Unemployment Rises to 9.7 Percent; 216,000 Jobs Lost in August
September 4, 2009
Washington Post Staff Writer
Friday, September 4, 2009; 9:27 AM
The job market continued its long, steep decline in August, with the jobless rate soaring to 9.7 percent and employers continuing to shed jobs, albeit at a slower rate than expected.
Analysts generally believe that economic output began rising by late summer. But new Labor Department data released Friday morning shows that that improvement isn’t yet flowing through to the job market, as employers remain highly reluctant to add staff.
The rise in the unemployment rate rose to 9.7 percent in August, from 9.4 percent in July, resumed a steep upward path that has been only rarely interrupted since the recession began in December 2007. Employers shed 216,000 net jobs, significantly better than the revised 276,000 jobs lost in July and less than the 230,000 decline that forecasters expected.
The tally now stands at 6.9 million jobs lost since the beginning of the recession in December 2007. A broader measure of joblessness rose even more sharply than the headline unemployment rate. An expanded unemployment rate that includes people who have given up looking for a job out of frustration and who are working part time but want a full-time job rose to 16.8 percent, from 16.3 percent.
The rate of job losses has been declining, if haltingly, since winter. The August numbers, bad as they are, do offer hope that job losses will continue tapering off. Economists generally consider the job loss numbers to be a more reliable month-to-month barometer of the economy than the unemployment rate, and that measure indicated the slowest rate of job loss since August 2008.
The report also said that the average workweek was unchanged at 33.1 hours. Employers have cut back on hours in the current downturn, in addition to cutting jobs entirely, and are expected to have existing employees work longer hours before bringing new people onto their staffs. The hours-worked number confirms that employers have stopped cutting back hours but gives no evidence they are starting to expand hours yet.
Among the most positive signs in the report, average earnings for non-managerial workers rose 0.3 percent in August, the Labor Department said.
The job losses, though lower than in recent months, remained broad-based. The construction industry cut 65,000 jobs, in line with the recent trend. Manufacturing companies cut 63,000 jobs. The health-care sector, as it has throughout the recession, added jobs.
Stimulus Spending Fails to Follow Unemployment, Poverty
August 6, 2009
August 6, 2009
Written by Michael Grabell and Jennifer La Fleur as reported in ProPublica
Since the economic stimulus bill passed nearly six months ago, the Obama administration has repeatedly pledged that the money would reach middle America, seeping into the communities hardest hit by the recession.
But analysis of the most comprehensive list of stimulus spending to date found no relationship between where the money is going and unemployment and poverty.
Stimulus spending is literally all over the map, according to ProPublica’s analysis, which examined nearly all the contracts, grants and loans the government has reported awarding. Some battered counties are hauling in large amounts, while others that are just as hard hit have received little.
Take Trigg County, Ky. [2], where unemployment was 15.8 percent in June after the auto industry crisis rippled among suppliers. The stimulus has chipped in $1 million toward a biofuels facility and $30 million for a road project. According to the data, the county has been awarded $2,419 per resident.
But LaGrange County, Ind. [3], hasn’t fared so well. Despite having the identical unemployment rate, it has received only $33 a person. The community is still trying to recover after recreational vehicle plants shuttered last fall. Yet the stimulus has provided little more than the education and rural housing money that every county is scheduled to receive.
For months now, Democrats and Republicans have debated whether the stimulus is trickling down to communities that need it most. Much of the available evidence has been anecdotal, however, or based on studies that examined only transportation spending or a smaller list of projects.
The debate accelerates today as President Obama and Vice President Joe Biden visit Elkhart, Ind., and Detroit for a progress report on the economy that will again highlight the stimulus. What the available data show is that spending is uneven and sometimes runs contrary to measures of need.
Elizabeth Oxhorn, the White House stimulus spokeswoman, said much of the money thus far has moved through existing grant formulas that don’t take into account regional economic swings. But as some newer stimulus programs kick in — such as economic development grants and money to hire police officers — there will be more discretion in where to send dollars, she said.
“Where we do have opportunities to target assistance and programs that are meant to help hard-hit areas, we have done that, particularly in the hard-hit auto communities,” Oxhorn said.
First Look at County-Level Spending
Overall, the stimulus program will pump $787 billion into the economy, including tax cuts.
To assess what has happened so far, ProPublica combined all the data on the federal stimulus Web site, Recovery.gov, with reports from other government sources into a list totaling $120 billion worth of stimulus spending. Of that, ProPublica examined $55 billion that could be traced to the county level.
Getting a complete accounting of the stimulus is nearly impossible because some of its largest elements — tax cuts for individuals, increases in Medicaid and unemployment — aren’t being tracked to the local level or have yet to be distributed by the states.
While those programs clearly benefit individuals hurt by the recession, they aren’t intended to create or sustain many jobs, as with dollars aimed at infrastructure or schools. The 7 percent of overall stimulus funding in ProPublica’s analysis is the broadest, most complete snapshot of spending to date.
The largest categories are highway projects, Pell Grants for low-income college students and funding to school districts for disadvantaged students. The data also include airport grants, small business loans, housing assistance, nuclear cleanup and military construction contracts.
ProPublica tested the relationship between spending per person and several socioeconomic and demographic factors across more than 3,100 counties and equivalent areas, such as Louisiana parishes, to see if there was a statistically significant pattern in the way money has been allocated.
Nationwide, the results showed no significant relationship across counties when spending was compared against unemployment, poverty, race and income. Looking within state boundaries, spending did have a relationship to unemployment in a few cases — but not always in the same direction.
In New Jersey [4], for example, counties with high unemployment were more likely to get more stimulus money per person. The opposite proved true in Michigan [5], which has the nation’s highest jobless rate at 15.2 percent. A searchable list of county stimulus projects and demographics is here. [6]
Nuclear Cleanups Boost Rural Counties
The biggest winner so far — at nearly $12,000 per resident — is Thomas County [7], an area of 583 people in the Nebraska Sandhills. Unemployment there is 4.8 percent, about half the national rate.
Judy Taylor, chairwoman of the Village Board in Thedford, said the majority of residents consider the main stimulus project, a $7 million viaduct over the railroad tracks, a waste of money.
“Out here, there seems to be plenty of work for people,” said Janice Hodges, whose family owns a gas station nearby. “It probably could have been better used somewhere else.”
Overall, the counties faring the best in the stimulus program are sparse communities with a giant road project — such as Brooks County [8], Texas, or Hocking County [9], Ohio — as one expensive project to a county with few people can skew per-capita figures.
Other counties doing well are home to Cold War weapons plants. The stimulus includes $6 billion to clean up and dispose of waste in 12 states, and those were among the first contracts awarded.
Thanks to the massive cleanup of the Hanford Nuclear Reservation, Benton County, Wash. [10], has received more than $1.5 billion — second only to Los Angeles County’s [11] $2 billion in total funding so far. Benton County’s per capita spending: $9,300.
In metro areas, per-capita spending varies. LA County’s funding equates to $215 per person. New York County [12], which covers Manhattan, is receiving $610; its neighbor, the Bronx, is getting $185. Palm Beach County, Fla., is receiving $57, and Wayne County, Mich., epicenter of the auto industry meltdown, has received $183 per resident — about the national average for spending that could be tracked to the county level.
Some well-off counties are benefiting greatly.
Summit County, Utah [13], home to Park City and several upscale ski resorts, is one of the wealthiest counties in the country with a median household income of $83,000. Under the stimulus so far, it’s received $659 per person.
The money includes a $15 million interstate paving project, a $5 million bridge replacement, $1 million for sewers and sidewalks on Main Street in Coalville, and a $570,000 small-business loan to a Park City oral surgeon.
John Hanrahan, chairman of the Summit County Council, said the highway and bridge projects are in the rural part of the county and are mainly used by long-haul truckers rather than residents.
“It doesn’t necessarily help a farmer a lot for hay or gas,” he said. “It doesn’t affect the ski industry. We still have a significant portion of the population who are struggling with this recession.”
Hanrahan’s point underscores one of the basic uncertainties when determining who benefits from stimulus dollars. Money spent on a project doesn’t necessarily stay in the community. Construction workers often drive through several counties to job sites.
“People will live in one area and work in another,” said Mark Zandi, chief economist for Moody’s Economy.com. “Some county in a region could be getting more money but it could have a beneficial impact on other counties in the region.”
Obama’s Pledge: Help Is on the Way
When Obama launched the stimulus package in February, he visited Elkhart, a city that had seen its jobless rate skyrocket from a 5.8 percent in October 2007 to 20.8 percent this March.
The next day, he visited Fort Myers, Fla., which had been pummeled by the foreclosure crisis. Since then, administration officials have repeatedly visited auto industry towns to promise help.
Trigg County is one struggling area that has seen a flood of stimulus money. The county, on the Kentucky-Tennessee border, northwest of Nashville, has about 13,000 residents but received $32.5 million.
The county’s largest manufacturer, Johnson Controls, made car seat frames until it closed in March, leaving 560 people out of work. But right on the heels of that shutdown came $30 million in federal money for an ongoing project to widen U.S. Highway 68.
That stimulus money freed state funds already pledged to the $55 million expansion, protecting the contractor’s current workforce. State officials said it might have stalled without the stimulus.
The U.S. Forest Service awarded $2 million in contracts to clean up the Land Between the Lakes recreation area, which had been devastated by an ice storm. The agency also gave the county a grant for a facility that will convert wood to fuel to power a local hospital.
“When you tally it up and see the dollars that will come into our area through the stimulus, it is working,” said Stan Humphries, Trigg County judge-executive. “It doesn’t move as fast as we would like or reach as many families as we would hope for. But we feel that we are getting our share of the funds.”
Big Pots of Money Hard to Track
Edmund Phelps, a Nobel laureate who is director of Columbia University’s Center on Capitalism and Society, said it’s no surprise that spending so far doesn’t relate to characteristics like employment or poverty. To get money out quickly, the government relied on funding formulas that aren’t designed for an economic downturn. “It’s kaleidoscopic,” he said of the stimulus. “And it was all done very quickly.”
Some of the largest pots of money — tax cuts, food stamps and Medicaid assistance — go to more than 100 million individuals, and government auditors are struggling to estimate the local impact.
“Can you send a man to Jupiter? In theory you can,” said J. Russell George, the Treasury inspector general for tax administration. “We could in theory track every dollar, but you have to consider the expense and the time it would take to do that.”
For other types of spending programs — such as the $54 billion to stabilize state budgets and help local schools, or $6 billion to build water and sewage treatment plants — the money trail stops at the state governments, which are still deciding how to divvy up the funds. Only a fraction of the stabilization money has been sent to the states from Washington.
Other programs, such as transit grants, mask where the jobs are created. When the Akron, Ohio, transit authority bought 19 buses, for example, it created work at local rubber suppliers — but also at the plants that made the buses in Kansas, North Dakota and California.
“It’s difficult to take into account all of the different dimensions,” said Steve Murdock, a former Census Bureau director who is a professor of sociology at Rice University. “You have populations with various kinds of needs and local economies that reflect different kinds of conditions.”
Elkhart’s Poor Cousin Next Door
As Obama returns to Elkhart, he might want to consider LaGrange County just to the east.
While Elkhart County has been awarded about $169 per resident — a little less than the national average — LaGrange has received just $33 a person, according to the data.
Both counties saw their economies crater last year when high gas prices and tight credit made it difficult to sell recreational vehicles, a primary industry there. Dozens of factories, dealerships and suppliers shut down while thousands lost their jobs.
LaGrange County has several needed transportation and infrastructure projects, said Keith Gillenwater, the county’s economic development director. But so far, it has been shut out of any of the federal highway funding doled out by the state government.
“It’s frustrating,” he said. “To me there’s a lot of disparity that should be re-examined and taken into consideration.”
ProPublica is America’s largest investigative newsroom.
Students interested in pursuing a job in sustainability now can choose from a variety of “green” degree programs.With an increased interest in the environment and growth in the “green collar” job sector, colleges and universities are beginning to incorporate sustainability into their programs. From MBAs in sustainable-business practices to programs that give students the technical training necessary to operate wind turbines, students have an increasing array of options to choose from.
GOING GREEN: Strikes a chord with collegesVERMONT: Students dig into organic farmingIN-DEPTH: Get your eco-score, see latest environmental headlines
“Clearly, demand is there for these types of workers,” says Marisa Michaud of Eduventures, a higher-education research and consulting firm. “Colleges are seeing that, and they want to provide appropriate educational programs to meet that demand.”
Concern for the environment is the motivation, says Julian Dautremont-Smith of the Association for Sustainability in Higher Education.
FIND MORE STORIES IN: University of Pennsylvania | The Princeton Review | Wharton School of the University of Pennsylvania
“The past few years, society as a whole has become increasingly interested in sustainability,” he says. “Higher education has been swept up as well.”
David Soto of The Princeton Review says student interest is driving colleges to create programs that offer training in sustainability. Two-thirds of students surveyed for the company’s recent “College Hopes and Worries” survey said a college’s “environmental commitment” would be a factor in where they applied.
”Students are really savvy shoppers these days, so they’re realizing, with a changing economy and green jobs looking to take a leap within the next couple of years, that they want to be armed with those types of skills,” Soto says.
Green — not greed — is good
One popular program is an MBA that teaches skills for operating sustainable businesses.
A University of Pennsylvania program that started this year lets students earn an MBA and a master’s in environmental studies at the same time.
“There’s an increasing interest among businesses to take the environment seriously,” says Eric Orts, director of the Wharton School’s Initiative for Global Environmental Leadership at Penn.
”Our take is you really need to have the science background and some other approaches that are not normally taught in the business school context,” he says.
Architecture schools are responding to the increased interest in energy-efficient buildings.
Christoph Reinhart, associate professor of architectural technology at Harvard’s Graduate School of Design, says the school’s decision last summer to start offering a concentration in sustainable design was driven by interest from students and changes in the field.
”Over the past few years, there has been an increased interest and pressure to provide this knowledge in more depth, whereas before, maybe a class would have been sufficient,” he says. “Now there’s an expectation that more of these skills are being learned.”
Newly minted grads
Arizona State University’s School of Sustainability graduated its first class in May. The school offers a bachelor of arts and a bachelor of science in sustainability as well as a graduate degree.
Charles Redman, the director of the School of Sustainability, says the school takes an interdisciplinary approach.
Student Drew Bryck says what drew him to the school was the opportunity to study biology, economics and a variety of other fields.
Bryck says he is “fairly confident” his degree will help him land a job because the need for people with a well-rounded background in sustainability is growing, especially in the private sector.
The program resonates with students, Redman says; 300 undergraduates enrolled the first year it was offered.
Bucknell University in Lewisburg, Pa., will require all students to take at least one class that explores the human connection to the environment.
Dina El-Mogazi, director of the Campus Greening Initiative, says courses in a variety of disciplines will fulfill the requirement.
We feel that it’s very important, given the current state of the world, that students understand both the way the environment supports human life and the way human decisions” affect the environment’s ability to function.
A growing number of schools, including community colleges, are training students to operate green technology.
Kalamazoo (Mich.) Valley Community College will offer a 26-week program starting in October to train students in operating wind turbines.
Jim DeHaven, vice president for economic and business development at the college, says the school is offering the program to meet the needs of wind farms that are “scrambling” for trained technicians.
”They can really write their own future at this point because they’re needed at all the wind farms,” he says. “They don’t want us to wait and put people through a two-year program or a one-year certification — they want a fast track to employment.”
Unemployment in June…The Worst Cities
July 29, 2009
Written by Arthur Delaney
Unemployment rates climbed in all U.S. metropolitan areas from last June to this June, the government announced on Wednesday. Some of the jumps were dramatic. And the unemployment rate in 18 areas now surpasses 15 percent. Most of the hardest hit metro areas are in California and Michigan.
Of the 49 metropolitan areas with a population of over 1 million, the Detroit area once again claims the sad prize of highest unemployment, with a rate of 17.1 percent, up from 14.9 percent in May and an 8.1 percent point increase year over year. The Riverside-San Bernardino area came in second, with a rate of 13.7 percent, followed by the Charlotte area at 12.4 percent.
The large area with the lowest unemployment rate in June was Oklahoma City, at 6 percent. Second-lowest was the greater Washington D.C. area, at 6.6 percent.
El Centro, Calif., again recorded the highest unemployment rate of all metro areas, with 27.5 percent out of work.
The Huffington Post has been profiling regular folks dealing with the recession. Click here to see some of their stories.
Here’s a map from the Department of Labor’s Bureau of Labor Statistics that shows the damage. Areas in dark gray surpassed the national rate of 9.7 percent while areas in light gray were 9.7 or below in June.
Jobless Checks for Millions Delayed as States Struggle
July 24, 2009
WASHINGTON — Years of state and federal neglect have hobbled the nation’s unemployment system just as a brutal recession has doubled the number of jobless Americans seeking aid.
In a program that values timeliness above all else, decisions involving more than a million applicants have been slowed, and hundreds of thousands of needy people have waited months for checks.
And with benefit funds at dangerous lows even before the recession began, states are taking on billions in debt, increasing the pressure to raise taxes or cut aid, just as either would inflict maximum pain.
Sixteen states, with exhausted funds, are now paying benefits with borrowed cash, and their number could double by the year’s end.
Call centers and Web sites have been overwhelmed, leaving frustrated workers sometimes fighting for days to file an application.
While the strained program still makes more than 80 percent of initial payments within three weeks — slightly below the standard set under federal law — cases that require individual review are especially prone to delay. Thirty-eight states are failing to make those decisions within the federal deadline.
For workers who survive a paycheck at a time, even a week’s delay can mean a missed rent payment or foregone meals.
Kenneth Kottwitz, a laid-off cabinet maker in Phoenix, waited three months for his benefits to arrive. He exhausted his savings, lost his apartment and moved to a homeless shelter.
Luis Coronel, a janitor at a San Francisco hotel, got $6,000 in back benefits after winning an appeal. But in the six months he spent waiting, there were times when he and his pregnant wife could not afford to eat.
“I was terrified my wife and daughter would have to live on the street,” Mr. Coronel said.
Labor Secretary Hilda Solis said: “Obviously, some of our states were in a pickle. The system wasn’t prepared to deal with the enormity of the calls coming in.”
The program’s problems, though well known, were brushed aside when unemployment was low.
“The unemployment insurance system before the recession was as vulnerable as New Orleans was before Katrina,” said Representative Jim McDermott, Democrat of Washington, who is chairman of a House panel with authority over the program.
Now the number of unemployed Americans has doubled since 2007 to 15 million and the program is more than tripling in size. About 9.5 million people are collecting benefits, up from about 2.5 million two years ago. Spending is expected to reach nearly $100 billion this year, about triple what it was two years ago.
Given how suddenly the workload has increased, some analysts say the delays might have been even worse.
“Payments are later than they should be, and later than they used to be, but states have been overwhelmed,” said Rich Hobbie, director of the National Association of State Workforce Agencies, which represents the program’s administrators. “Considering the significant problems in the program, unemployment is responding well.”
The recovery act passed in February provided states an additional $500 million for administration. It also suspended interest payments through 2011 for states paying benefits with federal loans.
Unemployment insurance began as a New Deal effort with dual goals: to sustain idled workers and stimulate weak economies. States finance benefits by taxing employers, typically building surpluses in good times to cover payments in bad.
In 2007, the average state paid about $290 a week and aided 37 percent of the unemployed.
As downturns over the last 20 years proved infrequent and mild, states cut taxes, and the federal government, which pays administrative costs, reduced its support by about 25 percent. The states’ performance sagged.
In a recent report to the Department of Labor, Ohio said its computer problems “kept the system performance at a snail’s pace.” Louisiana said its call center was staffed with “temporary workers, with little knowledge” of unemployment insurance.
North Carolina said a wave of retirements had left it “unable to maintain pace or volume of work.” Virginia wrote “performance continued to be very stagnant” and called the odds of improvement “bleak.”
By 2007, 11 states were paying benefits so slowly they violated multiple federal rules, up from just two at the start of the decade.
While most eligibility reviews can be done by computer, about a quarter require a caseworker — to ensure, say, the applicant was laid off, rather than quit.
In the last year, states processed just 61 percent of these cases within three weeks — well below the federal requirement of 80 percent. More than a half-million cases, 6 percent, took more than eight weeks, and 350,000 took more than 10 weeks.
The Safety Net
Work-Based RewardsWith millions of jobs lost and major industries on the ropes, America’s array of government aid — including unemployment insurance, food stamps and cash welfare — is being tested as never before. This series examines how the safety net is holding up under the worst economic crisis in decades.
Multimedia
Of the 12.8 million eligibility reviews that have occurred during the recession, 4.6 million took more than three weeks. That is 2.1 million more than federal rules allow.
Appeals take even longer, with 28 states violating timeliness rules, many of them severely.
Perhaps no state is as troubled as California, which has not met timeliness standards for nine years. As in most other states, its 30-year-old computer runs on Cobol, a language so obsolete the state must summon retirees to make changes.
Yet a major overhaul in California has been delayed for five years, with $66 million in federal funds still waiting to be spent. In part, the shelved project was meant to upgrade the call centers, which were “completely swamped” last winter, a legislative analyst wrote, with “desperate unemployed Californians dialing and redialing for hours.”
Deborah Bronow, who runs the state’s unemployment insurance program, said, “The systems were antiquated to begin with,” and “we were unprepared.”
In April, Gov. Arnold Schwarzenegger declared a state of emergency, saying the failure to efficiently process checks posed “extreme peril to the safety of persons and property.”
California has not met federal standards for adequate reserves since 1990. Still, it cut taxes and raised benefits in the last decade. It is now paying benefits with federal loans, with its debt projected to reach nearly $18 billion next year.
Among those hurt by delays was Mr. Coronel, the San Francisco janitor who lost his hotel job in January. With the phone lines jammed, it took him two days to file an application and a month to learn it had been denied.
Then the waiting really began, as Mr. Coronel filed an appeal and heard nothing for three months. Luckless as he applied for new jobs, he borrowed to pay the rent, then moved in with his mother, and joined his pregnant wife in skipping meals.
“The worst day was when my daughter was born,” he said. “I had no clothes for her, and no car seat.”
While federal rules require states to decide 60 percent of appeals cases within a month, in recent years, California has met that deadline for just 5 percent. A report by the state auditor last year found the appeals board rife with nepotism and mismanagement.
Mr. Coronel won the appeal, but is soothing a marriage strained by a six-month wait. “It’s extremely stressful when you don’t know how you’re going to support your family,” he said.
Nationally, the program is the worst financial shape since the early 1980s, when back-to-back recessions left more than half the states borrowing from the federal government. Tax increases and benefit restraints gradually rebuilt the funds, then states changed course and pushed taxes well below historical levels.
From 1960 to 1990, the tax rate averaged about 1.1 percent of overall payroll. Over the last decade, it fell to 0.65 percent. That represents a tax cut of 40 percent.
Measured against a decade’s payroll, that saved employers $165 billion. But by 2007, when the recession began, the average state had just six months of recession-level benefits in reserve, half the recommended sum.
“The attitude became, ‘We don’t need a firehouse — we can buy hoses when the fire starts,’ ” said Wayne Vroman of the Urban Institute, a Washington research group.
Some analysts defend the tax cuts, saying they helped both employers and workers, by spurring the economy and creating jobs.
“Lower tax rates make it easier to attract business,” said Doug Holmes, president of UWC, a group that advocates on behalf of employers. “We don’t want to spend a whole lot of time beating ourselves up because we didn’t raise taxes enough. Nobody anticipated a recession this size.”
A big reason the reserves fell, Mr. Holmes said, is that the jobless now spend more time on the rolls — 15 weeks in recent years, up from 13 weeks several decades ago. Each extra week costs the program about $3 billion a year. The solution, he said, is stronger job placement provisions.
But others see an irresponsible past that now promises future pain.
“Workers who had nothing to do with the funds becoming insolvent are going to be asked to pay for that with benefit cuts,” said Andrew Stettner, an analyst at the National Employment Law Project, a workers’ rights group. “That’s the worst thing states can do — it takes money straight out of the economy.”
Among those who say timely benefits are essential is Mr. Kottwitz, the Arizona cabinet maker, who lost his job just before Christmas. He filed a claim and promptly received a debit card, with no money on it. It took him weeks to reach a program clerk, who told him to keep waiting.
“They said, ‘We’re behind — be patient,’ ” he said.
With little savings, no family nearby, and a ninth-grade education, Mr. Kottwitz, 42, had limited options. He got $100 a month in food stamps, collected cans and applied for jobs. When his landlord put him out, he moved to a shelter so overcrowded he spent his first few nights on the ground.
“I felt like I was the scum of the earth,” Mr. Kottwitz said.
In March, the shelter referred him to Ellen Katz, a lawyer at the William E. Morris Institute for Justice, an advocacy group, who secured his benefits. By the time the money arrived, Mr. Kottwitz had lost nearly 40 pounds. His first stop was an all-you-can-eat buffet.
Now back in an apartment, he said he was sharing his story in the hope that someone might read it and offer him a job.
“You think that someone would have seen this coming and been more prepared,” he said.
Unemployment hits 9.5% in June
July 2, 2009
Written By Arthur Delaney reported on Huffingtonpost.com
The U.S. economy lost 467,000 jobs in June as the national unemployment rate rose to 9.5 percent, the government announced on Thursday morning. While that’s only one-tenth of a percentage point from May, the current rate is the highest rate in 26 years.
Heidi Shierholz, an economist with the Economic Policy Institute, said that the loss of 6.5 million jobs since the start of the recession combined with the growth of the workforce means that the gains of the previous business cycle have been completely blown away.
“This is the only recession since the Great Depression to wipe out all jobs growth from the previous business cycle, a devastating benchmark for the workers of this country and a testament to both the enormity of the current crisis and to the extreme weakness of jobs growth from 2000-2007,” said Shierholz in a statement.
The ranks of the long-term unemployed — people out of work for 27 weeks or more — grew by 433,000 in June to a total of 4.4 million. Three in 10 of the unemployed are now long-term unemployed. The collapse of the housing industry contributes to their plight.
“We know right now because of the housing crisis that people can’t move to find another job,” Shierholz said. “People that in previous recessions may have been able to relocate to find another job can’t now.”
The Huffington Post has been profiling people who’ve been out of work for long periods of time. Marvin Bohn of Ohio hasn’t worked for a year and has been paying for his meds out-of-pocket. Steve Dittmann of Kansas said of the unemployed life, “I feel like I’m on the other side of a Plexiglass wall looking in.”
A broader measure of labor underutilization that accounts for people who’ve stopped looking for work hit 16.5% in June, a 0.1 percentage point increase.
“In June, there were large decreases in manufacturing, construction, and professional and business services,” said Bureau of Labor Statistics Commissioner Keith Hall in a statement. “Together, these three sectors have accounted for nearly three-quarters of the jobs lost since the recession began.
Many economists have predicted that even when the recession is technically over with the economy beginning to expand, there will be a “jobless recovery” as unemployment hovers in the double-digits.
Come to think of it
June 16, 2009
Has the recent turndown in the economy had an effect on your business?
What steps have you taken to tighten the belt?
Did you reduce the workforce?
Did you reduce or drop employee benefits?
In difficult times you may find you have to think outside the box. Reducing the workforce and employee benefits are obvious choices.
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Unemployment Rate Highest Since 1983
June 5, 2009
Written by Arthur Delaney HuffingtonPost
On Friday, the Labor Department announced terrible, terrible news: more than a quarter million people lost their jobs in May. But in a sign of how bad things are, commentators from all quarters are heralding the news as good.
The U.S. unemployment rate hit 9.4 percent in May as employers shed 345,000 jobs — the highest since the recession of 1983, the Labor Department announced. The “silver living” is that the losses announced today are about half the monthly average for the past six months.
Friday’s unemployment numbers came as a surprise. Private payroll firm ADP estimated that U.S. companies lost 532,000 jobs in its National Employment Report on Wednesday. Economists had made similar predictions.
“Job losses continued to be widespread in May, but the rate of decline moderated in construction and several service-providing industries,” said Keith Hall, commissioner of the Bureau of Labor Statistics, in a statement.
“The loss of 345,000 jobs in May — 0.3% of employment — makes this jobs report the second worst in a quarter century not including the current recession, but in today’s economy a loss of only 345,000 jobs is welcome news,” said Heidi Shierholz, an economist with the Economic Policy Institute.
Of course, in a Wednesday conference call to help reporters throw cold water on overly cheery reactions to bad numbers, Shierholz stressed that regular folks wouldn’t be seeing any economic benefit for a long time.
“After the 1990 recession unemployment rose for another 15 months, and after the 2001 recession, unemployment rose for another 19 months,” Shierholz said. “If last two recessions any indication, unemployment will rise for at least another year.”
A lot of people are unemployed now.
“The number of unemployed rose by 787,000 to 14.5 million,” said Commissioner Hall. “Since the recession began, the jobless rate has increased by 4.5 percentage points, and the number of unemployed persons has grown by 7.0 million.”
The number of long-term unemployed is also discouraging: “Among the unemployed, the number who have been out of work 27 weeks or more increased by 268,000 in May to 3.9 million. These long-term unemployed represented 2.5 percent of the laborforce, the highest proportion since 1983.”
