My Final for my HR Class. Unemployment in the US 2008 numbers.

Sep 26, 2008 at 10:14 AM
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Unemployment in the US is hitting record levels. Over the past few years we have begun a trend in outsourcing and unemployment here in the US. Unemployment rates in range from 11.4% in Puerto Rico and Michigan with 8.9% to South Dakota with 3.3% and Nebraska with 3.5% unemployment according to the preliminary reports that were released from the Bureau of Labor and Statistics in August of 2008. Michigan’s unemployment rate is the second worse in our nation. In 2006 CNN was projecting that Michigan’s unemployment rate would reach 7.7% in 2008 but in actuality we have pushed past that point by 1.2% to the whopping 8.9% with Detroit having the highest unemployment rate in the state of 10.9%. Much of Michigan’s economic problems are due to mass layoffs with large companies such as Ford, GM, Bosch, and some smaller companies who have laid off over 50 employees at a time. Michigan was once the leader in the auto industry but has since outsourced much of its work to other locations that could offer cheaper labor.

“From January through August 2008, the total number of mass layoff events (seasonally adjusted), at 12,542, and initial claims (seasonally adjusted), at 1,274,765, were the highest for the January-August period since 2003.

The national unemployment rate was 6.1 percent in August, seasonally

adjusted, up from 5.7 percent in the prior month and from 4.7 percent a

year earlier. In August, total nonfarm payroll employment decreased by

84,000 over the month and by 283,000 from a year earlier.” (U.S. Department of Labor Bureau of Labor Statistics 2008 Mass Layoffs Summary)

I know that these numbers may seem like a lot to take in but the statistics are crazy and turning out to be much higher than most analysts had projected. The US unemployment preliminary reports from the BLS are pretty shocking. Payroll decreasing by 84,000 over one month with an annual decrease of 283,000 from a year earlier. That is a huge amount of decrease considering that payroll is supposed to increase yearly in a healthy market.

“The number of unemployed persons rose by 592,000 to 9.4 million in August, and the unemployment rate increased by 0.4 percentage point to 6.1 percent. Over the past 12 months, the number of unemployed persons has increased by 2.2 million and the unemployment rate has risen by 1.4 percentage points, with most of the increase occurring over the past 4 months.” (United States Department of Labor Bureau of Labor Statistics 2008 THE EMPLOYMENT SITUATION: AUGUST 2008)

This may not seem like that drastic of an increase when you look at the percentage point increase but you have look at the actual numbers. Unemployed persons rose by 592,000 in August alone totaling a whopping 9.4 million unemployed Americans thus far in 2008. With still three more months to go in the year. If unemployment rose by 592,000 in August alone what could happen within the next 3 months. Will it get better or continue to get worse.

“The number of multiple jobholders increased by 298,000 in August to 8.1 million, accounting for 5.5 percent of total employed.” (United States Department of Labor Bureau of Labor Statistics 2008 THE EMPLOYMENT SITUATION: AUGUST 2008)

This means that 298,000 additional workers had to take on a second job to help make ends meet. Many people who are looking to take on a second job are unable to find one due to the lack of available jobs. Outsourcing, downsizing, bankruptcies, poor forecasting, and decreased need for goods have all lead to the decrease in jobs.

“In August, the number of long-term unemployed (those jobless for 27 weeks or more) rose by 163,000 to 1.8 million, an increase of 589,000 over the past 12 months. The newly unemployed those who were jobless fewer than 5 weeks—increased by 400,000 over the month.

The number of persons who lost their last job rose by 417,000 to 4.8 million in August, with increases occurring among those on temporary layoff and those who do not expect to be recalled to work. Over the last 4 months, the number of unemployed job losers has increased by 810,000.” (United States Department of Labor Bureau of Labor Statistics 2008 THE EMPLOYMENT SITUATION: AUGUST 2008)

Outsourcing, downsizing, bankruptcies, poor forecasting, and decreased need for goods have all lead to the decrease in jobs in our country. The strain on the larger company’s bottom lines has caused them to look elsewhere for employees who will work for less money.

When I look at the unemployment charts dating all the way back to 1976 for Michigan and look at the spikes and the falls the only other drastic increase in unemployment that was this steep was from 1979 to 1983. If Michigan’s economy is any sort of an indicator to what could be happening to our country then we could be in for some really tough times here in the future. In 1982 and 1983 the national unemployment rate was 9.7 and 9.6 consecutively. The largest jump in the unemployment rate within a 12 month period was in 1974 to 1975 with an increase of 2.9 percent in one year. The unemployment rate topped out at 9.7% in 1982 the highest national unemployment rate in our nation dating back to 1942. In August of 2007 the US unemployment rate was 4.6% and this year it is already 6.1% from August 2007 to August 2008. Approximately 1.1% of this change has taken place within the last 4 months. If this amount of change is an indicator of what is to come within the next 8 months to a year we could very well see the largest annual unemployment spike dating back to 1942 surpassing the 2.9% increase between 1974 and 1975.

Could our economic situation have been solved by better management and stricter HR departments, streamlining the bottom line, and better forecasting? I really think that if we would have been paying a lot more attention to the bottom line and less attention being greedy that our nation would not be in this situation. Most of these companies were making money over here, they just wanted to make more profit so they took their business elsewhere so they could get cheaper labor and cheaper pricing on buildings and other assets. What will happen to our economy over the next few years? Time can only tell.