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DanS:Layoffs, Let the Bad Times Roll
Hurricanes Cause Spike in Large Layoffs
By ADAM GELLER, AP Business WriterTue Oct 25, 4:23 PM ET
Hurricanes Katrina and Rita triggered a surge in layoffs in September, with large-scale job cuts jumping to their highest level in nearly four years.
Employers announced 2,069 mass layoffs last month, an increase of more than 80 percent from August, the federal Bureau of Labor Statistics said Tuesday.
That is the largest number of mass layoffs — job cuts involving at least 50 workers — since November 2001.
The increase was concentrated in southern states — particularly Louisiana and Mississippi — where mass layoffs reached their highest level since the government began tracking them a decade ago.
Underscoring the job loss from Katrina, Louisiana officials said Tuesday that state's unemployment rate spiked to 11.5 percent in September, up from 5.8 percent in the previous month, the highest it has been since the 1980s.
About one in five of the mass layoffs came in manufacturing, lower than in the past. But substantial portions of the job cuts came at restaurants, hotels, casinos and other hospitality businesses that are an underpinning of the Gulf Coast economy. Employers in ship building, hospitals and schools also sent large numbers of workers home after the storms forced them to close or scale back.
The increase in layoffs offer further evidence of the substantial job loss caused by the storms, illustrated by previous reports showing sharply higher numbers of people applying for unemployment benefits during September.
The number of people applying for such benefits for the first time has been easing. But it may take a while before the full accounting of job loss caused by the hurricanes is clear, particularly as employers who kept people on payrolls in the weeks immediately after Katrina cut them off, analysts said.
"It could mean that those people don't show up in the jobless numbers until relatively late, so it's an evolving situations in terms of understanding the impact on the labor market," said Patrick Fearon, senior economist with A.G. Edwards & Sons in St. Louis.
Layoffs can be temporary. But the scope of the job cuts and extent of the damage in the hurricane region suggest that these layoffs may not be as short-lived as past reductions, said Dean Baker, co-director of the Center for Economic and Policy Research, a think tank that tracks employment.
"In terms of people's lives, let's say someone had a reasonably good job in the tourism industry, they're not going to wait around a year and half or two years for their job to come back," Baker said. "What's there when it (the Gulf economy) comes back might be qualitatively different than what it was before."
Baker said the layoff figures might be understating job loss because they only track employers with at least 50 workers. That misses the many smaller employers that account for a growing share of the job market, he said.
Large-scale layoffs in September affected 257,544 workers, with just over half of those in the South. In that region, about 80 percent of the layoffs and the workers affected were in Louisiana and Mississippi.
By ADAM GELLER, AP Business WriterTue Oct 25, 4:23 PM ET
Hurricanes Katrina and Rita triggered a surge in layoffs in September, with large-scale job cuts jumping to their highest level in nearly four years.
Employers announced 2,069 mass layoffs last month, an increase of more than 80 percent from August, the federal Bureau of Labor Statistics said Tuesday.
That is the largest number of mass layoffs — job cuts involving at least 50 workers — since November 2001.
The increase was concentrated in southern states — particularly Louisiana and Mississippi — where mass layoffs reached their highest level since the government began tracking them a decade ago.
Underscoring the job loss from Katrina, Louisiana officials said Tuesday that state's unemployment rate spiked to 11.5 percent in September, up from 5.8 percent in the previous month, the highest it has been since the 1980s.
About one in five of the mass layoffs came in manufacturing, lower than in the past. But substantial portions of the job cuts came at restaurants, hotels, casinos and other hospitality businesses that are an underpinning of the Gulf Coast economy. Employers in ship building, hospitals and schools also sent large numbers of workers home after the storms forced them to close or scale back.
The increase in layoffs offer further evidence of the substantial job loss caused by the storms, illustrated by previous reports showing sharply higher numbers of people applying for unemployment benefits during September.
The number of people applying for such benefits for the first time has been easing. But it may take a while before the full accounting of job loss caused by the hurricanes is clear, particularly as employers who kept people on payrolls in the weeks immediately after Katrina cut them off, analysts said.
"It could mean that those people don't show up in the jobless numbers until relatively late, so it's an evolving situations in terms of understanding the impact on the labor market," said Patrick Fearon, senior economist with A.G. Edwards & Sons in St. Louis.
Layoffs can be temporary. But the scope of the job cuts and extent of the damage in the hurricane region suggest that these layoffs may not be as short-lived as past reductions, said Dean Baker, co-director of the Center for Economic and Policy Research, a think tank that tracks employment.
"In terms of people's lives, let's say someone had a reasonably good job in the tourism industry, they're not going to wait around a year and half or two years for their job to come back," Baker said. "What's there when it (the Gulf economy) comes back might be qualitatively different than what it was before."
Baker said the layoff figures might be understating job loss because they only track employers with at least 50 workers. That misses the many smaller employers that account for a growing share of the job market, he said.
Large-scale layoffs in September affected 257,544 workers, with just over half of those in the South. In that region, about 80 percent of the layoffs and the workers affected were in Louisiana and Mississippi.
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