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Another Job-loss Recovery?

Production and Profits are Growing As 85,000 More Jobs Are Lost in December

Análisis by Adam Price |
January 8, 2010
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San José, CA - On Friday, Jan. 8, the Labor Department reported that 85,000 more jobs were lost in December of 2009. This was much worse than mainstream economists predicted and shows that another ‘job-loss’ recovery may be underway. Following the last official recession in 2001, the economy began to grow in November of 2001 but workers continued to lose jobs until the summer of 2003.

Government reports show that production of goods and services began to grow again during the summer of 2009, which may signal the official end to the recession. But with almost 7.5 million jobs lost since the beginning of the recession two years ago, workers cannot stand for another year or two of job losses while corporate profits and the stock markets boom.

The official December unemployment rate was the same as November, at 10%. But this was only because more than 600,000 people dropped out of the labor force by stopping to look for work. Over the last year, the labor force (people who are working and the unemployed who are looking for work) shrank by more than 1.5 million people. If the labor force stayed the same size (and it normally would be growing due to young people finishing school and immigration), the official unemployment rate would be 11%.

Despite the steady overall unemployment rate, the official unemployment rate for African Americans rose by six-tenths of one percent to a new high of 16.2%. This is the highest official unemployment rate for Blacks in 26 years.

A growing number of those who are working are either part-time or temporary workers. Including the part-timers and those who said that they stopped looking for work, the rate of unemployment and underemployment was 17.3% in December, or more than one out of six workers. There was also a large increase in the number of temporary workers - almost 47,000 in December. Combined with the overall loss of 85,000 jobs, this meant that businesses shed more than 130,000 permanent jobs last month.

In another sign that there is no recovery for working people, it is taking longer and longer for jobless workers to find employment. The average length of unemployment rose again, reaching 29 weeks in December 2009 as compared to less than 20 weeks a year ago. About 10 million unemployed were collecting unemployment insurance benefits in December, up from about 6 million a year earlier. More and more jobless workers are losing their state unemployment benefits, which generally only last for six months. The number of unemployed collecting federal emergency benefits has almost tripled over the last year, to 4.5 million.

But these federal emergency programs are set to expire at the end of February. Without a further extension, a million jobless workers a month will start to lose their unemployment benefits, adding even more pain to working households. Extending unemployment benefits would be a start for Congress, but what is really needed is a federal jobs program. The federal government also needs to provide more aid to state and local governments, whose budget problems are forcing tax increases, service cuts and layoffs that working people cannot afford right now.