February 2004
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Day February 27, 2004

Employee layoff numbers still trending in alarming direction

It’s pretty obvious that jobs will be the aspect of the economy which drives the election.  Most Americans equate the health of the economy with the availability of suitable and decently-paid employment, naturally enough.  It’s tough for most people, therefore, to believe that the economy is actually “recovering.”  The stock markets have certainly recovered from a year ago (whether this is only temporary is another question entirely), but it’s arguable that the “economy” as a whole is still in the “trough” of a U-shaped recession/recovery cycle.  

An obvious point, maybe, but data reported this week from the U.S. Bureau of Labor Statistics underscores its reality.  Mass layoff actions were higher in January 2004 than YTY from Jan 2003, despite the fact that month-to-month trends have been declining throughout 2003.  But 2428 mass layoff actions in January, affecting 239,454 workers suggest that the month-to-month trend isn’t telling the whole story.  January is typically a month with a layoff “bump” anyway, due to seasonal employment during Q4, but the increase in January 2004 is higher than can be accounted for by seasonal trends.  It’s also only the third time in the last two years that initial unemployment claims increased, rather than decreasing.  

The industry-specific numbers tell the tale:  35% of mass layoff events in January and 37% of initial claims come from manufacturing.  8%/9% came from retail trade, where you might expect it due to seasonality.  The largest decrease YTY in initial claims were reported in computers and electronics (-3816 YTY) and air transportation (-3695 YTY).  

Regionally, the highest number of initial claims came in the Midwest with 68,404 workers laid off.  In particular, after a brief respite in Q3/4 2003, Ohio is back at Jan 2003 levels of layoffs and initial claims.  And folks in Ohio are pissed off, and for the first time in his presidency, Bush is below 50% approval in that state.  Rep.  Ted Strickland (D-OH) is quoted in the Washington Post as saying “there is a dissatisfaction and anger with this administration I haven’t witnessed since I don’t know when.  Unemployment and health care are huge concerns.  The veterans are angry with their treatment.” 

Kerry needs to get into Ohio and provide these folks with concrete reasons to support him.  I don’t know much about whether Kerry’s proposed manufacturing jobs credit will specifically help the Ohio situation, but it seems like it’s gotta work better than simply assuming that retraining programs (the cornerstone of Bush’s program) will benefit folks in rural Southeastern Ohio.  Retraining is great – I’m not knocking it – but without a reservoir of knowledge-worker companies located in SE Ohio ready to hire the retrained workers, it’s not a concrete solution. 

And while it may seem a bit crass to look at layoff numbers and then talk electoral strategy, it may be that the best thing we can do to help laid off manufacturing workers is focus on electing Kerry and letting him try to put his “first 100 days” plan into action.