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Job losses from recession higher than previously estimated

03.15.10

MARCH 2010 Scranton/Wilkes-Barre/Hazleton edition of The Union News

Job losses from recession higher than previously estimated

BY PAUL LEESON
THEUNIONNEWSSWB@AOL.COM

REGION, March 1st- High job losses during the recession continues to overshadow any economic recovery. The employment figures released by the Department of Labor showed mixed news for workers. The unemployment rate has fallen from 10.0 percent in December 2009 with a strong Gross Domestic Product (GDP) figures show reasonably strong signs that the economy is starting to recover.

However, the bad news is that the same figures show that the economy lost over 1 million more jobs during the recession than previously estimated and the unemployment, especially long-term unemployment, remains at troublingly high levels. More than 14 million Americans are out of work, there are six job seekers for every available job, and 4 in 10 unemployed workers have been pounding the pavement searching for a new job for at least six months, a record level.

The Labor Department’s revisions of employment figures show that the economy shed 8.4 million jobs during the recession, instead of the 7.2 million as previously estimated. To give a sense of how big this jobs hole is, the nation would need to create 350,000 jobs per month for the next 24 months just to recover what was lost since the recession began, and that’s not even compensating for population increases. The United States has sometimes been able to create such high levels of job growth after a recession, it took several years before the nation saw consistent job growth and 350,000 were created in only two months of the entire economic cycle.

The news from the job’s report shows the overall direction of the labor market is trending up however, the employment-to-population ratio rose slightly to 58.4 in February from 58.2 the previous month. The ratio is an indication of the total labor market strength.

The average workweek increased by 0.1 hour to 33.9 hours for the month, indicating that companies are starting to need additional labor. And temporary help increased by 52,000 in January and has averaged nearly that level for the past four months.

According to David Madland, a economist with the Center for American Progress, a economic and educational research institute in Washington, DC, what the economy and workers need now is another boost in spending to ensure that job growth is faster and more widespread throughout the economy. A few sectors of the economy are creating jobs, but most businesses are not hiring because they do not see sufficient demand for their goods and services.

“A basic step to boosting demand is to get the unemployed back to work. Employing more people doesn’t just get those workers back on the job, it affects the momentum of the economy, which ultimately creates the cycle of private sector job creation that we need. Unemployed workers have few dollars with which to purchase goods and services, and giving them a job injects an immediate boosts to their family budget and our national economy. We need to build on the successes of the American Recovery and Reinvestment Act (ARRRAct) and use scarce federal dollars in the efficient way to boost demand and get the unemployed back to work,” said Mr. Madland.

The Center for American Progress stated they have put out such a plan, which calls for infrastructure investment and aid to state and local governments, along with direct investments in job creation through initiatives such as expanding our national service programs. And there is growing momentum in the White House and on Capital Hill for these types of job creation policies, the organization states.

The House of Representatives has already passed a jobs bill that would redirect $75 billion of TARP funds toward infrastructure investment and aid to state and local governments.

In the United States Senate, Majority Leader Harry Reid announced a package of job creation bills. The bills are set to include improved access to credit for small businesses, investments in infrastructure and energy efficiency, aid to local governments, increases in youth summer job programs, and targeted tax incentives to spur immediate job growth.

“Congress is taking action on job creation legislation. And this months’ jobs numbers are a stark reminder that they need to do so quickly. The recovery is just starting to take hold, but we are in much a more massive jobs hole than previously through and need rapid job creation to get out of it,” added Mr. Madland.

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