Unemployment: No good news

According to the Labor Department the economy lost another 101,000 jobs in December, most of them in manufacturing industries and retail trade. Although the official year-end unemployment rate of 6 percent was unchanged from November, it tied an eight-year high. Given the pluses – 14,000 new jobs in government service – and minuses –101,000 thousand pink slips – 82,000 workers joined the ranks of the unemployed in December.

The December numbers came as a jolt to analysts who had expected – or at least hoped for – a decline in the official count and offer further proof that the long-heralded “recovery” had not materialized.

Dean Baker, co-director of the Center for Economic and Policy Review, said the report shows an economy “sliding back into recession.” Pointing to the loss of nearly 2.5 million private-sector jobs since George Bush moved into the White House and the 219,000 decline since Nov. 1, Baker said there is no sector of private industry that is an “obvious candidate” to reverse this decline.

“In fact,” he continued, “with continued weakness in the retail, capital goods, telecommunications, and airline industries, there is a strong probability the decline will accelerate in coming months.”

Baker said the residential construction sector may weaken soon, because growing rental vacancy rates suggest the end of the housing bubble may be near. He added that “imminent declines” in state and local government, coming as a response to budget shortfalls, will further weaken the job market.

One of the reports most troubling statistics was the half-point increase – from 11 to 11.5 percent – in the unemployment rate for Black workers. Prior to November, the relative increase in unemployment had been less among African Americans than among white workers but that seems to have changed with the official unemployment rate for Blacks standing more than 4 percent above its low of 7.3 percent in 2000.

And those figures understate the case. If discouraged and marginally attached workers – those who toil part-time because it’s all they can get when they really want full-time work – are added to the official count of the unemployed, then 9.6 percent of the workforce was unemployed or underemployed last month.

Other troubling statistics in the report (there was no good news) show that the length of what the Labor Department calls a “spell” of unemployment is rising: 38 percent of those unemployed in December had been out of work for at least 15 weeks, with another 31.5 percent jobless between five and 14 weeks.

The long-term jobless – the 1,856,00 workers who have been looking for work for more than six months – are 22.8 percent of the unemployed, up two percentage points since November, the highest level since February 1993.

The Bureau of Labor Statistics released the December Report the day after President Bush signed legislation extending federal unemployment benefits for the nearly million workers who had been lopped off the rolls on Dec. 28 because of inaction by the House of Representatives last December. Although the benefits for these workers was reinstated, Congress refused to provide any relief for one million workers who have exhausted both state and federal unemployment benefits prior to Dec. 28.

AFL-CIO President John Sweeney responded angrily to the December figures and the refusal of Congress to act in behalf of these workers. “Voodoo economics and demagoguery about ‘class warfare’ may play well in the boardrooms of [President Bush’s] corporate campaign contributors, but they do nothing for America’s working families,” he said. “It is time for the President and the majority in Congress to get real about the problems facing the nation and the solutions that working families want.”

Democrats had proposed legislation that would have covered all long-term unemployed as well as relaxing eligibility standards that now deny benefits to nearly 60 percent of laid-off workers.

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