Labor & Employment Law

131,000 Jobs Lost in July

By Tula Connell

Another 131,000 jobs were lost in July, and the U.S. unemployment rate remained at 9.5 percent, as in June. The new data out this morning from the Department of Labor reflects a lack of private-sector hiring and large numbers of jobless workers returning to the market. Private-sector hiring increased by 71,000 but was offset by the143,000 decrease in temporary federal Census employees who completed their work. The unemployment rate was unchanged only because another 181,000 workers left the labor force.

The number of people who are underemployed, which includes those who are too discouraged to look for work or are working part time out of economic necessity, is 16.5 percent. Some 26 million U.S. workers are without jobs or full-time work

Manufacturing employment increased by 36,000, health care by 27,000 jobs and mining by 7,000. Construction employment decreased by 11,000, with 10,000 out due to strikes. People of color continue to suffer disproportionately, with 15.6 percent of black workers unemployed and 12.1 percent of Latino workers jobless.

AFL-CIO President Richard Trumka said today the economic recovery “is still far too weak to power the job growth we need to offset the almost 8 million jobs lost since the recession began.”

Meanwhile, 14.6 million workers are formally unemployed, and nearly half of them have been unemployed for more than 26 weeks. Yet every effort to dig us out of our 10.5 million jobs hole has faced enormous opposition from Republicans who choose to vote against good jobs and working people for cheap political points. This is inexcusable.

Economists say if monthly private-sector employment gains are 50,000 or fewer, it’s an alarming sign of a weakening economy. Unless employment growth is considerably faster now than in the recoveries from the two most recent recessions in 1990 and 2001, economists project that the nation may not reach pre-recession levels of unemployment until August 2015. As the Economic Policy Institute (EPI) puts it:

The much slower rate of growth seen in recent months suggests that without additional policy action, unemployment will remain high for years to come.

In fact, without the federal American Recovery and Reinvestment Act and other public policy responses, the nation’s unemployment would be nearly 16 percent today, with 8.5 million fewer jobs, according to EPI.

In an economy still suffering from high unemployment and sluggish growth, it can be easy to lose sight of the enormous progress that has been made since late 2008 and early 2009 when the country was losing close to 750,000 jobs per month.

Lawmakers on Capitol Hill took another good step yesterday when the Senate passed a bill to help states maintain hundreds of thousands of jobs?fire fighters, teachers, police and others?and the House is returning from recess next week to move the bill. (E-mail your representatives now?urge them to vote for the state jobs funding.)

One of the most troubling parts of the nation’s jobs crisis is long-term unemployment. Of the 15 million workers now unemployed, nearly half have been unemployed for more than six months. In July, the Senate overcame a Republican filibuster to extend unemployment insurance (UI) through November for the nearly 7 million workers who have been jobless for six months or more?and they will need to extend it again, because there are five workers for every one job.

The ramifications of this massive joblessness are widespread: Unemployment is now a leading cause of housing foreclosures and personal bankruptcy. Four million homeowners are in foreclosure proceedings or delinquent on their loans and this year, there likely will be even more than the 1.4 million personal bankruptcies suffered in 2009. In May, a record 40.8 million Americans received food stamps, the 18th straight record-setting month and 19 percent higher from a year earlier.

Yet some reactionary anti-worker lawmakers are resisting calls to shore up the nation’s jobs crisis, and instead are raising a red flag about the nation’s budget deficit. Yet as EPI Research and Policy Director John Irons writes, aggressive deficit reduction could short-circuit the progress the economy has made to date. Irons said major deficit reduction should wait until the unemployment rate has been at or below 6 percent for six straight months. In fact, reducing federal funding too soon could imperil an economy that still has seven million fewer jobs than it did at the start of the recession.

As AFL-CIO President Richard Trumka told the federal budget deficit commission in June, the solution is not to further squeeze the hide of U.S. workers.

There is no good economic policy reason that requires fiscal contraction at this time?neither concerns about inflation (which is practically non-existent), nor about long-term interest rates (which are extremely low by historical standards), nor about the crowding out of private investment (because so much labor and capital is unemployed), nor about the long-term debt (on which short-term stimulus has a small impact).

In other words, we can do something about the jobs crisis if we choose to. But we do have to choose?between providing more stimulus, on the one hand; or causing more joblessness, more wage cuts, more poverty, more inequality, more foreclosures, more waste of human potential, and more suffering, on the other.

Full post as published by AFL-CIO NOW BLOG on August 06, 2010 (boomark / email).