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December Job Losses Compound Economic Woes

January 9, 2009 at 6:10 PM EST
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Unemployment rose to 7.2 percent in December, the highest since 1993, according to a new report from the Labor Department. Employers cut 524,000 jobs, and some economy-watchers fear more cuts are still to come. Ray Suarez reports.
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RAY SUAREZ: The dismal December unemployment number was one more sign the year-long recession is deepening. The 500,000 more jobs lost brings the total to nearly 2 million Americans who’ve lost work since September.

Brookings Institution economist Rebecca Blank says those losses are widespread.

REBECCA BLANK, Brookings Institution: It isn’t just manufacturing and construction, which is where it started, but it’s now feeding through into the whole consumer sector, retail trade, business services. And it’s the broad-spread nature of this that really tells you how bad this recession is, that there’s no one who’s escaping it.

RAY SUAREZ: According to Blank, just one job sector has fared well so far: health care.

This morning, President-elect Obama used the latest news to push his plan to save or create 3 million jobs.

U.S. PRESIDENT-ELECT BARACK OBAMA: There are American dreams that are being deferred and that are being denied because of the current economic climate. There’s a devastating economic crisis that will become more and more difficult to contain with time.

RAY SUAREZ: That possibility of a cascading crisis is real, says Rebecca Blank.

REBECCA BLANK: If we don’t act quickly, if the numbers continue to deteriorate in the next several months at the same rate they have been deteriorating in the last several months, it simply increases the hole you have to come out of.

Lawmakers suggest remedies

RAY SUAREZ: At a confirmation hearing this morning, the labor secretary-designate, Rep. Hilda Solis of California, gave senators a broad outline of an employment prescription.

REP. HILDA SOLIS, R-Calif.: This includes promoting what we now know as green-collar jobs. These are jobs that will provide economic security for our middle-class families while reducing our nation's dependency on foreign oil and resources.

RAY SUAREZ: Incentives to create those types of jobs will be a significant component of the economic package.

Elsewhere on Capitol Hill this morning, California Democratic Sen. Barbara Boxer said her state, though suffering amid the recession, has benefited from the race to green-up the economy.

SEN. BARBARA BOXER, D-Calif.: If we didn't have the environmental laws we have and we didn't see 400 new solar energy companies take shape because of the laws we have, and more wind and geothermal, and putting people to work, we would be at, you know, double-digit unemployment right now.

More tough times ahead

RAY SUAREZ: Some economists are forecasting double-digit unemployment nationwide. And businesses are now laying off people in anticipation of even tougher times ahead.

Yesterday, 200 people lost their jobs at Lenovo's computer-making facility in North Carolina. A company executive explained why.

RAYMOND GORMAN, Lenovo: We're taking these actions now for -- to ensure our cost competitiveness, to help our operational efficiencies, and to help ensure our future growth.

RAY SUAREZ: But fighting that effort to restore growth is a larger and much more daunting unemployment figure lurking behind today's numbers.

REBECCA BLANK: You want to look at the number of people who are working part-time but would really want full-time work and are looking for full-time work.

And you want to look at what is often called the discouraged workers, the marginally attached workers, workers who really want and need work, but haven't been looking very actively because they've been turned down so many times that they've simply become discouraged.

If you add those groups together, you find that, you know, 13 percent of the labor force is either unemployed or discouraged or involuntarily working part-time.

RAY SUAREZ: That 13 percent number represents about 20 million Americans now either looking for more work or any work at all.