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Government cuts again drive unemployment numbers

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Illinois

* Continuing government budget cuts are still pushing the unemployment rate up…

Illinois’ jobless rate rose to 8.9 percent in July as the government and leisure and hospitality sectors combined to shed more than 12,000 jobs.

The July rate was up from 8.7 percent in June, but down sharply from 10.1 percent in July 2011, the Illinois Department of Employment Security said Thursday. It marked the second consecutive month that the rate has increased. […]

Over the month, the state lost a net of 7,100 jobs. The largest cuts came from governments, 7,900 jobs; and leisure and hospitality, 4,300 positions.

Those losses were partially offset by gains in trade, transportation and utilities, which added 3,000 positions; professional and business services, 2,800 jobs; and manufacturing, 1,700 jobs.

The drought may be impacting some of the unemployment numbers, according to the AP.

* Government also leads the year over year numbers…

The biggest job losses year-over-year in July were in government, down 15,400; and construction and other services, both down 9,800.

The biggest gains were in professional and business services, up 28,600; manufacturing, up 22,400 and leisure and hospitality, up 11,400.

* Underemployment is a huge problem…

Although the state’s unemployment rate has been below 10 percent since October, its so-called underemployment rate has been in the double digits for nearly four years. That rate was 16.5 percent in the second quarter of this year, which is an average of the four most recent quarters of data. It was as high as 18 percent in mid-2010.

According to the U.S. Bureau of Labor Statistics, the federal office that oversees the collection and computation of the country’s labor force data, the official unemployment rate captures only those people who are out of work and have looked for a job in the last month. The underemployment rate, on the other hand, captures those people plus those who are working part-time but desire full-time work as well as those who want a job but have not looked in the last month because they are discouraged over their job prospects.

The broader measure, sometimes called the “true” unemployment rate by critics of the government’s more narrow definition, provides a better sense of what improvements still need to be made in the job market, said John Lewis, formerly an economist with Northern Illinois University who now owns a consulting firm in Sycamore.

* And suburban foreclosures are still a big issue…

In June, one of every 155 housing units in Kane County and one of every 254 housing units in DuPage County received a foreclosure filing, according to realtytrac.com. That’s higher than neighboring Cook County, where the rate was 1 in 277; the state of Illinois, where 1 in 355 units was foreclosed; or the entire country’s rate of 1 in 666.

DuPage is the state’s wealthiest county with a median household income of $76,581, according to the most recent U.S. Census. That’s more than $20,000 above the median household income in either Cook County or Illinois, and nearly $25,000 more than the median household income in the U.S. […]

Olson said DuPage County has kept a higher foreclosure rate as people lost jobs, lived off their savings and are now running out of money and going into foreclosure because they can’t find new employment.

Mary Keating, director of community services for DuPage County, also said the problem was related to employment — or lack thereof.

“Ultimately, a lot of the foreclosures are really about job loss.” she said.

Olson’s experience with the DuPage Homeownership Center supports Keating’s claim. She said 65 percent of loan modifications and re-defaults on mortgages the center has seen are due to unemployment or underemployment.

Discuss.

posted by Rich Miller
Friday, Aug 17, 12 @ 9:53 am

Comments

I hope more reporters take note of these statistics as “pro-growth” Republicans continue to push to slash education, health care, and care for the elderly and disabled as a way to “grow” our economy.

Its not only socially unsustainable in the long run, but has short-term economic consequences as well.

Comment by Yellow Dog Democrat Friday, Aug 17, 12 @ 10:06 am
YDD- I think one of the biggest slashers of social programs appears to be Pat Quinn. I know he acts like a Republican but I think he is supposed to be a Democrat.

Comment by Irish Friday, Aug 17, 12 @ 10:24 am
YDD - Pretty sure Democrats are running the show here.

Comment by anon Friday, Aug 17, 12 @ 10:28 am
I like that term YDD - “Socially Unsustainable”. I’m going to use it in reference to the pension laws as both “Legally Unsustainable” and “Morally Unsustainable”, but morally bankrupt works too.

Comment by PublicServant Friday, Aug 17, 12 @ 10:37 am
Yet incumbents get returned year after year at what? 90% plus rates?

Comment by titan Friday, Aug 17, 12 @ 10:40 am
Many Cities and school districts just started their 2012-2013 budget year effective 07.01.2012, so yes, we’re certainly seeing government employment reductions in the numbers.

From a budget planning standpoint, these tax districts are making the smart moves. The schools are uncertain about state funding continuing at the same levels, not to mention the possibilities of retiree pension funding shift.

They hear the words “phase in”, and see the Governor’s reassurances on the retiree pension shift amounts to be affected, and they are anything but reassured.

So, for the schools at least, you plan on ‘worst case’ and go from there.

Most other tax districts run November 30 - December 1 budget cycles, which they are into right now. When most of these tax districts are looking at a 0.5% to maybe at best a 2.5% increase (a few places) in overall revenue stream, and with pre-programmed expenses increasing in the 4.0%+ range from just the initial budget workups, well, there’s going to have to be cutbacks. If you are a department head and had a $5 mil budget last year, if you are lucky, you are being told you get $5 mil this year (period!), and next year, it’s going to be less.

And in most local governments, that means cuts to “People”.

Comment by Judgment Day Friday, Aug 17, 12 @ 10:51 am
Btw, just noticed that there are going to be way too many tax districts which are actually going to see a likely negative impact on this year’s overall revenue stream. Just going to make things worse.

Comment by Judgment Day Friday, Aug 17, 12 @ 11:00 am
Maybe if we had fewer taxing districts we could mitigate some of these phased-in costs…

Comment by soccermom Friday, Aug 17, 12 @ 11:07 am
@ titan - Yet incumbents get returned year after year at what? 90% plus rates?-

Answer to both = A gerry-mandered two-party system.

Comment by Crime Fighter Friday, Aug 17, 12 @ 11:09 am
With school districts I would think some of the reductions would be due to declining enrollment. Let’s face it, some of the DuPage county suburbs almost exist to have good school systems, which during normal years draw in new home owners when their children are ready for school. If the real estate mess means that people feel locked into their existing homes and/or not having the resuorces to buy a new place, that may mean not moving to the burbs for the schools.

Comment by cermak_rd Friday, Aug 17, 12 @ 11:12 am
At least one of the Mitt Romney’s understands the consequences of massive government cuts in a weak economy.

From “Time.”

“Romney: Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%. That is by definition throwing us into recession or depression. So I’m not going to do that, of course. What you do is you make adjustments on a basis that show, in the first year, actions that over time get you to a balanced budget. So I’m not saying I’m going to come up with ideas five or ten years from now that get us to a balanced budget. Instead I’m going to take action immediately by eliminating programs like Obamacare, which become more and more expensive down the road – by eliminating them, we get to a balanced budget. And I’d do it in a way that does not have a huge reduction in the first year, but instead has an increasing reduction as time goes on, and given the growth of the economy, you don’t have a reduction in the overall scale of the GDP. I don’t want to have us go into a recession in order to balance the budget. I’d like to have us have high rates of growth at the same time we bring down federal spending, on, if you will, a ramp that’s affordable, but that does not cause us to enter into a economic decline.”

Read more: http://thepage.time.com/2012/05/23/the-complete-romney-interview-transcript/#ixzz23oyX5n4B

Comment by wordslinger Friday, Aug 17, 12 @ 11:23 am
Locally and nationally, private sector jobs are growing, while government jobs are shrinking.

Yet the GOP insists we are going in the “wrong direction”. If they had a Republican in the White House with exactly the same numbers, they would be touting “mission accomplished”.

Comment by walkinfool Friday, Aug 17, 12 @ 11:28 am
I wonder how much of the drop in government employment is the result of employees retiring in June and not yet replaced, rather than to any actual decrease in jobs.

Comment by Anonymice Friday, Aug 17, 12 @ 11:34 am
For lack of a better title, the loss of so many government jobs is the silent recession.

The CBO and economists from top schools agree that the 2009 federal stimulus helped. Jobs legislation based on the Buffet tax went nowhere last year. Romney came out against hiring more public employees when he made the statement that we don’t need more of them.

Comment by Grandson of Man Friday, Aug 17, 12 @ 12:46 pm
@Irish & Anon -

Republicans refused to put a single vote on a temporary tax increase. They wanted to cut funding for education, health care and human services AN ADDITIONAL SEVEN BILLION.

If you are against new revenue AND against cutting pensions, you are FOR cutting education, health care and human services.

The laws of mathematics are unavoidable.

Comment by Yellow Dog Democrat Friday, Aug 17, 12 @ 3:25 pm
BTW, I’m tired of the Republicans complaining that they are in the minority so they have zero responsibility.

I used to think this Victim Mentality was a convenient act…then Cross remarked yesterday that he wasn’t sure what time his meeting with the Governor was and would have to call the Speaker’s Office to find out.

What?! You’ve got a meeting with the Governor to try to hammer out a deal to reform pensions, and you don’t know when it is? This meeting you’ve been clamoring about…isn’t burned into your brain? And you can’t even call your own secretary to check your schedule? Next we’ll probably learn that Steve Brown is writing all of Cross’s speeches.

Look, if the Republicans want to claim they are absolutely powerless and have zero responsibility…fine. But stop cashing your paychecks and stop collecting your per diem. Clearly, you don’t think you are doing anything to earn them.

Comment by Yellow Dog Democrat Friday, Aug 17, 12 @ 3:47 pm
The local government budget ‘cuts’ (such as they are) are a direct result of a simple set of facts:
1) Revenue increases are going to be far and few between. That area has already been thoroughly explored these last few years. So, plan on at best 1.5% to 2% increases in revenues per year, but revenue decreases are more likely.
2) Expenses (staffing, bennies, program expenses, etc.) are in most cases, increasing at a rate far exceeding revenue availability.
3) Many local governments went on expansionary programs and basically built both administrative and service structures designed to ‘fight the last war’. Those days are long gone, and unlikely to re-appear anytime soon. It’s sort of like having NATO exist in 2012.
4) For all sorts of various reasons (some good, some bad) most of these local government structures were built out where flexibility was an afterthought, if even considered. Consequently, there is no easy way to adjust staffing or even programs for current (and ongoing) economic conditions.

Nobody wants to hear it, but when you have departments where staffing is still at 80%+ of levels back in 2007, while current workload is at 20-30% max. of 2007 levels, then you have got issues. And that’s a situation still occurring for at least 3, going on 4 budget cycles.

Public sector budgeting, welcome to the private sector’s reality. And we all know what has happened in the private sector.

Comment by Judgment Day Friday, Aug 17, 12 @ 4:15 pm
Ya see YDD, that’s the dilemma with middle class public sector employees, democrats are abandoning them for the entitlement folks. That’s why the middle class has no real choice in this election, and is represented by no one. Yet, where do we turn? Primarying democrats is our only alternative because the republicans are death to anyone but the rich.

Comment by PublicServant Friday, Aug 17, 12 @ 7:02 pm
–Ya see YDD, that’s the dilemma with middle class public sector employees, democrats are abandoning them for the entitlement folks.–

Do the “entitlement folks” give you a working majority. You sure none of this have to do with past mistakes coupled with the longest, worst global economy since the Depression?

Comment by wordslinger Friday, Aug 17, 12 @ 7:25 pm