Unemployment Benefit Extension Passes As National Unemployment Rate Hits 10.2%

Unemployment Benefit Extension

The last time the nation's unemployment rate was over 10% was in 1983.  It’s been 26 years and October’s numbers reflect a worsening of the recession.  The official US unemployment rate is 10.2%, but this does not count people who no longer qualify for unemployment benefits, those who are under employed, and those who are discouraged and no longer looking for work.  The real unemployment rate, if these groups were considered, would rival that of the Great Depression, when 25% unemployment was seen.  At least back in the 1930’s the official numbers were not skewed and changed to try and reflect a rosier-than-reality employment environment.

All things considered, the recovery may not occur in a very orderly, brisk fashion.  The recession could drag on for another year or two.  The unemployment rate has risen, but job losses are slowing.  This is good news, but companies are learning to do more with less.  This mentality leads many economists to believe that once an economic recovery is at hand, many of the jobs lost over the past two years will not come back.  This is a scary reality and many Americans fear that the brutal combination of outsourcing and economic recession has turned America, once a pillar of manufacturing and production jobs, into a country that no longer produces or manufactures essential and profitable goods.

The 10.2% figure is also worse than many economists had forecasted.  The unemployment rate was forecasted to reach 10% by the beginning of 2010, not by October 2009.  The rate of decrease in jobs is also much higher than earlier expected.  The DOW has recovered to above 10,000, but the jobs are not reappearing.  This has been confusing for many average Americans.  While corporate America is reaping the profits from being able to do more with less labor, Americans left out in the cold are no better off than they were in 1983.

President Obama signed the unemployment benefit extension into law last week giving millions of Americans some much-needed temporary relief.  The bill will go a long ways to help sustain people who are out of work and looking for a job.  The extension gives 14 weeks of extended coverage and gives people in states with unemployment rates over 8.5% an additional 6 weeks of coverage.  This is fine and dandy, but once this extension runs its course, we will likely still be in the midst of a jobless recovery.  Also, once the extensions lapse, those who are still unemployed but no longer able to collect unemployment benefits will no longer be counted in the official unemployment rate.

The promise of temporary seasonal work has helped many people nation wide cling to some shred of hope that they can make ends meet over the holiday season.  The unemployment rate will likely drop in November and December as millions of people take jobs with retailers and service providers expecting a relatively busy holiday season.  But come January, most of these workers will find themselves back at square one.  And the unemployment numbers will certainly reflect this harsh reality.