Friday, November 21, 2008

Current Unemployment Statistics

The holidays are going to be dreary for many people. Unemployment goes up, up, and upl. The national unemployment rate for October is 6.5%.; the last time it was this high was March 1994. More dismal news was released on November 21, 2008, with the Monthly Regional and State Employment and Unemployment report by the Bureau of Labor Statistics. Thirty-eight states and the District of Columbia recorded over-the-month unemployment rate increases compared to 21 states in the October report. Five states had decreases compared to 23 states last month. Seven states had no change compared to six last month.

Unfortunately, statistics show unemployment is getting worse not better. First, new unemployment claims rose to 542,000 last week; the highest number of claims since July of 1992. Secondly, the four week average of claims rose to 506,500; the highest in 25 years. Third, the number of people continuing to claim unemployment is more than 4 million. This is the highest number since December of 1982. And finally, although mass layoffs were declined to 2,140 for October, it is still the second highest number for the year 2008

Until today, many Americans were going to have a bleak Christmas. On October 3, 2008, the House of Representatives approved H.R. 6768 by a landslide vote of 368 to 28. However, when Senator Wayne Allard of Colorado made an objection to the Senate Majority Leader, Harry Reid’s last minute motion to adopt S3507, the Senate convened until after the elections. At that time, 800,000 people had exhausted their extended benefits with an expected 350,000 more in November and December. However, thankfully, just in time for Thanksgiving, the Senate and Bush approved H.R.6867.

Unemployment Extension Bill Provisions

H.R.6867 contains the following provisions:

• Seven weeks of extended unemployment insurance benefits for all states.
• An additional seven weeks of extended unemployment benefits for states whose unemployment rates are over 6 percent (the latest three month average).
• For those who exhausted their benefits before the bill was approved, benefits will not be retroactive.
• Workers who qualify for the extended benefits before the end of March 2009 will continue to draw their full benefits. However, workers who exhaust their benefits after the end of March 2009 will not be eligible for the second round of extensions.

The Future of Unemployment

Although the unemployed may be able to sleep more peacefully for now, what happens if the job situation does not improve? Goldman Sach’s economists predict will hit 8.5% next year and even higher in 2010.

Brian Wesbury and Robert Stein of First Trust Advisors believe the unemployment extensions are fueling the unemployment rate. Since the first unemployment extension in June, the unemployment rate has risen from 5.5% to 6.5%. Normally, when the unemployment rate rises, there is a decrease in people working or looking for work. Consequently, since you have to be looking and available for work to receive unemployment insurance, they believe the extensions are an incentive to remain attached to the workforce.

If the extensions are responsible for the rise in the unemployment rate, I believe it is a miniscule factor. The month-over-month unemployment rates were rising since the beginning of the year, and October marks the tenth straight month of payroll reductions. The first unemployment extension was signed until June 30, 2008. Furthermore, in July 2008, there were 2.6 unemployed workers for every job opening. Clearly, there are not enough jobs to go around.

Conclusion

In light of everything, I am worried about the future of unemployed workers. In the case of both extensions, it was a major struggle to get the bills passed. If our unemployment rates do go up higher than 8%, what then? Furthermore, unlike the unemployed with children who can rely on ADFC, unemployed workers without children have no safety net.

A man willing to work, and unable to find work, is perhaps the saddest sight that fortune’s inequality exhibits under this sun. - Thomas Carlyle

REFERENCES

Bureau of Labor Statistics http://www.bls.gov/

NELP National Employment Law Project http://www.nelp.org/page/-/UI/Oct_08_jobs_statement_final_110708.pdf

NELP National Employment Law Project “NELP Applauds Today’s Senate Action Providing Necessary Relief to Two Million Jobless Workers & the Struggling Economy” http://www.nelp.org/page/-/UI/ExtensionStatementNov20.pdf

US News & World Report “Unemployment Rate: High, but Why?“ http://www.usnews.com/blogs/the-inside-job/2008/11/10/unemployment-rate-high-but-why.html?s_cid=rss:the-inside-job:unemployment-rate-high-but-why