Unemployment and Wages

Posted on January 11, 2011 by townsend

• Downturn’s ugly trademark: Steep, lasting drop in wages, By Sudeep Reddy, January 11, 2011, Wall Street Journal: “In California, former auto worker Maria Gregg was out of work five months last year before landing a new job-at a nearly 20% pay cut. In Massachusetts, Kevin Cronan, who lost his $150,000-a-year job as a money manager in early 2009, is now frothing cappuccinos at a Starbucks for $8.85 an hour. In Wisconsin, Dale Szabo, a former manufacturing manager with two master’s degrees, has been searching years for a job comparable to the one he lost in 2003. He’s now a school janitor. They are among the lucky. There are 14.5 million people on the unemployment rolls, including 6.4 million who have been jobless for more than six months. But the decline in their fortunes points to a signature outcome of the long downturn in the labor market. Even at times of high unemployment in the past, wages have been very slow to fall; economists describe them as ‘sticky.’ To an extent rarely seen in recessions since the Great Depression, wages for a swath of the labor force this time have taken a sharp and swift fall…”
• Residents out of work for longer periods during ’10, By Christopher Behnan, January 9, 2011, Livingston Daily: “Michigan’s unemployed were without work for an average of 40 weeks in 2010, compared to 30 weeks in 2009 and nine weeks a decade earlier, according to the most recent state data. More than 50 percent of Michigan’s unemployed were without work for at least 27 weeks – the federal definition of long-term unemployment – compared to around 44 percent of the nation’s unemployed in 2010. ‘We do have a greater portion of our unemployed who have been out of work for 27 weeks or more,’ said Mark Reffitt, a state regional economic analyst. Data released Friday showed a steady increase in the number of long-term unemployed workers in the nation, for 27 or more weeks toward the end of the year. There were 6.23 million Americans who were unemployed for 27 or more weeks in October, 6.34 million in November and 6.44 million in December, according to the U.S. Bureau of Labor Statistics. There were 308,000 more people unemployed for 27 weeks or more nationwide last month than in December 2009…”