A Litany Of Job Losses: When Will It End?
EnlargeNPR.org, January 30, 2009 · Thank God it's Friday. Has there ever been a week like this in American employment history?
Read aloud the litany of lost jobs and it sounds like a funeral knell.
On Monday, Caterpillar construction equipment. 20,000 jobs. Gong …
Pfizer pharmaceutical. 8,000. Gong …
Sprint Nextel telecommunications. 8,000. Gong …
Home Depot home improvement. 7,000. Gong …
Texas Instruments computers. 3,400. Gong …
General Motors automakers. 2,000 Gong …
On Tuesday: Corning glass. 3,500 jobs. Gong …
On Wednesday: Starbucks coffee. 6,700 jobs. Gong …
AOL online. 700 jobs. Gong ...
On Thursday: Ford Motor Co. 1,200 jobs. Gong …
Eastman Kodak cameras. 3,500 plus. Gong …
Also on Thursday the Labor Department reported that nearly 4.8 million people are on the unemployment benefit rolls, a historic high. Anyone who has glanced at the news in the past few days is not surprised.
You know the causes: mortgage shenanigans, housing values falling, construction paralyzed, credit market frozen.
Blues For The Blue Chips
Since October, the blue chips have been singing the blues. Nearly two dozen top-drawer American companies — all are included in the Dow Jones industrial average — have announced job reductions.
So thank goodness this week is almost over. Enough shoes — and stock prices — have dropped already.
Sure, some companies are overselling their woes to bolster stock prices and placate shareholders. But thousands of Americans are losing their jobs.
And wait, there's more. The latest gross domestic product statistics — for the final three months of 2008 — showed the economy shrank at a 3.8 percent rate.
The good news: It has been worse — back in the first quarter of 1982, when the economy contracted at 6.4 percent pace.
A Necessary Restructuring
Rebecca Blank, an economist at the Brookings Institution, says that the economic swamp today reminds her of the recession of the early 1980s. "Then we saw broad and sweeping declines in jobs and rises in the unemployment numbers, similar to today," she says.
The overarching result for the U.S. economy was a restructuring of certain industries, mostly in manufacturing. "The manufacturing sector has continued to shed jobs since then," she says.
Taking a lesson from that quagmire of the 1980s, she says, any sector that is facing increasing competition — basically all sectors — should see the dreadful numbers of recent weeks as a wake-up call. "Many companies," she predicts, "are not going to recover" before the economy begins to expand again.
Asked when that will be, Blank laughs.
"You want to throw a coin in the air?" she asks. There is hope that the government's stimulus package will grease the skids and get the economy back on track, she says, but companies are cautious about bringing laid-off workers back onto the payrolls.
A Mixed Picture
The good news, Blank says, is that the stimulus package could work by "priming the pump" and we could see a growth in business, new jobs created, new demand for goods and services in the next six months to a year and a half.
But there's more bad news: "There are a number of reasons to think that expansion may not happen quickly," she says. The primary reason is that the financial markets and lending institutions seem quite troubled and the recovery will not happen until they are stabilized and the credit crunch eases.
The better news is that labor market figures lag behind other factors. So that means we may still be hearing the knell of layoffs even as the good times return.
The Associated Press contributed to this report.
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- Jan. 30, 2009U.S. Economy Shrank 3.8 Percent In Fourth Quarter
- Jan. 27, 2009Thousands Of Workers Begin Week With Layoffs
- Jan. 16, 2009Searching For Vital Signs In A Sick Economy
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