering these "independent contractor jobs" that AREN'T independent contractor jobs ar all is kind of freaky. I can just hear some applauding this as it makes "less paperwork" for the employer. All Congress has to do is change the laws, I guess.
People went from salaries with benefits to hourly with no benefits and I suppose that the next crazy thing will be to make everyone an independent contractor where we all pay all out taxes and have no protections. Business will still get huge tax write offs ( still for no reason.) I suppose that's when jobs will come back to America, when workers have no protections and pay all of their own taxes, and social security, and workers comp and unemployment are gone. See, we will all be privatized in everything!
Then, LABOR DAY will be an archaic term, and business won't have to lie about why they aren't creating jobs! We won't have jobs, we will have servitude positions. And I thought the" intern" scam was bad! Please argue with me, because this is a very depressing future!
The companies are wrong about the legality of their 1099 scam. If you work at an hourly rate at the business location and take direction from someone in the company, you are an employee not a contractor.
The practical consequences are that if you are let go (not for misconduct), you may qualify for Unemployement (varies by State - CA is good on this) and the company will be fined and have to pay in all the UI contributions that they scammed around using 1099.
Also the company will be on the hook for employer Fica contribution of 7 and some odd percent. As always you are liable for the employee 7.5% and for income tax.
You can report these companies even if you did not take the job.
Contact the IRS. They are happy to come down on this sort of fraud.
Whistleblowers also may provide allegations of fraud to the IRS and may be eligible for a reward by filing Form 211, Application for Award for Original Information, and following the procedures outlined in Notice 2008-4, Claims Submitted to the IRS Whistleblower Office under Section 7623
Dear dreamjoehill:
THANK YOU! I hoped that I was right, and that the companies were wrong , but it is so frustrating that they are doing this. Thank you for the whistleblower information too! This is why I love commondreams, the ANSWERS!
The "1099 independent contractor" classification is the biggest scam against the US worker right now.
If you believe you are being improperly classified and therefore having to pay more payroll taxes and being denied benefits, then you can file a Form SS-8 "Determination of employee status" to the IRS. It will take a couple years for your case to be determined - maybe longer now. If you are confident you will get a favorable determination then ONLY pay your employee share of the SS and medicare tax, using form 8919, for the tax returns until you receive a determination.
When you file a SS-8, there is no assumption of anonymity, nor are there laws against employer retaliation. (I'll check this) Filing an SS-8 is basically a whistleblower action too, so you need to be prepared to get fired for it.
Also, once someone wins a determination, I don't think the IRS actually goes after the employer to start properly classifying the other employees and paying their full benefits.
Excellent points made. I have seen this trend here too, even among white collar positions that formerly had full benefits before 2008. It seems like we are heading back into fiefdom.