|Issue of the Day Posts Tagged ‘Unemployment’|
According to Health and Human Services, the welfare rolls have been rising in most states over the last year. In the some of the hardest-hit areas, one would think the rolls would raise the most; yet, the numbers are decreasing. Utah is leading the trend as rolls have increased by 29% more cases than last year. Yet, Michigan, a state facing the highest unemployment, has experienced 4.8% reductions in welfare rolls. Authorities suggest that some may be leaving the state for better prospects or the ones who are staying are receiving unemployment benefits. The usual assistance provided by unemployment puts many beyond the eligibility of welfare. Some advocates believe the strict provision of the 1996 revamp of Welfare System has slowed down applicant’s entry into welfare. Nationally, Texas, Georgia, Indiana, Alaska, Montana, New Jersey, and Nebraska all have falling rolls.
As of 2006, the most current data from the Current Population Reports, the Federal Poverty Threshold or poverty line for families of 4 rest at $20,614, an increase of nearly $5,000 from a decade ago. The most vulnerable, children, as of 1996 had experienced near 23% poverty rate; this had dropped to 15% by 2000 and increased after to 17% by 2006. Likewise, families experienced the same rate of decline and leveling to 10.8%; those with only female heads-of-households reached 30.7%.
The news of unemployment may be all around us right now, but what is not really understood is the makeup of the unemployment percentage. The overall number is just that: a composite of different numbers, averaged together, and displayed as a percentage of the overall unemployed among the labor force. For example, “The Labor Force” is just a way of describing us all, blue collar and white collar. Yet, there are those who can withstand recession woes (who can save for a rainy day) and those who cannot (check to check living). What is missing from that single unemployment percentage number is that the recession does not hit everyone equally.
The pre-recession unemployment was at 5% of the overall labor force. Yet, now we are edging on 9.4% unemployment with 5.7 million jobs lost since the beginning of the recession, as May provided 345,000 new jobless claims. Making up a majority of those in the unemployment line are manufacturing and construction workers who tend to be less educated and/or recent immigrants. For minorities such as the black and Latino groups, the Bureau of Labor Statistics states that the rate of unemployment is edging on 20%, leading many to fall instantly into poverty and straining State budgets.
Within the American Recovery and Reinvestment Act (ARRA), there are provisions for those who have become unemployed. Here are some of the major benefits now available. According to the ARRA, a new temporary Federal Additional Compensation program that suggests states up the unemployment benefit $25 per week for the period beginning February 22, 2009. States may also extend the number of weeks benefits available from 13 to 20. The average length of unemployment is 22-weeks. The Act also creates a tax break which exempts the first $2,400 of workers’ 2009 unemployment benefits from taxation. As for COBRA health benefits, there are 2 changes. Eligible individuals are now only required to pay 35% of the COBRA premium instead of the full amount. Another change allows beneficiaries to elect coverage under a second special election period, which skirts HIPAA’s pre-existing condition exclusion rules. Older workers will also benefit, as an additional $120 million is earmarked for the Senior Community Service Employment Program, which trains older workers for new jobs. Further, states that modernize their unemployment compensation systems to include those workers who are looking for part-time work will receive federal dollars to compensate.
These are welcome changes as the unemployment rate for the nation has reached, as of March, 7.9% of the eligible workforce. That is a 3.4 percentage point increase from March 2008. Nationally, those who are searching for less than full-time for economic reasons have reached 8.6 million workers according to the Bureau of Labor Statistics. Also, the recession has had an adverse affect on those who are of the age to retire as the rate of those exiting the work force has decreased from 1.6 million to 1.3 million between 2000 and 2008.
According to the Commerce Department, retail sales have decreased 1.1% in March — forecasts ranging from a decline of 0.2% to a gain of 1.2% — which had followed a 0.3% gain in February. “While the March data isn’t enough to make us rethink expectations that the worst is over, it does serve as a reminder that the road out of this recession might be as painful as the recession itself,” said Guy Lebas, chief economist with Janney Montgomery Scott LLC in Philadelphia. Keeping inflation down, prices paid to US producers fell 1.2% after two months of gains. This excludes fuel and food; these were unchanged along with other core prices.
After sharp increases in retail sales, the purchase of durable goods (e.g., cars, computers, furniture) has, since 2007, started to contract to 2005 levels. And non-durable goods (e.g., food, clothing, energy) have sunk slightly on lower sales of gas and clothing. Inflation has hit Americans hard as food prices, though not changed from February to March of this year, have relatively soared, except milk, which is the only product to have decreased in 2008. Also fueling the drop in retail sales is the ever growing ranks of the unemployed, as the jobless rate hit 8.5% as of last week.
Layoff announcements from last month continued across the industrial spectrum, according to the US Department of Labor, including Macy’s, Time Warner Cable, Estee Lauder, Goodyear, and General Motors. Of the sectors, the service-sector fell the most at 375,000. This includes the businesses and professional services 180,000), financial sector (44,000), retail (40,000), leisure and hospitality (33,000). Temporary employment fell 80,000, and government shed 9,000. Of the goods-producing industries, jobs fell by 276,000. Manufacturing firms cut 168,000 jobs, and construction lost 104,000 jobs. The only bright spot that continues to add jobs is the health care sector, which rose 26,900.
During February, the US economy shed 651,000 jobs, which bring the cumulative job loss to over 4.4 million from December 2007 according to the U.S. Labor Department. Also in this report, December and January’s declines were revised to show much steeper declines. The unemployment rate jumped a 0.5 percentage point to 8.1%, the highest since December 1983. Including the part-time workers, the rate jumps to 14.8% last month, which is 6 percentage points higher than last year. A bit of good news, the average hourly earnings increased $0.03, or 0.2%, to $18.47.