Labor and Employment

According to reports released today by the Bureau of Economic Analysis, national personal income increased by $42.4 billion – or 0.3% - in July compared to June. Personal consumption also went up in July, increasing by 0.8%. Growth rates in July were similar to those in June, when personal income increased $27.7 billion, or 0.2%, and personal consumption was up 0.1%.  Personal income was up 5% over July 2010.  

According to the Congressional Budget Office, the $825 billion stimulus law (ARRA) enacted in February 2009 has had a significant impact on the economy, including levels of employment. The CBO estimates that  ARRA’s policies had a number of effects in the second quarter of calendar year 2011, when compared with what would have occurred had the stimulus not passed, including an increase in GDP, a lower unemployment rate, an increase in the number of people employed and an increase in the number of jobs. 

On August 22, 1996, President Bill Clinton signed into law an historic overhaul of the country’s welfare programs. Fifteen years later, during one of the most prolonged economic downturns in U.S. history, some states are actually seeing declines in the number of their citizens accessing TANF - Temporary Assistance for Needy Families - which is the nation’s cash assistance program for poor families with children.

As the national unemployment rate hovers around 9.1% and with state unemployment rates as high as 12.9 percent, states are still struggling to pay out unemployment benefits. In September 2006, Michigan became the first state in recent history to borrow money from the federal government so that it could continue to send out unemployment checks. Now, 28 states plus the Virgin Islands are currently borrowing money and next month, many will have to start paying interest on those loans.  For most, the bill will be in the millions of dollars.  

Although childhood poverty rates declined throughout most of the 1990s, they have been on the rise again.  Between 2008 and 2009, child poverty jumped 10 percent – the single biggest year-over-year jump in the data’s history.  And from 2000-2009, rates increased in 38 states.  That means 1 in 5 children now live in poverty.

Although the wage gap between men and women has narrowed slightly in recent years, the difference between a woman’s paycheck and a man’s is still significant. The ratio of women’s to men’s median weekly earnings (full-time wage and salary workers) in 2010 was 81.2.  That means that a woman who earns a weekly wage that is statistically in the middle of all weekly wages earned 81.2% of what the same statistical middle-of-the-road male earned last year. The median weekly earnings for a female were $669, while a male earned $824.

While the unemployment rate improved slightly in July, state government employment is still falling, continuing a three-year trend.

Among the many strategies of employers seeking employees is a growing tactic used in their help wanted classified ads indicating a requirement that the applicant be “currently or recently employed” thus disqualifying millions of qualified applicants who were laid off when the recession began in 2008.

Elevated unemployment rates remain an indicator of significant economic distress for many states. In June 2013, the national unemployment rate was 7.6 percent, unchanged from May but 0.6 percentage points lower than a year earlier. Thirty-seven states and the District of Columbia had unemployment rate decreases from June 2012 to June 2013 while seven states had increases and six states had no change.

Shortly after the Great Recession began, states started struggling to keep their unemployment insurance (UI) trust funds afloat. UI trust funds are used to pay out unemployment benefits to citizens. Primarily because of sustained high unemployment rates, long-term unemployment and unsustainable funding models, those UI trust funds have been exhausted, leaving states with a negative balance no choice but to borrow from the federal government.