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Jobless crisis deeply affects most workers
More than 1.7 million lose benefits
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A socialist newsweekly published in the interests of working people
Vol. 74/No. 27      July 19, 2010


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(lead article)
Jobless crisis deeply
affects most workers
More than 1.7 million lose benefits
Scott Olson/Getty Images
Chicago job fair June 23. Jobless figures don’t convey scope of employment crisis.

“Of the 13 recessions that the American public has endured since the Great Depression of 1929-33, none has presented a more punishing combination of length, breadth and depth than this one,” says a June 30 report from the Pew Research Center.

The survey, entitled “How the Great Recession Has Changed Life in America,” says the current economic crisis has directly affected more than half of all working adults through layoffs, cuts in take-home pay, reduction in work hours, or being forced to take just part-time jobs.

Unemployment data doesn’t “fully convey the scope of the employment crisis that has unfolded during the recession,” the report states.

Some 40 percent of those interviewed said they tapped into savings or retirement accounts to make ends meet; more than six out of 10 cut their spending and borrowing. One in 10 adults, including 24 percent of workers from 18 to 29 years old, moved back in with their parents because of the economy. Thirty-five percent of adults 62 years and older have postponed retirement.

Nonfarm payrolls fell by 125,000 in June, the first month of losses this year, in large part due to the government ending employment for 225,000 census workers. The 83,000 private sector jobs the government says were created falls far short of what is needed to keep up with new workers joining the ranks of labor, never mind the millions of unemployed. Manufacturing added only 9,000 jobs nationwide, compared to an average 25,000 in the previous five months.

Statistics cover up true joblessness
A July 2 Labor Department report announced that official unemployment fell to 9.5 percent in June, down from 9.7 percent in May. The lower unemployment rate is not due to jobs being created by a rebounding economy. To the contrary the federal government was able to report lower overall unemployment for the month by eliminating from their statistics 652,000 workers who were too discouraged to keep looking for work. An additional 2 million workers are already in this category. Another 8.6 million workers are employed only part-time because of a lack of full-time work. When all are factored in, the rate for workers seeking full-time jobs is 16.5 percent.

The newly released unemployment figures also show an increasing number of long-term unemployed workers. There are currently 6.8 million workers who have been unemployed for 27 weeks or more and they are now 45.5 percent of all those without jobs. At 4.4 percent of the total civilian workforce, this is the highest level recorded since the government began keeping statistics.

The average length of time the typical unemployed person has been looking for work is 35.2 weeks, a record high.

Blacks and Latinos are disproportionately affected with official unemployment rates of 15.4 percent and 12.4 percent respectively. More than 25 percent of all teenagers are without a job.

Other recent signs in the economy point to a further decline in employment opportunities and mounting pressures on workers. In May orders for manufactured goods were the lowest in over a year. House and apartment sales dropped precipitously, and retail sales fell for the first time since the fall.
Local government cuts and layoffs
Local governments across the country eliminated more than 20,000 jobs in the past month.

Los Angeles officials began layoffs July 1 of 360 city workers. In New York City, the newly passed city budget made $1 billion in cuts, including eliminating 5,300 jobs. The budget also closes 30 senior centers, shuts down a 24-hour homeless drop-in center, and eliminates nurses from 145 schools with less than 300 students.

By the end of the first week of July, 1.7 million unemployed workers will no longer receive benefits because they have been without a job for too long. Without a federal extension of unemployment benefits, this figure will top 3 million by the end of this month. Unemployment payments average about $300 per week.

Ignoring signs that the U.S. economy could be heading into another downturn, President Barack Obama called the new unemployment statistics a “stark turnaround” and said, “Make no mistake, we are headed in the right direction.”

“We are now, I fear, in the early stages of a third depression,” wrote New York Times columnist Paul Krugman June 27.

“Unemployment—especially long-term unemployment—remains at levels that would have been considered catastrophic not long ago,” he wrote, “and shows no sign of coming down rapidly.”

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