For the first time in almost 17 years, the local unemployment rate has hit double digits, reaching 10.2 percent in January, up from 8 percent in December.
According to a report from the Bureau of Labor Statistics released late last week, the unemployment rate in Archuleta County rose over two points from last report to reach its highest level in almost 17 years. The last time the county’s unemployment rate logged in at double digits was in April 1993 when the rate hit 10.6 percent.
The highest reported unemployment rate in Archuleta County over the past 20 years was 12.8 percent in February 1993.
The unemployment news in Archuleta County might be much worse, however, if alternate measures of unemployment could be reviewed.
The 10.2 percent figure represents the U3 number, numbers of first-time unemployment claims added in with ongoing claims for unemployment insurance. However, the BLS does not report the U6 unemployment rate at the county level — an alternative measure which counts part-time workers desiring full-time work, along with numbers of unemployed workers too discouraged to have looked for jobs.
The U3 number for Archuleta County may only represent a portion of actual unemployed (or marginally employed) workers in the county.
In fact, it is instructive to look at BLS figures released last week for the nation. While Friday’s report indicated some good news — 162,000 new jobs created in March, the best showing since March 2007 — with the national unemployment rate holding steady at 9.7 percent, the national U6 number rose from 16.8 percent to 16.9 percent (but down from the 17.3 percent high in December).
Officially, around 15 million Americans are currently out of work.
Nationally, construction, manufacturing, health care and temporary services saw gains in employment, with losses in the information industry and financial services sector. Jobs in transportation and warehousing, leisure and hospitality, and the wholesale/retail trade held steady.
Continuing through June of the year, temporary employment for Census jobs should provide a slight boost in local and national employment figures, with an estimated 1.15 million workers eventually hired. However, analysts will discount that artificial boost in employment when looking at the overall health of the economy during that period.
Nationally, around 48,000 jobs have been accounted for by Census jobs, so far.
While the creation of 162,000 new jobs in March is better news of the national economy than has been reported in quite some time, the number of jobs created represents a fraction of what is required to reverse past unemployment trends. In fact, many analysts report that it would require the creation of 200,000 a month over the next year to decrease the national unemployment rate by 1 percent and that, if the national economy could sustain the creation of 200,000 jobs per month, it would not be until October 2013 that unemployment levels would return to those comparable to when the recession began in December 2007.
However, particularly troubling is the number of long-term unemployed indicated in the March report. According to the BLS, workers who have been unemployed for more than 26 weeks (and still want a job) rose to a record high 6.55 million workers — 4.3 percent of the civilian workforce. During the recession in the early 1980s, numbers of long-term unemployed peaked at 2.9 million or 2.6 percent of the labor force.
The housing bubble, arguably the main cause of the latest recession, could be the primary factor in inflated long-term unemployment figures. First and foremost is that many workers could either be under water with their mortgages (owing more than their house is worth) and so, are reluctant to move to pursue other work, or are unwilling to sell a house due to declining values, also preventing them from seeking employment elsewhere.
Another factor could be the large numbers of workers who went into the construction trades as the housing bubble gained momentum — a situation especially true in Archuleta County, where, in 2007, 15 percent of the local economy was tied to construction (according to a 2009 Region 9 report). Unfortunately, those skills have not been easily transferable in an economy that has seen a nationwide drop in commercial and residential construction.
Furthermore, given the availability of work and easy money (i.e. questionable loans), many workers purchased houses and could find themselves in a double-bind of not being able to find work in their chosen trade, while unwilling to walk away from a house that continues to plummet in value.
While the Archuleta County Treasurer’s office does not collect vocational data, recent trends in foreclosures (“At a record high,” said County Treasurer Betty Diller) suggest that the housing bubble has been responsible not only for large numbers of unemployed construction workers locally, but also an explosion in local foreclosures.
According to Diller, the county has taken 70 foreclosure filings in the first quarter of this year compared to 45 filings during the same period last year. “We are seeing some of those from last year,” Diller said, “that were able to work something out with the lender, but have since been refiled.
“They had enough ability last year to think they could pull it off, so some of them had to have had jobs,” she added. “It’s just awful to see this many so soon this year.”
It is impossible to know how many of these foreclosures are on homes purchased by workers in the construction trades and what effect foreclosures in general will have on that industry, but what is known is that the reported 10.2 percent unemployment for Archuleta County is on the low side, and not just because the U6 number, while unknown, would most likely be much higher than the U3 counterpart. Given that many local construction workers are self-employed as contractors (or subcontractors), those workers would not count in local unemployment filings (the primary U3 metric) as they would not qualify for unemployment insurance.
As the economy appears to turn around on the national level — at least as far as lower unemployment numbers, an uptick in the GDP and a stock market that continues a vigorous upward trend — Archuleta County seems to lag behind most of the rest of the nation, as far as slowing down the recession and easing unemployment.