By: Carole Fleck | Source: AARP Bulletin Today | November 6, 2009
More than one in 10 members of the American workforce were jobless in October as unemployment leaped to its highest level in more than a quarter-century.
The nation’s jobless rate rose by 0.4 percent to reach 10.2 percent last month, the highest since March 1983, the Labor Department’s Bureau of Labor Statistics reported Friday. Employers cut another 190,000 jobs, the 22nd straight month that payrolls have shrunk.
For workers age 55 and up, the unemployment rate grew to 7 percent last month, up from 6.8 percent in September. For men in that demographic, the jump was particularly steep, rising to 7.8 percent in October from 7.3 percent one month earlier, says Sara Rix, a policy adviser at AARP.
“These are workers who in earlier recessions may have been able to retire,” Rix says. “Today there’s a lot less retirement security available, in large part due to the [pension] shift from defined benefits to defined contributions, and the big stock market losses that so many experienced in their 401(k)s. I don’t think many workers can afford to retire, so they’re continuing the job search.”
It was taking workers who are 55-plus longer to find a job in October—33.5 weeks, up from 32.8 weeks in September. That compared with 27.2 weeks for younger workers, up from 26.4 percent in September. Of the 2 million people age 55-plus out of work, 44 percent have been jobless for 27 weeks or more.
Many workers have exhausted their unemployment benefits, and President Obama signed a bill Friday extending benefits by up to 20 weeks for millions of people who have been unemployed for six months or more. “I will not rest until all Americans who want work can find work,” Obama said.
Friday’s report was worse than most economists had been expecting. It showed that among all age groups, the number of people out of work spiked to 15.7 million, an increase of 558,000. Since the start of the recession in December 2007, the number of unemployed people has risen by 8.2 million.
Meanwhile, the national unemployment rate has marched steadily higher. It stood at 4.9 percent when the recession began and has risen in 17 of the past 22 months.
Manufacturing and retail were among the sectors that shed the most jobs in October, about 100,000 (health care employment continued to increase, adding nearly 600,000 jobs).
“Household employment has deteriorated considerably. A 0.4 percentage point increase in one month is unusual,” says Sophia Koropeckyj, an economist and managing director at Moody’s Economy.com. “The bottom line is that the labor market is much worse than had been expected. Not only are people still losing jobs at a high rate, but unemployed workers are staying unemployed far longer than during any post-World War II recession. About 3 million workers have been out of work more than a year. Many of these workers have lost unemployment benefits and are in desperate straits.”
Reid Cramer, an analyst for the New America Foundation, a think tank that promotes social policy reforms, says the double-digit unemployment rate will take a toll on Americans’ attitudes toward the economy.
“It’s psychologically relevant for the country,” he says. “It’s like how they price gas. Instead of going up the extra cent, or digit, they say 99 cents. The issue now is where it’s going to go from here.”
Double-digit unemployment also has political implications going into a congressional election year. This week in Virginia and New Jersey, Republicans won governor’s seats held by Democrats, and polls of voters showed that the economy played a key role in both races.
Cramer and others note that the official unemployment rate doesn’t take into account the number of people who are working part time because they cannot find a full-time job, or those who have simply given up looking for work. If those people were counted as unemployed, the jobless rate would be 17.5 percent, the highest on records dating from 1994.
Carole Fleck is a senior editor at the AARP Bulletin.
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