11 Million Americans Now Unemployed

The unemployment rate ballooned in December to 7.2%, up from 6.8% in November and 5% in April, according to a government jobs report released today.

As the nations employers shed 524,000 jobs last month, more than 11 million Americans are now unemployed.

Last month’s unemployment rate was the highest since January 1993, when the economy was trying to recover from the 1990-91 recession. The lost in total jobs for 2008 was the largest since 1945.

“These numbers, back to back, of more than a half million a month suggest that the U.S. economy is in a freefall,” said Nariman Behravesh, chief economist at IHS Global Insight, to The New York Times. “It’s scary, and it indicates that unless something is done and done quickly to turn this economy around, we’re looking at an awful situation this year.”

NYT

The toll of job losses cut across every sector. Nearly 800,000 manufacturing jobs were lost in 2008, and 630,000 construction jobs disappeared as home-building slowed. Jobs dried up in the financial sector, in publishing houses and trucking companies, department stores and hotels.

“This is unprecedented,” said Mark Zandi, chief economist of Moody’s Economy.com. “It’s coast to coast. It’s everywhere. There’s really no refuge in this job market. There’s no safe place.”

“Even with a stimulus package, the unemployment rate is going to keep rising and by December it is likely to be over 9 percent,” said David A. Levy, chairman of the Jerome Levy Forecasting Center. In a speech on the economy, Mr. Obama said Thursday that the unemployment rate “could reach double digits.”

The accelerating job loss — more than one million jobs have disappeared in just two months — suggests that the recession will last at least into early summer, making it the longest since the 1930s. The severe recessions of the mid-1970s and early 1980s each lasted 16 months, the current record.

Source: The New York Times
Source: The New York Times

But remember, it’s all in how you look at it. 236.com, for example, makes a comforting observation: 92.8% of us are NOT seeking unemployment benefits.

IT Salaries Tanking

The economy is bad, and it’s hitting the IT sector head on.

The country is experiencing the lowest hiring demand for IT professionals in at least 15 years as extensive layoffs, cost-cutting and hiring freezes are putting the squeeze on higher-payed positions, like IT jobs. This is according to a survey of IT salaries from Janco Associates.

The mean salary for IT positions in mid-sized enterprises dropped 2.91% to $73,607. The mean salary for IT positions in large enterprises dropped less; it fell 1.2% to $81,128.

IT Salaries Are Now Lower Than They Were During The Dot-Com Bust
IT Salaries Are Now Lower Than They Were During The Dot-Com Bust

In addition to salary cuts, employers are cutting jobs and cutting benefits to those they keep on payroll. Health insurance and other benefits are either being cut, or employees are being required to pay more into them out of their own pockets. For the second time in less than 10 years, data suggests that more IT professionals are delaying retirement.

Particularly vulnerable IT positions for layoffs include software engineers, network technicians, network services admins, directors of IT planning, managers of technical services and disaster recovery admins.

Some IT jobs seem relatively safe, despite the economy. These include database managers, internet systems managers, database specialists and systems programmers.

“The job market for IT professionals is one of the worst that I have seen since the late 1970s. There is a surplus of IT talent and companies are in a cost-cutting mode,” Janco Associates chief executive Victor Janulaitis said in a statement. “The dot-com bubble was a cake walk compared to this job market.”

Indeed, even in the burst of the dot-com bubble in the late 1990’s, IT salaries were higher than they are now.

Companies Cutting Costs and Shedding Jobs

A government report issued Friday announced that the U.S. economy lost 533,000 jobs in November, bringing this year’s total to 1.9 million jobs lost. This was the worst monthly job loss since December 1974. Continue reading “Companies Cutting Costs and Shedding Jobs”