Wednesday December 1, 2021
| Last update: Tuesday at 11:43 PM
No Recovery in the Labor Market

Job Losses Up in September

By Adam Price |
October 8, 2009
Read more articles in

On Oct. 3, the Department of Labor reported that 263,000 jobs were lost in September, an increase of 50,000 over the jobs lost in August. So far more than 7 million jobs have been lost since the recession began in December of 2007. The official unemployment rate rose to 9.8% in September, from 9.7% in August, double the 4.9% unemployment rate when the recession began. This is the highest level of unemployment since 1983. These facts show that despite the talk of a ‘recovery’ in the corporate media, there is not recovery for working people.

The official unemployment rate understates the amount of pain workers are feeling. Over a half million people gave up looking for work in September. If they were counted as unemployed, the unemployment rate would have topped 10%. A broader measure of unemployment, including part-time workers who can’t find full time work and unemployed workers who have stopped looking for work rose to 17% in September. Employers cut workers' hours more in September through furloughs and hour cuts; the average workweek fell to only 33 hours.

Figures from the Census Bureau released in late September showed that working class and poor families have been hit the hardest by the recession, resulting in a record gap between high and low-income Americans. The median, or typical household income, is now back to 1997 levels. Private sector employment is also fallen back to 1999 levels and only government jobs have grown over the last 10 years. But now local governments and public schools and colleges have shed more than 50,000 jobs in September, more than double the rate of August, as budget cuts lead to more public-sector layoffs.

There are now six unemployed workers looking for a job for every job opening, another record high. It is no wonder that 5.5 million people had been out of work for six months or longer in September, a half million more than in August. 100,000 jobless workers were dropped from unemployment insurance benefits in September, and another million could lose their benefits by the end of the year. Further, the federal extended unemployment benefits program is set to expire Dec. 31, so that workers laid off next year would only be eligible for the six months of unemployment benefits that states provide.

After the last recession in 2001, a so-called 'jobless recovery' followed, as employers cut hours and outsourced work to lower-wage countries. Employers added only 100,000 jobs per month on average, and the unemployment rate fell by only six-tenths of one percent from the beginning to the end of the expansion (2001-2007). If the coming recovery has the same pattern of slow job growth, it would take 42 years to get back to the 5% unemployment at the beginning of the recession (and that assumes no recession during the entire time)! Even if the economy were to follow the more robust recovery of the 1990s, which added jobs at twice the pace and cut three percentage points off the unemployment rate over nine years, it would take fourteen years to get the unemployment rate down 5% (again without a recession along the way). But both the 1990s and 2000s economic expansion were pumped up by big increases in consumer, business and financial sector debt, and this source of stimulus is not going to be available going forward.

The rising unemployment rate, growing number of long-term unemployed and dismal prospects for the future mean more suffering. There will be more families losing their homes, more people losing their health insurance, less taxes paid and even more budget cuts of social programs and schools that serve working people. Unemployment benefits need to be extended and the extended benefits program renewed for another year at least.

But unemployment benefits don't make up lost income from not working. Even with federal aid, health insurance is unaffordable for many jobless workers. Long-term unemployment means lost job skills and growing demoralization. During the Great Depression of the 1930s the Works Progress Administration (WPA) created 8 million jobs and was the country’s largest employer until World War II. Highways, roads, public buildings and public utility infrastructure were built by the WPA (including a large part of my high school). What is really needed today is another massive federal jobs program that targets the unemployed and youth coming out of school.