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17,000 Jobs Cut in January—First Such Drop in Four Years |
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The 17,000 people whose jobs were cut last month and the 375,000 people who filed initial claims for unemployment last week are another sign that the economy’s “fundamentals” are not as sound as President Bush asserts.
Today’s unemployment figures released by the U.S. Bureau of Labor Statistics show the first drop in employment in four years, an important sign that the labor market is still weakening. The weak report increases the likelihood that the economy is already in recession. And a whopping 69,000 more people last week filed for unemployment benefits than the week before, the largest jump during any week since Hurricane Katrina.
Worse, more people are out of jobs longer. The rate of long-term unemployment is 65 percent higher today then it was at the beginning of the last recession: 18.3 percent of jobless workers today have been unemployed for more than six months.
This underscores the need for any economic stimulus package to include an extension of unemployment benefits. The unemployment figure for January dipped very slightly to 4.9 percent. However, together with weak wage growth, a drop in average weekly hours worked, and job losses across many sectors, the relatively small drop in unemployment is little cause for comfort.
AFL-CIO President John Sweeney says:
The weakening job market is a kick in the stomach to working families already suffering a generation-long stagnation of wages and rising insecurity. With energy costs rising, health care expenses spiraling out of control and the housing crisis in full swing, Congress and the President must take swift action to provide relief to those who need it most.
The labor report shows job losses were widespread. Manufacturers, construction firms, government and a variety of professional and business services eliminated jobs in January.
Wages also grew at a slower pace last month. Average hourly earnings for jobholders rose to $17.75 in January, a 0.2 percent increase from the previous month. It was half the increase logged in December. In the past year, wages have increased 3.7 percent, not enough to keep up with inflation.
The U.S. Senate is looking at the possibility of extending unemployment. (You can click here to tell your senators to extend unemployment benefits in the economic stimulus package.)
The AFL-CIO has proposed several short- and long-term solutions to the nation’s economic problems, with long-term proposals, including effective regulation of our housing and financial markets. Other proposals include enacting fiscal and monetary policies to promote full employment, fixing flawed trade policies, investing in high-paying green-technology jobs, fixing our broken labor laws and ensuring affordable health care and retirement security.
Chris Owens, executive director of the National Employment Law Project, says:
Without effective, proven and quick stimulus in the form of extended unemployment benefits, the personal crisis confronting these jobless workers will become a national crisis, as the economy continues its downturn spiral.
Click here to read more about the AFL-CIO’s stimulus proposals.
Says Sweeney:
Fears of recession only aggravate the economic anxiety felt by millions of America’s working families. We must move quickly to lessen the impact of the current economic downturn and freeze interest rates on sub-prime mortgages to keep millions of families from losing their homes. But short-term action is not enough. We must also begin to reform the unbalanced economic policies behind the coming recession and that have created wage stagnation and economic insecurity.
Since President Bush took office, the length of time workers spend seeking new jobs has gotten longer and longer. In spring 2001, when the nation went into recession, the long-term joblessness rate (more than 27 weeks) was 11 percent. According to USA Today, more than 1 million workers will run out of unemployment insurance between now and June.
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And the dictator in chief says the economy is doing fine?