More than in any other branch of the country's economy, real estate crisis might be the thermometer US middle class' distress and the looming destruction of the American dream of home-ownership.
Mortgage abuses and frauds, banks games of hedges, CDO's and Credit Swaps, uncontrolled financial schemes are of course signs of the bad course we're on. However, they are not the whole story.
They are in fact relatively correctable issues that can be addressed with regulations and government controls.
What hasn't been addressed and will not be any time soon is the continuous deterioration of employment and salaries.
We hear our legislators and our president planning on the creation of new jobs and new opportunities. This sounds so ridiculous when we read every other day about thousands of American jobs lost, small businesses closing doors, corporation shipping away their research and development departments, their calls centers, their accounting and their software engineering to India or China.
Who are we going to sell these condos and these homes to? Or are we going to end up as humorously said by somebody "selling insurance policies to each other" ?
A substantial part of realtors' activity has been switched to selling a large part of whatever is being sold now, to foreigners, Canadians, French, Japanese, you name it. Because these people are gradually becoming the only ones who can afford buying a home in America. And I am not being xenophobic, just observing facts.
Read for example the following article from the St. Petersburg Times in Tampa. It's the symbol of our times.
Observe that we are not losing blue collar jobs. They have been gone long time ago. It's not about U.S. Steel, or G.M. assembly workers.
What we see now are the very same high-tech class of workers that we are supposed to become, by going back to school to retool our knowledge, learn, and prepare for the new times and the new careers. These jobs, businesses, technologies, that were supposed to keep our country in its traditional position of economic dominance, and sustain the prosperity and livelihood of our middle class.
Read on:
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PricewaterhouseCoopers to lay off 500 workers, mostly in Tampa
PricewaterhouseCoopers will lay off about 500 information technology workers, most of them in Tampa, as part of a broader push to outsource to cheaper labor.
The news is an untimely blow to Tampa Bay's economy, which is already battling a 12 percent unemployment rate, the fifth-highest among the country's largest metro areas. It also comes amid a recent resurgence in mass layoffs and growing concern nationally that the economy might slip into a double-dip recession.
"It's just terrible news," Tampa Mayor Pam Iorio said Friday. "It's a terrible job market for those people to find other jobs and I'm very sorry to see it happen. … They're moving jobs away from this community and that's a negative. And it's a negative to our national economy when jobs are moved overseas."
PWC spokesman Jonathan Stoner said the consulting powerhouse employs 1,100 in its information technology group nationwide. Of the 600 remaining employees, most will stay in its Tampa hub, he said. With four locations and 1,850 employees in the Tampa Bay area as of early this year, PWC has been one of the region's top employers. In March, it ranked No. 3 among large bay area companies in the Times' Top Places to Work survey.
Iorio said PWC did not approach the city asking for incentives to keep workers here. "If they're making a fundamental decision to move jobs overseas to reduce labor costs, that's a business decision," she said, "and I don't think there's anything any American city can do to compensate for that."
Stoner said the decision stems from a combination of PWC's information technology groups in the United States and United Kingdom.
"The U.S. and UK firms are combining governance, organizational structure and business processes and a single, Indian-based vendor will provide service to both member firms," he said.
Other reports identified Tata Consultancy Services of Mumbai, India, as the vendor, but Stoner said the company does not comment on clients or third-party contracts.
He also disputed one report that employees were told they would have to reapply for positions at Tata. "What we have told our employees is that they are all to be encouraged to apply for other positions at the firm, at PWC."
Throughout the recession, corporations have continued to outsource jobs to Indian vendors to save money, with Tata often reaping the rewards.
Idearc Media, which publishes the Verizon Yellow Pages, laid off 150 employees in St. Petersburg in December as it transferred much of its publishing business to Tata. Ratings agency Nielsen Media Research also turned to Tata for cheaper labor in laying off 170 information technology employees at its Oldsmar complex in 2008 and 57 in November.
Workers found out about the Pricewaterhouse layoffs on Thursday, coming in the wake of PWC cuts elsewhere statewide, including the shutdown of its tax practice office in Orlando.
A half-dozen workers exiting PWC's Lakepointe office complex on Dr. Martin Luther King Jr. Boulevard on Friday said they were in shock, but were warned by managers not to speak publicly. Workers said the company had not given details on severance packages nor a specific time line, except to indicate cuts would likely be completed by the end of the year.
One worker, an Indian contractor for PWC, said the project he's working on will likely be shut down, leaving him with bittersweet emotions: He's sad for his colleagues here and happy for people in India.
As recently as a month ago, Florida economists were pointing to a slowdown in mass layoffs as a sign that the economy was starting to recover.
But July has been a particularly brutal month based on recent mass layoff notices filed with the state. Among them: 892 workers affiliated with the Kennedy Space Center; 320 with the GEO Group in Graceville; 81 at LifeLink HealthCare Institute in Tampa; 245 at Lockheed Martin Corp.; 344 at Kehe Distributors; 221 at Mosaic Fertilizer in Fort Meade; 100 at Bank of America's Idlewood Avenue location in Tampa; and 67 at Enterprise Leasing in Tampa.
All told, 16 layoff notices have been filed in July affecting 2,864 workers statewide. That doesn't include this week's cuts by Pricewaterhouse.
And, as a Spanish poet said: The Rest is Silence
Henry B. Nathan is a Real Estate Professional. Please visit our website and learn about:
