The "genius of the system"

A First Look at the Job Market in the New Year

The Good, the Bad and the Ugly

By Masao Suzuki |

February 10, 2010

Protesters block road to protest factory closure in Moline, IL. (Fight Back! News/Staff)

San Bruno, CA - On Feb. 5 the Department of Labor released their report on the January 2010 job market. The good news in the report was that the official unemployment rate fell from 10.0% in December to 9.7% in January. This is the biggest drop in the unemployment rate since the recession began in December 2007.

There was also a fair amount of bad news in the jobs report. Some 20,000 payroll jobs were lost in January, and the job loss in December was revised up to 150,000 jobs. There was an increase of 52,000 temporary jobs in January, which means that 72,000 permanent jobs were lost.

Despite the overall drop in the official unemployment rate, the unemployment rate for African Americans increased from 16.2% in December to 16.5% in January. This is twice the rate of white workers and is the highest unemployment rate for Blacks in the United States since 1984.

There were two parts of the jobs report that can be considered downright ugly. The first is that the total number of jobs lost in the recession was revised up by a million, to a total of more than 8.4 million jobs lost since the recession began in December 2007. Even if the economy recovers and jobs are added at the same rate as the 2001-2007 business expansion (which was aided by the housing boom), it would take more than seven years just to restore all the jobs lost in the recession.

The other ugly part of the jobs report was the continued rise in long-term unemployment. In January, more than 6.3 million people had been out of work for six months or more. This number has risen by 5 million since the recession began. With so many people out of work and so few job openings, it is taking an average of 30 weeks for jobless workers to find work or give up looking altogether.

One of the things even uglier than the job market is the lack of action by the U.S. Senate. Right now the extended federal unemployment insurance benefit program for the long-term unemployed will expire this month. If the Senate does not act to renew extended federal benefits, more than one million jobless workers will lose their benefits in March. This number will rise to five million by June.

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Long-term joblessness
reaches new high


BY BRIAN WILLIAMS
The duration of unemployment reached an all-time high in January—an average of nearly seven months—and the official unemployment rate for the month is 9.7 percent. The fact this rate is down 0.3 percent from December has amplified claims the economic recovery is under way.

The latest employment figures are “signs of the beginning of recovery,” stated Christina Romer, chair of the White House Council of Economic Advisers, the day the report was released.

The decline in January reflects a seasonal adjustment, while the number actually counted as unemployed rose by 1.4 million. Pronouncements of economic recovery are little encouragement for these workers, as well as those with jobs, many of whom are worried the ax is about to fall.

Some 3,500 employees at St. Vincent’s Hospital, a major medical facility in New York City, face an uncertain future as hospital owners are threatening to close it. Verizon is slashing 13,000 jobs and Home Depot is planning to lay off 1,000 workers.

The official unemployment rate for African Americans, which has been steadily rising over the past year, is now 16.5 percent, up from 12.8 percent a year ago. For Latinos, 12.6 percent are unemployed, and for teenagers, 26.4 percent.

With 14.8 million workers officially unemployed last month and an additional 2.5 million workers not counted because they are “marginally attached” to the workforce, few workers would read the government report as encouraging.

“It’s no wonder unemployed workers are getting discouraged,” stated CNNMoney. “It’s never taken longer to find a new job.” The number of long-term unemployed—those without jobs for 27 weeks or more—was 6.3 million in January, setting a new record for the 10th month in a row.

Payments could be halted next month for as many as 1.2 million workers receiving unemployment insurance checks unless Congress passes legislation extending benefit payments.

While the bosses hold off on hiring, those with jobs are being forced to work harder through increased speedup, inevitably causing more injuries. “During the past two quarters productivity expanded at an astounding pace of close to 8 percent annualized,” Moody’s chief economist Mark Zandi told Daily Finance. “This is the strongest two-quarter gain on record outside of a period in the early 1960s.”

For the fourth quarter of 2009, “productivity” rose at a 6.2 percent annual rate with output rising by 7.2 percent and work hours increasing an average of 1 percent. The productivity increase was even higher in manufacturing at 7.8 percent. During this time, real wages fell by nearly 2 percent, according to MarketWatch.com.

The Barack Obama administration is promising to offer a $5,000 tax credit to small businesses for each worker they hire. But the National Federation of Independent Business reported last month that more small employers nationwide are expecting to cut jobs rather than hire over the next three months.