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Disaster: 240,000 Jobs Lost in October
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In more stunningly bad news for America’s workers, 240,000 U.S. jobs were lost in October, pushing the nation’s unemployment rate to 6.5 percent—the worst in 14 years, according to Bureau of Labor Statistics (BLS) data released today. October’s job loss represents the 10th straight month job numbers declined, putting the Bush administration on track to complete an entire year in which the nation saw no job gains.
More than 1 million American workers have lost their jobs already this year, and more than 10 million are out of work and looking for new jobs.
The financial and manufacturing sectors were particularly hard hit. The Institute for Supply Management in recent days reported a steep decline in manufacturing activity, which in October fell to its lowest in 26 years. The jobs report is another indication that Congress needs to pass a stimulus rescue package even before the new president takes office. Says AFL-CIO President John Sweeney:
We need urgent action on an economic recovery package in the lame-duck Congress that dedicates enough money to matter to help working people get back on track. The recovery package must include an extension of unemployment benefits and increased funding for food stamps while providing aid to local and state governments to maintain vital services. It should also include an immediate investment in infrastructure spending to rebuild our crumbling roads, bridges and schools and put people to work.
The official government jobless number shows only part of the picture. Analysts estimate that the unemployment rate would be over 11.8 percent if it counted discouraged and underemployed workers, who are not technically considered unemployed under the definition used by BLS.
Yesterday, the BLS reported the number of U.S. residents collecting state unemployment benefits reached the highest level in 25 years, rising by 122,000 to a seasonally adjusted 3.84 million in the week ending Oct. 25. Compared with the same week a year ago, new jobless claims are up about 45 percent, while continuing claims are up 46 percent.
Economist Larry Mishel, president of the Economic Policy Institute (EPI), says we haven’t seen the worst of it yet.
We are looking at several years of high unemployment (peaking at 8 percent or more) and widespread income losses that will take many more years to overcome.
A spokesman for payroll manager ADP, Joel Prakken, told CNN
he didn’t anticipate a turnaround for these numbers until the second half of next year, and added that it was “highly likely” that unemployment numbers will be in excess of 200,000 job losses per month for the next several months.
The jobs report followed the Commerce Department’s announcement that U.S. gross domestic product (GDP) declined by 0.3 percent in the third quarter, the worst such drop since 2001. The GDP’s decline was fueled by falling consumption spending, which had up to now provided the only gasoline in the nation’s economic engine.
In fact, as Mishel points out:
The last business cycle from 2000 to 2007 failed to generate any growth for middle-class working families—on average, they lost over $2,000 a year in inflation-adjusted income. This erosion of earning power happened even as the economy, through its workers, became increasingly productive.
An erosion of workers’ earning power—some 1 million people are expected to file for bankruptcy this year—and the massive home foreclosure rate, in which 2 million people are expected to lose their homes, make the jobs picture even more dire.
President-elect Barack Obama has inherited the biggest set of domestic and foreign policy disasters likely ever to have converged simultaneously in the history of this nation, gratis the Bush administration. On the domestic side, progressive analysts agree the first step must be to staunch the blood letting. The AFL-CIO has called for an economic rescue package that gets people back to work in jobs that support their families, provides a moratorium for home foreclosures and other measures.
Beyond immediate measures, the new Obama administration must reshape the nation’s economy to address decades in which corporate profits soared and workers’ wages stagnated, health care access declined and retirement security dwindled. Throughout the past year, EPI has compiled an Agenda for Shared Prosperity as a guide for lawmakers and the new president to help get the nation back on track. The reports were prepared by a network of analysts on issues such as jobs, health care and the freedom to form unions. Another set of policy recommendations to check out is at New Progressive Voices, a project of EPI, the Campaign for America’s Future, the Roosevelt Institution and other progressive policy organizations.
It’s time to get to work.
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6 Comments
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Actually, our job “loss” for the year is over 2 million, since it takes an net INCREASE of 100,000 jobs each month just to keep up with new workers entering the workforce. This “double deficit” is what is driving up the unemployment rate so dramatically.
Read this all you readers and participants of ths blog who thought John McSame was the best choice for President. Thanks to the Bush tax cuts to the wealthy (that McSame wanted to extend) that supposed to “create jobs”, and “boosts the economy”, look at this mess President Obama has to clean up.
In addition to all of those laid off or out of work, many of todays union contracts don’t help either because they haven’t been changed to reflect the times. In many cases starting wages are actually less than there non union counterparts starting at say $8 to $9 an hour. Of course eventually, those jobs pay quite well but often times it’s a long hard road to get there.
How did this happen? Years ago when America was a better place to live in, you worked your 35 or 40 years, got your gold watch and retired with 100% of everything you had accrued. While you started at low wages, you were 19 years old, right out of high school and still lived with your mom and dad so the system worked. Today, millions of Americans are being permanently replaced, downsized and out sourced and its thrown the economy into a tail spin.
Instead of a 19 year old kid out looking for work, they’re 45, 50 and 55. The $9 starting wage rate isn’t working any more. You exit a job at Chrysler making $28 an hour and the replacement job while still union, starts at only $9 and takes 10 years to top out.
The companies know this and are loving it. You work at ABC Co. for 20 years and are at top scale. They file for bankruptcy protection, turn your pension over to the PBGC where you get 10 cents on the dollar and then turn out the lights and lock the door. Six months later they open as 123 wigget Co. and hire off the street at $8.00 an hour. Union or not, who cares, with the starting rate so low. In another 15 years or so they’ll repeat the process over again so what does it matter if they promise you the moon, they know they’ll never meet the obligations in their contracts any way.
My point is with so many Americans being displaced from their jobs through no fault of their own and where they should be in their earning years to pay for children’s college and save for their retirement, the starting rates for union jobs should be a lot higher than they currently are. Instead of raising the minimum wage at low wage hamburger stand jobs, they should increase starting union wages and make a whole lot more union jobs available and the economy will fix itself.
College grads are in a different boat. They start at $35K to $70K right out of the box. If their company folds and they go to another it’s like a lateral move where the pay is the same or they might even get a raise over their old job.
Middle class workers have been hit disproportionately harder than the rest of society. You work for a very long time to hit top scale and then if your job goes away for any reason you’re out of luck. We need to take a hard look at some of the loop holes in the rotten laws that don’t protect workers from unscrupulous employers.
Why do they do it? because they can! Its all legal.
As I live in NYC and survived the WTC on 9/11 I was forced to travel America looking for work to feed my family. As a member of the IBEW I found work, maintained my medical and continued with pension credits. Belonging to a strong, smart, pro-active Union worked well for me and that is why I support my Union. I believe the only way to support America is to rebuild America. We need green jobs, green services and green investing. No longer can we only be concerned with the “investor class”; this is how we got into this financial melt down. Jobs in America for Americans are what we need. Manufacturing green cars, solar panels, wind generators, insulating homes and businesses will provide employment, tax revenue and we can again lead the world in our imagination and innovation. We can again be the America I remember. Thank God Obama won strongly, we now have a mandate to do it right. I will do my part, will you do yours?
Johnny
Some of this can be laid at the feet of average citizens. In places of business, there are automated check out stations. Go to the one manned by a cashier. If you have a disabled sticker, have your gas tank filled by an attendent, That’s the law. If you can afford it, stay away from Do It Yourself projects. Big Business must use local help on credit card transactions. All except the Union cards use people in foreign countries. Place a high tarrif on imports, no more free trade agreements.
The absolute worst part of being laid off and having to collect unemployment insurance is that the benefits are so low. The maximum allowable compensation is $380.00 per week, or $9 an hour; after taxes, you get $315 a week. Try living on that if you are alone or have children, and you have a $1000 per month mortgage or rent payment. There is no way to survive that. People are maxing out their credit cards as they borrow more each month just to live on. I know several people that are. Then if you are lucky enough to get another job, your chances of having to take lower wages than you used to make are great, and you are stuck with 21st century debt with a 20th century cost of living index as per your wages. You may never get out from under anyway.