Employers slashed jobs for a third straight month in March and the unemployment rate shot up to 5.1 percent, the highest since the aftermath of Hurricane Katrina in September 2005.
Nearly a quarter-million jobs have been lost nationwide since the beginning of the year, the Labor Department reported yesterday, reflecting the deepening recession in manufacturing and construction and a pullback and cost-cutting by retailers, temporary agencies and other businesses.
Average wage growth of 3.6 percent in the past year continued to fall behind the 4.3 percent inflation rate, setting workers further back as they grapple to pay for food, fuel and other necessities.
It’s frustrating, said Larry Drayton, an unemployed attorney and former D.C. hearing examiner who has been seeking work in the District for two years without success. Mr. Drayton’s unemployment benefits have run out and he has been taking temporary telemarketing jobs paying $8 an hour, with no benefits, just to stay afloat.
I don’t know what to do. I keep applying and applying for jobs, such as law clerk and hearing examiner, which don’t require D.C. Bar membership, yet keep getting passed over, he said. I could easily do these jobs, said the 54-year-old former practicing attorney from South Carolina. That’s part of the problem — I’m overqualified and underemployed.
Mr. Drayton’s experience is typical in many ways. Unemployment has jumped from as low as 4.4 percent last year to 5.1 percent last month because of a slowdown in hiring that started in the private sector and is now spreading to local governments hit by shrinking property and sales taxes. The District recently laid off school managers and has used other cost-cutting measures to cope.
Nationwide, however, government is one of the few areas where jobs continue to grow. An 18,000 gain in government jobs during March partially offset a loss of 98,000 jobs in the private sector. Most of the job gains have been in teaching, law enforcement and health care.
Job-seekers chatting on a Monster.com job board yesterday reported that having a college degree or even an advanced degree and extensive work experience no longer guarantees a job.
We have people with experience and/or college degrees competing with no-skilled people for jobs at terrible wages because the decent jobs are leaving, said Eddy Sand, an unemployed rail worker who lost his job because technology improvements eliminated the need for rail traffic controllers in many areas.
The employee who tries to find a good job and build a wall around it is likely in for a hard lesson, sooner or later, said the Milwaukee resident.
Get a skill, not a job, said one Oceanside, Calif., job hunter who noted that the jobs that plumbers, electricians and hairdressers do cannot be outsourced like some white-collar and manufacturing jobs. The era of do or die college is over. Graduates start out terribly in debt and often without solid prospects.
Stuart Hoffman, chief economist for PNC Financial Services Group, said the accelerating job losses since the beginning of the year suggest the economy dipped into a shallow recession and shrank at a 0.5 percent rate in the first quarter. He expects that to continue until a gradual recovery begins in the second half of the year.
If they ever ring a bell for the start of a recession, this [jobs report] is a bell ringer, he said.
During a typical recession in the United States, the unemployment rate rises 2.5 percentage points, putting more than 2.5 million people out of work.
That means it could go as high as 7 percent if the downturn continues to deepen. But Bernard Baumohl, executive director of the Economic Outlook Group, said he expects the Federal Reserve’s dramatic interest rate cuts and tax rebates approved by Congress to limit the damage this time. He sees unemployment peaking at under 6 percent this year.
The deterioration in the job market appears to have picked up speed since the Labor Department survey early last month, he said, with new claims for jobless benefits soaring to more than 400,000 last week in what is generally regarded as deep recession territory.
Retailers and manufacturers are leading the job cutbacks and are bracing themselves for a prolonged period of poor domestic demand, Mr. Baumohl said. How long? Forget 2008 entirely, and at least part of 2009.
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