US employers lay off thousands of workers as crisis deepens

Lisbeth Latham

According to figures released by the Bureau of Labor on January 9, US employment in non-farm private sector employment plummeted by 524,000 during December as companies moved to cut costs in response to the slow-down in the global economy. The decline has occurred across almost all sectors of the US economy, reflecting the depth and breadth of the current economic crisis.


The job losses take the total reduction in employment to 2.6 million for 2008, the worst decline since 1945. The last four months of 2008 saw employment decline 1.9 million. The worst-affected sectors were manufacturing and construction, which shed 149,000 and 101,000 jobs respectively. During 2008 employment in manufacturing declined by 791,000 while in construction it dropped by 666,000. Employment in retail declined 67,000 in December and 522,000 for the year, while total employment in wholesale fell by 30,000 for the month for a total decline of 164,000 in 2008.

The only sectors to experience an expansion in employment were education and healthcare. Employment in healthcare and education grew by a total of 377,000 for the year and increased by 45,000 in December.

The decline in employment has resulted in the growth in the number of unemployed growing to 11,108,000, or 7.2 per cent of the work force, the highest figure since January 1993, up from 4.9 percent at the beginning of 2008. Unemployment is highest amongst African Americans (11.9 per cent) and Hispanic Americans (11.9 per cent) compared with 6.6 per cent for “whites”. The unemployment rate among teenagers is 20.8 per cent.

In December, there were 8 million workers classified as working in part-time employment for economic reasons, i.e. workers who are working part-time due to an enforced reduction in work hours or as they are unable to find full-time work, an increase of 3.2 million for the year.

Adding to the picture of reduced demand resulting in falling output is the decline in the hours worked. The average work week for production and non-supervisory workers fell by 0.2 hours to 33.3 hours the lowest figure since 1964. The average work week in manufacturing declined by 0.4 hours to 39.9 hours in December, while the average amount of overtime worked declined by 0.3 hours to 3.0 hours per week.

The continued expansion in job losses reflects the global economic crisis is continuing to deepen and has the potential to accelerate and build momentum.