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TMCNet: Job losses take toll on 'American Dream': Uncertainty of future makes workers anxious

[January 10, 2009]

Job losses take toll on 'American Dream': Uncertainty of future makes workers anxious

(New Haven Register (New Haven, CT) Via Acquire Media NewsEdge) Jan. 10--American workers have gone from worrying about the falling value of their homes to being increasingly nervous about whether they will remain employed and keep roofs over their heads.

In December, 524,000 jobs were eliminated across the country and the nation's unemployment rate spiked to 7.2 percent, according to data released Friday by the U.S. Department of Labor. By the end of 2008, the national economy had shed 2.6 million jobs and 11.1 million people were left unemployed.

"Ninety-three percent of the labor force is employed. So, in the aggregate, we're OK," said Donald Klepper-Smith, chief economist for DataCore Partners LLC in New Haven and chairman of Gov. M. Jodi Rell's Council of Economic Advisors.

But there is a growing number of Americans who feel "squeezed," he said, by hits to the three key elements to building wealth. The mortgage crisis pulled down home values, turmoil in the financial market continues to diminish investment and retirement portfolios and a "red flag" in the Labor Department's report hints that the deepening recession is likely to claim more jobs this year.

The average workweek fell in December to 33.3 hours, the lowest since 1964. "Employers tend to slash hours before they slash jobs, Klepper-Smith said. "It's a clear sign that there's more job losses in the pipeline. This is a recession that stands to get worse before it gets better."

That trend is a danger to the country's financial security because of the links employment has to income and spending. "The two most important indicators going into 2009 were confidence and jobs. As you feel, you spend," Klepper-Smith said.

The less consumers spend, the more profit margins for businesses are pressured.

In manufacturing, 149,000 jobs were lost during December, posting the largest overthe-month decline since August 2001. The construction industry eliminated 101,000 jobs, while professional and business services slashed 81,000 positions.

More than half of the job losses in the retail sector occurred during the last four months of 2008. The retail trade saw a 67,000 decline in December, bringing the yearly total in that sector to 522,000.

Preliminary statistics on the Connecticut's labor market for both December and all of 2008 are expected to be released in about two weeks. As of November, the most recent data available through the state labor department, Connecticut had lost 5,100 jobs in the month and the unemployment rate stood at 6.6 percent.

State Sen. Leonard Fasano, R-North Haven, said this week during the Greater New Haven Chamber of Commerce's 2009 Regional Legislative Reception that thousands more will be out of work on Wall Street by the end of January. That would affect state residents and, in turn, state income tax revenue, he said.

The state is facing a $368 million deficit, Fasano said. "It will probably jump to $500 million or better," he said.

At the same event, state Sen. Toni Harp, D-New Haven, identified work force development programs as services that should be protected during the current economic crisis, along with public safety and homeland security, education and certain environmental initiatives.

State Rep. Cameron Staples, D-New Haven, said Rell's economic advisers have recommended that the legislature not compound existing circumstances by laying off thousands or workers or slashing aid to municipalities to the point that they are forced to resort to steep layoffs.

"I think we've got to start taking things on in a different way," Staples said.

There is a strong focus this year, Harp said, on accountability and linking funding decisions to program results.

The Labor Department's release reflected job growth in the health care industry, which gained 32,000 jobs in December and 372,000 last year overall.

To see more of New Haven Register, or to subscribe to the newspaper, go to http://www.nhregister.com.

Copyright (c) 2009, New Haven Register, Conn.
Distributed by McClatchy-Tribune Information Services.
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