Weak job growth continues in June as Extended Unemployment Insurance Benefits cut-off looms
San José, CA – On July 6, the U.S. Department of Labor announced that only 80,000 net new jobs were created in June. This was less than most mainstream economists predicted and far less than what is needed to put the millions of unemployed back to work. So it was no surprise that the official unemployment rate stayed the same from May to June, at 8.2%.
June marked the third month in row that less than 100,000 net new jobs were created, after much stronger job growth at the beginning of the year. There are still almost 4 million fewer jobs in the U.S. than when the last economic expansion ended in December of 2007. At June’s rate of job growth, it would take four more years for the economy to just regain the jobs lost during the recession.
Unemployment for African Americans continued to be twice that of whites, at 14.4% vs. 7.4% for whites. This gap widened in June, as the unemployment rate for Blacks rose 0.8% from May, while the rate stayed the same for whites.
Another sign of weakness in the job market was that a third of the net new jobs came from temporary work. Over the last three months businesses have hired about a million more part-time workers. At the same time they have cut 700,000 full time workers. In addition, there are more and more self-employed people, largely made up of those who do contract work. This trend of replacing full-time workers with more and more part-time and temporary workers makes the lives of working people even more unstable and stressful.
On top of a weak labor market, federal Extended Unemployment Insurance benefits are set to expire at the end of the year unless Congress renews them. The congressional Republicans have already forced the length of federal extended benefits to be cut from a maximum of 73 weeks (in states with high unemployment) to only 53 weeks (this falls to 47 weeks in September). This was done by eliminating the federal Extended Benefits (EB) program and cutting back on the Emergency Unemployment Compensation (EUC) program.
If nothing is done by Jan. 2, 2013, there will be no federal Extended Unemployment Insurance at all and jobless workers will only be able to get the state unemployment insurance, which lasts for 26 weeks (6 months). With more than 40% of all unemployed, which comes to more than 5 million people, out of work for more than six months, only six months of state unemployment insurance is grossly inadequate.