Unemployment: Is there an 8 Percent Solution?
March 11, 2009
Isaac Cohen for HispanicBusiness.com
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Unemployment in the United States has crossed the barrier of 8 percent. According to the Labor Department, in February, 651,000 jobs were lost, which pushed the unemployment rate to 8.1 percent, from 7.6 percent in January. This is the highest unemployment rate in 26 years. The recession is already 15 months old and it is projected to last until the end of the year, becoming what may be the longest economic downturn since the Great Depression.
President Obama has said that the government's short-term objective is to stop unemployment from climbing into double digits. For this purpose, the government is using a four pronged approach, which started with the approval by Congress of the $787 billion reactivation plan. Additionally, to strengthen the housing market, there is a program to stop foreclosures and another program to support the automobile industry. Last, there is the rescue of the big banks, to reactivate credit. To those who complain about the magnitude of the government intervention, the President has said that "the cost of inaction will be greater."
There is also a sense of urgency, because the economy is shedding jobs at a very fast pace. Since the onset of the recession, in December 2007, 4.4 million jobs have been lost, but about half of these jobs were lost in the last three months. Almost every sector, such as manufacturing and construction, financial services, retail, restaurants and hotels, is losing jobs. Only health services and government exhibited slight increases.
Isaac Cohen is the former director of the Washington Office of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). He is a commentator on economic and financial issues for CNN en Espanol TV and radio.
Source: HispanicBusiness.com (c) 2009. All rights reserved.
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