Unemployment Rates Soar!

Originally published on Perez Philton’s Money Bag!

The United States Department of Labor released data today indicating that 598,000 jobs were lost in the month of January, sending the unemployment rate upwards from 7.2 to 7.6 percent. Compared to January of last year, when the jobless rate was at a mere 4.9 percent, this increase opens 2009 with the biggest monthly loss since December 1974, and the unemployment rate is now the worst it has been in 16 years.

“Everyone’s trying to figure out, ‘how badly are we spiraling out of control?’” said Marc Lieberman, an economics professor at New York University. “7.6% is high unemployment, but it’s not as high as we’ve had in previous recessions. It’s the idea that it’s 7.6% and it’s getting worse every month – it’s accelerating.”

Lieberman also expresses that though the unemployment rate is bad, the percentage fails to truly express how dire the nation’s economic situation is. “The unemployment rate itself vastly understates the extent of the unemployment problem. The worse the economy, the more the unemployment rate understates how bad things really are… people know they aren’t going to find a job, so they stop looking, and they’re no longer counted as unemployed.” 

To that end, Lieberman notes that in the last year, 3 million people have lost jobs, with an entire third of that population being construction workers. Similarly, 207,000 jobs were lost in the manufacturing business in the month of January, the largest decline since October 1982. 

Mayor Virg Bernero of Lansing, Michigan, a town largely dependent upon the automobile industry, is feeling the sting of the crisis. 

“We can’t seem to catch up,” said Bernero. “It’s like quicksand.”

Lansing itself faces a 10.6 percent unemployment rate. And though President Obama’s recent stimulus proposal aims to alleviate the nation’s declining financial situation, Bernero likens it to putting “a band-aid on a hemorrhage.”

Bernero faces what he calls a “fundamental challenge”: how to diversify his town’s economy in the era of globalization and job outsourcing. “We’ve been sold out,” he said. “Industry after industry left and we were living on credit.”

With no end to the crisis in sight, the struggle continues not just for Bernero and Lansing, but the country as a whole. “The American people have had it,” said Bernero. “They’ve been bled dry.”

Yeah, we actually interviewed the mayor of Lansing. He was… a little nuts.


2 Responses to “Unemployment Rates Soar!”

  1. Isn’t the point of this article that even though the unemployment rate has risen, it doesn’t accurately reflect how bad the economy is? If so, the title of the post doesn’t seem right.

  2. Well

    That is part of the point

    But that doesn’t really change the fact that the unemployment rate is indeed soaring

    SO I would say that the title is accurate, if not quite in the spirit of the article, necessarily.


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