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Half a million jobs lost in June

by Adam Price |
July 17, 2009
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San José, CA - On July 2, the Labor Department announced that another 467,000 jobs were lost in June as the official unemployment rate rose to 9.5%. This brings the total job loss during the recession to more than 7 million. This means that all the jobs gained under the Bush administration have now been wiped away by the recession. This is the first time since the Great Depression of the 1930s that all the job gains of an economic expansion have been lost.

The job losses pushed the unemployment rate for adult men to 10%, reaching double digits for the first time since the early 1980s. The rise in unemployment reflects the continuing job losses in construction and manufacturing, which together lost another 215,000 jobs in June. Job losses were widespread, with every major industry, except health care and educational services, losing jobs. For the first time during this recession, the government sector, which had been holding on to small gains in employment, saw a loss of more than 50,000 jobs in June.

In addition to the loss of jobs, which was worse than expected, and which shriveled many of the ‘green shoots’ of the supposed economic recovery, the labor market got much worse in many other ways. The average length of unemployment rose to 24.5 weeks, almost half a year, the longest since the Great Depression. The average number of hours of work fell again to only 33 hours, while a broader measure of unemployment that includes part-time workers who can’t find full-time work, rose to 16.5%

The rising unemployment is driving a new wave of home foreclosures, this time among home buyers who have the standard ‘prime’ mortgages - not subprime, no documentation, or the payment option-adjustable rate mortgages. Jobless workers also aren’t paying taxes, and states and local governments across the country are raising taxes and cutting spending to close their budget deficits.

Working people also suffered from rising prices in June. Each month this year wages have not kept up with prices, which jumped nine-tenths of one percent (0.9%) in June, or a whopping 11.3% annual rate. This was mainly due to rising gasoline costs, but the core rate, without food and energy prices, also increased at a faster rate. The combination of higher prices and less work cut the purchasing power of a typical worker by 1.2% in June (a 15.4% annual rate).

While the number of new claims for unemployment insurance benefits has dropped, the total number of people receiving benefits reached another record high at the end of June, with almost 6.9 million people collecting unemployment benefits. In addition there are more than 2.5 million more people collecting federal extended unemployment benefits.

With businesses still cutting almost a half a million jobs per month, and a growing number of jobless workers are facing the loss of benefits as their time runs out, there is a need for a second federal stimulus package, but this time amied at working people and which includes a government jobs program.