Lex Column in the Financial Times got it right: “… ‘less
down’ is now the new ‘up’ as media watchers search for stabilization
in the overall market.” The writer was referring to the world of
advertising where some analysts were putting a hopeful spin on revenue
that fell 18 percent over the first three months of the year – the
eighth quarter in a row to record a drop. But, the same might be
said for the buzzwords describing the latest unemployment statistics.
“Still terrible, undoubtedly, but a bit less terrible,” said Ian
Shepherdson, chief U.S. economist for the High Frequency Economics.
know. I made the same observation when the April jobless stats were
released. But still, this verbal sleight of hand fascinates me,
especially when some figures are highlighted while others are deemphasized
Saturday, AARP sent out an email that looked at first like green
shoots in the economic wind until, you got to this line: “The employment
picture may be opening up ever so slightly. Economists say employers
are likely to begin hiring cautiously in the first half of next
year, though the unemployment rate could still continue to climb.”
Friday it was reported that there had been a slight drop in the
number of people receiving unemployment insurance payments and a
decrease in the number of new claims. “This report provides a glimmer
of good news for job seekers, though both declines were small and
the figure remains significantly above the levels associated with
a healthy economy,” said the Associated Press. Meanwhile, Shepherdson
told the New York Times, “These are still terrible numbers.
We’re a million miles away from a recovery.”
the course of last month the average work week declined to its lowest
point since 1960s and the numbers of people out of work for over
six months rose to 3.9 million.
Lieberman, senior economist at FOXBusiness last week pointed out
that the jobless rate for college graduates is soaring and “(T)he
gap between the number of people unemployed and those collecting
unemployment insurance widened to more than 5,000,000.”
rose over the first quarter of this year. A total of 345,000 jobs
were lost but that was noted as a “much smaller-than-expected reduction.”
The analysts’ forecast for the May jobless rate had been 9.2 percent.
It turned out to be 9.4 percent, the highest in over two decades
(14.5 million people). Inexorably, the level continues to rise toward
that dreaded one out-of every ten people looking for work being
unable to find any. And, as is usually the case, the figures are
jobless rate for African Americans has stayed pretty much the same
since the beginning of the year: 9.7 percent in May 2008, 15.0 percent
in April 2009 and 14.9 percent this May. (Although the number of
black people actually working - the employment-to-population ratio
jobless rate for Latinos went from 7.0 percent in May 2008, to 11.3
percent in May 2009, to 12.7 percent last month. Meanwhile, the
seasonally adjusted rate for young black people (16 –19 years) went
from 32.3 in May 2008, to 34.7 in April 2009, to 39.4 percent this
May – the highest level so far this century.
overall rate for teenagers stabilized at 22.7 percent
may be a little less terrible - unless you are Latino or a young
African American woman or man new to the job market.
Or, somehow related to a car dealer.
cloud hanging over the employment picture, one that could throw
cold water on any optimism is the situation in the auto industry.
Only when the jobless figures for June are tabulated will we get
a look at the impact of the crisis there. General Motors is slated
to shut down 14 plants in the U.S. As matters stand, Chrysler and
General Motors plan to shutter 25 facilities - 14 for GM and, eight
The Center for Automotive Research estimated that as a result
of the bankruptcies at General Motors and Chrysler, 63,000 jobs
will be lost with another 179,000 to disappear next year. That’s
if all goes relatively well. Last month, the center released a new
study that says auto industry related job loss could be as much
as 1.3 million jobs in the first year if the bankruptcy reorganization
plans don’t come off as well as anticipated.
is estimated that the auto industry has lost about half of its jobs
over the past decade. As could be expected, the layoffs have hit
plant workers in African American communities especially hard. However,
there is another group that stands to lose out big time: African
America, Latino and others in the auto retailing business. These
are entrepreneurs who can legitimately be called “middle class”
and their numbers are not large in comparison with assembly line
and office workers. Still, the “ripple effect” will be large.
May 24, the Wall Street Journal reported that “Minority car
dealers are expected to be hit hard as General Motors Corp. and
Chrysler LLC trim their retail networks, undoing years of work by
the auto makers to bring more African-Americans, Hispanics and others
into the car business.
on Thursday said it would drop 789 of its 3,200 dealers as part
of its bankruptcy restructuring. GM plans to eliminate 2,600 of
its more than 6,000 dealers as it reorganizes.
National Association of Minority Automobile Dealers estimates that
140 of Chrysler’s 170 to 175 minority-owned franchises could be
closed, and at least 174 of GM’s 300 minority-owned dealers could
shut their doors.”
reasons minority car dealers will be hit so hard are numerous: many
are located in metropolitan centers, are smaller and pay rent on
their showrooms and a large proportion of them deal in models that
are slated to be phased out - Pontiacs, Saturns, Saabs and Hummers.
minority car dealers are appealing – along with others – to the
government for assistance but if things go down like it appears
they will, a lot of African American and Latino teenagers who might
otherwise been able to afford college will find it difficult, a
gloom will be felt in Sag Harbor before Labor Day and it will be
tough on a lot of hair salons, repair shops and travel agencies.
the jobs picture is mixed at best,” David Rosnick, an economist
at the Center for Economic and Policy Research, observed last week.
“Though employment losses have slowed in May, this may reflect that
many sectors including construction, manufacturing and employment
services have already lost large numbers of jobs over this recession
and, therefore, have fewer jobs to lose. Unemployment continues
to rise and workers’ purchasing power is not growing. Continuing
deterioration in the housing market and planned layoffs in the automobile
sector indicate that the current high rate of job loss may yet continue
through the summer.”
week, Austan Goolsbee, a senior economic adviser to President Obama,
put a somewhat different perspective on the May unemployment figures.
In a June 5 interview with the Financial Times, he said, “If you
lose 300-plus thousand jobs, that’s bad. There’s no sense in which
that’s good. It’s just better than it’s been for several months.
Everybody ought to take stock of that.”
evidence mounts that while the Obama Administration’s economic stimulus
package may have help to slow the pace of jobs loss, its goal of
saving or creating three and a half million jobs is not in sight.
The severity of the new jobless number was not lost on the White
House. This week, President Obama pledged to speed up the dispersal
of stimulus funds already sanctioned. However, it can’t happen too
soon and it doesn’t appear to be enough. Thus there is an imperative
need to look at the situation again and heed the calls for a new
even larger effort to put money in the hands of people who will
spend on goods and services others can work to provide.
and until that happens, the monthly jobless figures will continue
to be terrible even when they are less terrible than before. The
sightings of “green shoots” will be of little comfort to the millions
out of work and remaining out of work for longer periods, or not
being able to enter the job market. Especially for African Americans
and Latinos – especially the kids.
Board member Carl Bloice is a writer in San Francisco, a member
of the National Coordinating Committee of
the Committees of Correspondence for Democracy and Socialism
and formerly worked for a healthcare union. Click here
to contact Mr. Bloice.