Two hundred forty thousand more workers were tossed onto the jobless pile in October, driving the nation’s official unemployment rate to 6.5 percent – the worst in 14 years, according to the Bureau of Labor Statistics. More than 1 million U.S. workers have now lost their jobs this year and more than 10 million are out of work and looking for new jobs.
The areas that were hit the hardest were the manufacturing and financial sectors. The Institute for Supply Management had already reported last week a sharp decline in manufacturing activity, which in October fell to its lowest in 26 years. The jobs report is just one more indication, labor leaders say, that Congress needs to pass a stimulus package even before the new president takes office.
“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,” said AFL-CIO President John Sweeney in a statement released immediately after the jobs report was issued. “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 roads, bridges and schools and put people to work.”
The official figures, of course, don’t show the full picture. The unemployment rate, labor analysts say, would be well over 12 percent if it counted discouraged and underemployed workers, who are not technically considered “unemployed” by the BLS.
The BLS reported Nov. 6 that the number of people 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 45 percent, while continuing claims are up 46 percent.
Larry Mishel, president of the Economic Policy Institute said, “We haven’t seen the worst of it yet. We are looking at several years of high unemployment and widespread income losses that will take many more years to overcome.
CNN reported that it was told by a spokesman for ADP, the payroll management outfit, that 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.
All of this bad news followed the Commerce Department’s announcement that U.S. gross domestic product declined more in the third quarter than at any time since 2001. That decline resulted from a drop in consumer spending which most analysts say was the only thing fueling the economy.
Mishel said, “The last business cycle from 2000 to 2007 failed to generate any growth for working families – on average, they lost over $2,000 per year in inflation-adjusted income. This erosion of earning power happened even as the economy, through its workers, became increasingly productive.”
The erosion of workers’ earning power – more than 1 million are expected to file for bankruptcy this year – and the skyrocketing foreclosure rate, in which 2 million are expected to lose their homes, make the jobs situation that much more serious, labor analysts say.
Those analysts note that President-elect Obama, thanks to the Bush administration, has inherited the most difficult set of domestic and foreign policy disasters likely ever to have converged simultaneously in the history of this nation. On the domestic front, those analysts say, the first step is to stop the economic bleeding. This is why the AFL-CIO is calling for a “rescue package” that gets people back to work in jobs that will support families and provides a moratorium for home foreclosures, among other measures. These are steps Obama called for during his campaign.
Beyond the immediate measures, labor plans to back the Obama administration in longer term efforts aimed at correcting imbalances under which corporate profits soared while wages stagnated and declined.