Economic Policy Institute and AFL-CIO comment on February job losses

New employment reports released on Friday by the Bureau of Labor Statistics indicate that the unemployment rate has reached 8.1% which is the highest point in 25 years.
Analysis from the well-respected Economic Policy Institute show that the grim statistics don't tell the entire story.

Heidi Shierholz at EPI points to high rates of underemployment and long-term unemployment:

The underemployment rate (technically known as the U-6 measure of labor underutilization) is a more-comprehensive measure of labor market slack than unemployment because it includes people working part time who want full-time jobs. This measure jumped up dramatically from 13.9% in January to 14.8% in February. As a result, more than one in seven workers in this country—an estimated 23.1 million people—was either unemployed or underemployed in February. Since the start of the recession, the number of involuntary part-time workers has increased by 4 million, from 4.6 million to 8.6 million.

Long-term unemployment—the share of the unemployed who have been without a job for more than six months—also remained high at 23.1%, which is unsurprising given that there are currently over 4 unemployed workers for every job opening.

The EPI report notes that losses are being felt across all sectors of the economy:

Since the start of the recession in December 2007, the economy has shed 4.4 million jobs according to the payroll survey, and that number actually understates the problem because in order to simply keep up with population growth, the country would have needed to have added an estimated 127,000 jobs every month over this period, for a total gain of 1.8 million jobs. In other words, the economy is currently approximately 6.2 million jobs below where it would need to be simply to have maintained pre-recession rates of employment for the country’s workforce.

The weakness in the labor market is being felt across industries—the diffusion index shows that 76.2% of industries lost jobs in February. The steepest declines, however, continue to be found in construction and manufacturing. Construction lost 104,000 jobs in February, for a total decline of 12.0% (904,000 jobs) since the start of the recession in December 2007, and manufacturing lost 168,000 jobs in February, for a total decline this recession of 9.4% (1.3 million jobs). Within manufacturing, fabricated metal products (-27,500) and machinery (-25,300) saw the biggest declines in February.

Job losses are also being felt in the service sector, with private services (excluding government) down 384,000 jobs in February and 2.6% since the start of the recession. Retail trade was down 39,500 in February and 3.9 % since the start of the recession, with continued large losses in motor vehicle and parts dealers (-13,300). Transportation and warehousing was down 48,900 jobs in February, with truck transportation experiencing the largest losses (33,400 jobs). Accommodation and food services also experienced significant declines, down 32,000 jobs last month.

There were continued losses in the financial activities sector (-44,000 jobs), and in professional and business services (-180,000). Within professional and business services, the largest losses continue to be felt in temporary help services, down 77,700 jobs in February and 26.5% since the start of the recession.

http://www.epi.org/publications/entry/jobspicture_20090306/

AFL-CIO President John Sweeney released the following statement on the on February job losses:

America’s steepest drop in employment in over 30 years shows just how long the road to economic recovery will be. The pain of February’s widespread job losses was felt across virtually every employment sector -- with manufacturing and construction especially hard hit. Unemployment among African American men hit 14.9 percent last month – almost double the level a year ago.

The economy has spiraled into a vicious downward cycle: Workers are losing their jobs and can't maintain their mortgage payments. Housing foreclosures are exacerbating the downward slide in housing prices and tightening credit. Frozen credit markets are forcing firms to lay off more workers.

Our country has a tough path ahead as we work to create jobs, restore the middle class and ensure that our economy works for everyone, once again.

Already President Obama and Congress have shown tremendous leadership by passing the American Recovery and Reinvestment Plan, which will create or save 3.5 million jobs – although even more economic stimulus may still be needed. And the President has begun implementing a program to keep Americans in their homes and stem the damage wrought by the foreclosure crisis.

The manufacturing sector alone shed 168,000 jobs in February, and the construction sector lost 104,000 jobs. The crisis calls for more action to strengthen our manufacturing and jobs base. We must do much more to rebuild our roads, bridges, airports and air traffic control system, mass transit and rail networks, and ports; to expand broadband access to all Americans; to ensure that state governments can continue to provide essential public services; to refurbish and build new schools and to invest in clean energy and modernize our electrical grid and energy-delivery network that are key to an economic revival.

Rebuilding a robust real economy, with good jobs and a strong middle class, also demands attention to health care, education, pensions, climate change and other issues.

Across the country, working men and women are struggling to keep their heads above water. We can’t come up short in helping them, for their sake and for the sake of our communities and our entire economy.

http://www.aflcio.org/