Economy turndown pressures local workers

Local unemployment numbers, though slightly more positive than state or national figures, nonetheless reflect larger trends and might infer harder times ahead.

According to the Bureau of Labor Statistics (BLS), unemployment numbers for Archuleta County have increased from 3.7 percent in September 2007 to 4.4 percent for September 2008. Interestingly, the September numbers are down slightly from previous months, trending down from 5.0 percent in June of this year.

Unfortunately, the dip in local unemployment numbers — mirroring a statewide trend — may be an exception rather than the rule. Explaining the anomaly in a press release, Donald Mares, executive director of the state labor department, said that the drop is “likely to be a temporary respite.”

According to a report released last Tuesday by the Colorado Department of Labor and Employment, more than 136,000 Coloradans were unemployed and looking for work in September, compared with roughly 103,000 a year ago.

Locally, Gabe Torres, employment specialist with the local Colorado Workforce office agreed with Mares’ assessment and its bearing on the local job situation, saying, “We’ve seen a huge influx of unemployment claims since mid-October and it continues to get worse. The numbers are increasing.”

Although there are currently no hard numbers to substantiate Torres’ claim (BLS numbers for October will be released tomorrow), the observation appears to fit with statewide indicators.

Colorado’s unemployment rate was 5.2 percent in September, up from 4.0 percent the same month last year, slightly better than the overall U.S. unemployment numbers. Nationwide, the BLS reported last week, the unemployment rate was 6.5 percent for October.

Statewide, an almost flat job growth rate has contributed to increases in unemployment. With just a 1 percent increase in jobs, Colorado has only 24,100 more jobs than it did a year ago. During the first nine months of 2008 Colorado averaged a job growth rate of just 1.6 percent, while the U.S. growth rate, hammered by several consecutive months of job losses, is 0.1 percent.

September hastened the decline in unemployment as job growth in Colorado slowed to 1 percent, half the pace seen at the start of the year.

The outlook looks grim, both locally and nationally, as a report released Monday by the National Bureau of Economic Research forecasted the nation’s unemployment rate rising to 7.5 percent by the end of 2009, the highest unemployment numbers in 14 years.

The report also stated that the U.S. is officially in a recession. The announcement follows various reports from the previous weeks indicating a global recession as most European and Asian countries reported prolonged negative economic growth and rising unemployment. Furthermore, an NABE survey showed that 96 percent of economists believe the recession will be “prolonged and painful,” lasting well past the first quarter of 2009.

With accelerating unemployment and tightening credit, reduced consumer spending only compounds the problem. In a government report released Nov. 14 by the U.S. Department of Commerce, retail sales in October suffered the worst monthly drop on record, slumping 2.8 percent from the previous month. Although local retail sales numbers are not yet available, Pagosa Springs town manager David Mitchem told town council earlier this month that, “I’ve talked to local business owners and they’re having problems, they see a downturn.”

Torres does not foresee the situation improving in the near future. “We’re trying to get employers for hiring and it’s dismal. If there’s anything new in the area, it gets swamped.”

Torres pointed to the job data base used by the local Colorado Workforce office and only 12 jobs were listed for Archuleta County. The office also points job seekers to The SUN classifieds which last week had 16 ads for employment opportunities. Although there are 23 job opportunities listed in this week’s SUN, three are for work with the school district and three are for jobs in Durango.

“No one is travelling to work because of fuel prices,” Torres said, “When we had the fuel crunch this summer, it affected everyone, from the construction worker to the dishwasher.”

Torres was quick to point out that the Colorado Workforce center is not responsible for unemployment claims but workers applying for unemployment have to register with the office as part of their job search task. Torres acknowledged a sharp rise in unemployment claims, especially over the past several weeks.

How rising unemployment might be straining the current system of assistance has yet to be determined. According to a report published in the Nov. 16 edition of the New York Times, the safety net that has traditionally kept Americans afloat has been weakened in past years and may be ill-prepared to handle the implosion of U.S. worker rolls. Changes to the system, originating during the Reagan administration, tightened eligibility for job benefits such that just 37 percent of unemployed Americans currently receive jobless benefits, 42 percent fewer than during the 1981-82 recession, 50 percent less than during the 1974-75 downturn. Furthermore, unemployment benefits cease after a maximum of 39 weeks, down from 65 weeks in the 1970s.

Currently, the national average weekly unemployment benefit is $293. Benefits are based on a percentage of an unemployed worker’s previous wages and are allocated from the federal level. Therefore, workers who qualify for unemployment should not be affected by regional economic conditions.

However, supplementary programs in place for the benefit of the unemployed are not necessarily immune to the ailing local economy.

Erlinda Gonzales, director of the Archuleta County Department of Human Services, the agency that handles food assistance (food stamps) applications, stated, “We’re already seeing a trend, a significant rise in filing numbers since the beginning of October.”

Gonzales pointed out that local private charitable organizations have likewise seen an increase in requests for assistance. “The Pagosa Outreach Connection (a network of area churches and businesses that contribute money and resources for area residents in need) is seeing more families coming in, recently. And those needs are greater than before.”

When the POC first started, “We saw people asking for $100-200 to help them make rent. Now we’re getting people asking for $1,000 or more because they can’t make their mortgage payment.”

Pastor Don Ford from the First United Methodist Church (a participant in POC) backed up Gonzales, adding, “We’re seeing a fifty to seventy-five percent increase for food box donations from the same time last year. Last week, we gave out twenty boxes alone. We’re getting more people asking for other assistance like utilities and prescriptions. And just this week, I had three people come in to ask me if there was any work at all. We’re seeing entire families out of work.”

Another organization, Operation Helping Hand, reports more than 200 families have filed applications for food boxes with the Department of Human Services, the greatest number of families to request Thanksgiving food assistance since Operation Helping Hand was created in 1989.

Until an economic turnaround occurs, federal and local agencies can only provide stopgap measures for families in need and an economy still spiraling downwards. The $25 billion bailout for the auto industry currently before Congress includes a proposed extension of unemployment benefits. However, with ambivalence for another bailout, the possibility a lame duck Congress will pass benefit extensions appears unlikely.

. Along with proposing a $100 billion economic-stimulus package for early 2009, president-elect Barack Obama has also gone on the record in support of extending unemployment benefits.

A revived economy may be, unfortunately, a long time coming. With safety nets stretched to the limits and many families experiencing not just pain but poverty, it could be a very long time before both families and the U.S. economy are able to be set aright.

jim@pagosasun.com