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INDIVIDUALS WITH LESS EDUCATION BEAR BRUNT OF JOB LOSSES: As Unemployment Rate Hits 8.1 Percent, Individuals Seek to Upgrade Their Education

“The brunt of the layoffs in this recession is falling on construction workers, hotel workers, retail workers and others without a four-year degree.”

Last month, the number of unemployed individuals increased by 851,000 to 12.5 million and the unemployment rate rose to 8.1 percent, according to the latest data from the Bureau of Labor Statistics.1 Since the recession began in December 2007, about 4.4 million jobs have been lost, with more than half (2.6 million) coming in the last four months. Today, the unemployment rate is the highest it has been since December 1983.

However, according to David Leonhardt, an economy and business writer at the New York Times, this recession, unlike the last two, is causing more job loss among the less educated than among college graduates. “Those earlier recessions introduced the country to the concept of mass white-collar layoffs,” he writes in a March 3 article. “The brunt of the layoffs in this recession is falling on construction workers, hotel workers, retail workers and others without a four-year degree.”

Indeed, as shown in the graph below, the unemployment rate for individuals of all education levels has skyrocketed since December 2007, but high school dropouts, with an unemployment rate of 12.6 percent, have faced the most difficulty finding a job.

individuals with lessSource: Bureau of Labor Statistics

Under the recently enacted American Recovery and Reinvestment Plan, unemployment benefits were increased by $25 a week and extended by thirty-three weeks in states with high unemployment rates and twenty weeks everywhere else (Prior to the change, laid-off workers could collect unemployment benefits for 26 weeks). However, many of the newly unemployed are finding that they lack the necessary education for the available jobs in their area. A recent Associated Press article spotlights Donna Sharp of Elkhart, Indiana, the town where President Obama held a town hall meeting on February 9 to discuss the economic recovery plan.

“Donna Sharp made a good living even without a high school diploma, earning about $19 an hour putting stripes on recreational vehicles,” the article reads. “Then Monaco Coach Corp. announced in July that it was closing the Wakarusa plant where Sharp worked, as well as plants in Elkhart and Nappanee in September. Other RV companies were doing the same, contributing to an estimated 8,000 job cuts that have caused Elkhart County’s unemployment rate to triple in a year to 15.3 percent.”

Like many high school dropouts who found themselves without a job, Sharp decided to earn her GED, but unlike many others, she was actually able to enroll in class. In Elkhart and nationwide, GED programs are filling up rapidly and many communities have had to implement waiting lists. “We’ve never had waiting lists like this, ever,” said Deborah Weaver, director of community education for Elkhart Community Schools. In New York City, the Fifth Avenue Committee, which runs a GED class for twenty-two students, has a waiting list of 178. In California, the number of people taking the GED has increased from 46,184 in 2005 to 59,416 in December 2008—and that was before the crush of job losses over the last three months.

In a statement on the February jobs report, U.S. Secretary of Labor Hilda Solis said that the Labor Department was making more than $3.5 billion available to states for education, training, and reemployment services. “We will continue to do whatever is necessary to break the destructive cycle of job loss in this country and put Americans back to work,” she said. “That includes our plans to re-start lending for consumers and small businesses, help responsible homeowners pay their mortgages and re-finance their homes, and address the long-term economic challenges we face—including the high cost of health care, our dependence on oil, and the state of our schools.”

Geography of a Recession

Access an interactive graphic on theNew York Times website that shows the unemployment rates for every county in the United States by clicking on the map below.




One person who is taking advantage of a Department of Labor retraining program is Chad Smith, who is profiled in an article in the Wall Street Journal. Smith, a high school graduate who was laid off from his night-shift job at a Chrysler assembly plan in May 2008, considered going to college after high school, but that was before he landed a series of well-paying construction and auto-industry jobs. “When you’re making $55,000 at 18 years old, it’s hard to tell yourself to go to school,” he says. “You’ve got the world by the tail.” Today, he is studying software development and computer networking at Rock Valley College in Rockford, Illinois.

“Mr. Smith’s career journey shows how both the recession and longer-term structural changes in the economy are hemming the choices of U.S. workers today—particularly in old-line manufacturing towns in the Midwest,” the article reads. “When the auto and machine-tool industries prospered here, workers had little incentive to get college diplomas. But as manufacturing eroded, blue-collar towns like Rockford were hit harder than more diversified local economies.”

Smith is among the first men in his family of primarily blue-collar workers to go to college, but he hopes that he will blaze a new trail that his children will follow. “I have to set that example,” he says. “I love school, because I’ve seen the other side. This is the most important way to make a better life for my family.”

1) The unemployment rate reflects the percent of individuals who are available to work and currently seeking work. It does not include people who say they would like to work full-time, but can only find part-time jobs. Nor does it include individuals who would like to work but are not actively seeking a job.

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