Fallout: The Financial Crisis

Unemployment cuts across classes

Ashley Milne-Tyte Jan 29, 2009
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Fallout: The Financial Crisis

Unemployment cuts across classes

Ashley Milne-Tyte Jan 29, 2009
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TEXT OF STORY

KAI RYSSDAL: There’s been a fairly orderly and, arguably, predictable sequence of events in this economy. Home values tumbled, which brought on huge losses at banks that made questionable investments in real estate. That brought on the credit crisis and disrupted consumer spending. And that helped convince businesses that they had to cut jobs to survive.

Two-and-a-half-million jobs over the past 12 months. And, judging by a report out today from the Labor Department, millions more to come. The numbers show almost 6.5 million Americans are now getting unemployment benefits, no matter where they used to work or how much money they used to make.

From New York, Ashley Milne Tyte reports.


ASHLEY MILNE-TYTE: Recessions usually hit blue-collar workers hardest. So far the numbers show that’s the case this time around, too.

Harley Shaiken is a labor expert at the University of California, Berkeley. He says this downturn is hitting jobs in every area.

Harley Shaiken: So we can’t simply say, “Well, auto workers are having a tough time, or retail workers are really feeling the pinch.”

But it’s not just blue-collar jobs that are disappearing.

Lawrence Mishel is president of the Economic Policy Institute. He found the jobless rate among four-year college graduates nearly doubled in 2008 from the year before, to 3.7 percent.

Lawrence Mishel: I’ve tracked those numbers back to 1979 and the highest rate I’ve seen is in the early ’80s it was at 3.9 percent. So we’re . . . in the first year of this recession we are nearing the historic high for unemployment among college graduates.

And, he says, expect the layoffs to continue.

John Challenger runs outplacement firm Challenger, Grey and Christmas. He says workers at every level are losing their jobs.

John Challenger: It seems as though companies need to be cutting their costs. They can’t just do that at the low end, so many of the layoff and cost reduction programs have focused on white-collar workers.

He says firms get a bigger bang for the buck in terms of savings when they cut their more-skilled employees. After all, he says, when there isn’t enough business, the need for those skills just isn’t there.

I’m Ashley Milne-Tyte for Marketplace.

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