Source: Jared Bernstein with research assistance from James Lin, Economic Policy Institute, Jobs Picture, March 7, 2008
In what is the most recessionary jobs report since the last official downturn in 2001, payrolls fell 63,000 last month and were down 101,000 in the private sector, according to today’s report from the Bureau of Labor Statistics. Unemployment actually ticked down slightly, from 4.9% to 4.8%, but this was wholly due to labor force withdrawal. Employment in the more volatile survey of households–the one from which the unemployment rate is drawn–fell over 250,000.
Americans Worried About Their Standard of Living
Source: Dennis Jacobe, Gallup, February 22, 2008
Source: Dr. Charles W. McMillion, MBG Information Services, February 2008
According to the US Department of Labor, Ohio had -209,400 fewer nonfarm jobs in December
2007 than it had in December 2000. This loss of -3.7% of Ohio’s jobs is the worst seven-year loss in state records that begin in 1939 as the Great Depression was ending. The previous seven-year job loss record was the period ending in 2006 (-3.6% of jobs lost) and before that the record was held for the period ending in 1962 when -3.4% of jobs were lost in the demobilization after the Korean War.
Nine of the state’s thirteen metropolitan areas suffered recent job losses more severe even than Ohio’s statewide losses. Most devastated is the Springfield area, losing -10.0% of its jobs over the last seven years. The other areas with job losses worse than statewide include Canton -8.6% job loss, Dayton -7.6%, Mansfield -6.5%, Youngstown -6.3%, Lima -5.7%, Cleveland -5.5%, Toledo -5.0% and Steubenville-Weirton, OH/WV -3.8%.
Source: Maurice Emsellem and Omar Semidey, National Employment Law Project, February 12, 2008
Working families are bracing for major layoffs amid growing signs that the nation may be heading toward a serious recession. Despite their compelling concerns and strong evidence that federal jobless benefits will immediately stimulate the economy, the U.S. Senate recently came one vote short of the 60 votes needed to pass an economic stimulus package (Economic Stimulus Act of 2008) that included a 13-week federal extension of unemployment benefits. That leaves an estimated three million workers without any additional federal support when they run out of their 26 weeks of state jobless benefits this year.
Now, the attention shifts to Congressional efforts to promptly enact separate legislation to extend federal jobless benefits to help boost the economy. This paper makes the case for an immediate extension of jobless benefits and federal reforms to modernize the unemployment insurance program. It provides new state estimates of the number of workers who will exhaust their state unemployment benefits this year as well as a rebuttal to the argument of Bush Administration officials that unemployment has not reached high enough levels compared to prior recessions to justify an extension of jobless benefits. Underscoring the harshness of the downturn on long-established workers and the consequences of inaction by Congress for moderate-income families, the paper also finds that the unemployed include a disproportionately large number of older workers who are looking for work for longer periods of time in today’s struggling economy.
Source: U.S House of Representatives, Joint Economic Committee (Republicans), January 2008
This paper investigates the value of employment data as real-time recession indicators. Among popular monthly labor measures, the unemployment rate is the most useful as an indicator of recession, whereas two top measures of employment growth -payroll jobs and civilian employment -have little value. Two other series, the labor force participation rate and the employment-population ratio, also provide little or no value in anticipating a recession. The best pre-recession employment indicator is actually weekly claims for unemployment insurance (UI). The paper reviews a new technique for predicting recessions, and develops an employment recession probability index. The index indicates a 35.5 percent chance that the U.S. economy is in recession, sharply up from 10 percent last month.
Source: Algernon Austin, Economic Policy Institute, EPI Issue Brief #241, January 18, 2008
Recessions hurt. And they hurt the poor and socially marginalized populations the most. As we face the prospect of the second recession of the decade and consider the merits of various stimulus packages, it is useful to examine what a recession would mean for black America.
The late 1990s produced a full employment economy and significant absolute and relative economic gains for blacks. This Issue Brief contrasts the benefits of a national full-employment economy with the harm caused by the 2001 recession and the weak job growth that followed.
Source: Jeffrey R. Kling, Testimony before the Subcommittee on Income Security and Family Support of the House Committee on Ways and Means, September 19, 2007
… Maintaining living standards immediately after job loss, the original focus of UI, is no longer the major difficulty associated with unemployment. In the twenty-first century economy, the situation has changed in at least three key ways. First, job loss is now more likely to be permanent, and associated with drops in long-term wages, not just short-term income loss. Second, unemployment duration has increased. Third, people have greater ability to borrow to tide over short periods of unemployment. These three facts – more permanent job loss with large wage losses, longer unemployment durations, and greater ability to borrow – suggest a shift in resources towards larger, longer-term consequences of unemployment should be the top priority of efforts to modernize the UI system.
Source: Cynthia M. Fagnoni, Managing Director Education, Workforce, and Income Security Issues, United States Government Accountability Office, Testimony Before the Subcommittee on Income Security and Family Support, Committee on Ways and Means, House of Representatives, GAO-07-1243T, Wednesday, September 19, 2007
The overall rate of UI receipt has increased modestly from the mid-1980s to 2005, but still remains below the near-50 percent rate of the 1950s.
A comparison of UI receipt by earning levels shows that low-wage workers were less likely to receive UI benefits than higher-wage workers. Moreover, the gap between the two groups has not narrowed over time. Between 1992 and 1995–the period covered in GAO’s previous analysis–low-wage workers were about half as likely to receive UI benefits as higher-wage workers. For the years 1998 and 2003–the years added for this analysis–they were about one-third as likely.
Subcommittee on Income Security and Family Support, Hearing on Modernizing Unemployment Insurance to Reduce Barriers for Jobless Workers, Wednesday, September 19, 2007
Source: Chad Stone, Robert Greenstein, Martha Coven, National Center on Budget and Policy Priorities, August 7, 2007
Unemployment Insurance (UI) is a joint federal-state program designed to provide temporary income support to workers who have a demonstrated attachment to the labor force and lose their jobs due to a lay-off or for other economic reasons, or who must leave their jobs through no fault of their own. (See the box on page 2 for an overview of the UI system.) Unfortunately, the UI system is not performing as well as it should in meeting this goal. Many workers who lose their jobs — especially low-income and part-time workers — end up not receiving any unemployment benefits; many others exhaust their benefits before finding a new job.
The need to modernize UI has been evident for some time, and many states have made progress reforming their UI laws over the past decade or so. It is time for the federal government to lend its support and encouragement to these efforts, and such reform may be on the Congressional agenda this year.