Mounting Layoffs: Why They're Different This Time

[marmar]

CNBC, via Yahoo!:



CNBC
Mounting Layoffs: Why They're Different This Time
Friday October 24, 11:31 am ET


Thousands are losing their jobs at Merck. Thousands more are being cut at Xerox, Yahoo, Chrysler and General Motors.

Those companies were in the news just this week, and they weren't alone. Corporate America is now following the lead of Wall Street, where tens of thousands have lost jobs, many of which will never return. The question, though, is this: As the layoffs add up, how bad will unemployment be in this recession? And what does that mean in terms of when and how the economy will recover?

It really is a different job market this time, and that might be a slight positive for workers, economists say. For one, there was no big ramp-up of new employees ahead of this economic downturn. But there are plenty of other factors that make this job environment more worrisome. One of those issues is the fact that there's no turnaround in sight for housing, which can only aggravate job losses.

"You have a very broad-based decline in payrolls. The only good thing is that businesses did not seem to have aggressively hired during the boom. It never got to the point where there was hiring in advance or panic hiring," said Mark Zandi, chief economist at Moody's economy.com. That contrasts to the period prior to the dot-com bust, when companies were luring workers to internet companies with signing bonuses.

"The other unique feature of this is how broad-based these job cuts are. In other times, they were focused in a region or two," he said. "By our calculation, there are 27 states in recession. Fifteen are close. It's a much broader downturn than has been the case historically. That's an issue to how these economies can adjust to all of these shocks."

Typically, people have picked up and moved to another part of the country when times have gotten tough. Not this time, Zandi said. "There's really no place to go. The only big economy that's doing well is Texas. Of course, the fact that so many homeowners are underwater cuts down mobility," he said. He said the phenomena could prolong the recession. .......(more)

The complete piece is at: http://biz.yahoo.com/cnbc/081024/27345291.html?.v=2

[AlinPA]

1. ''These jobs are goin' boys and they ain't comin' back"... My hometown...

[OhioChick]

2. You're right.

These jobs aren't coming back....unless we close all the tax loopholes, tax penalties, etc. The future doesn't look pretty, to put it mildly.

[northernlights]

3. why is it a good thing

that companies didn't hire "aggressively" during the boom? Huh?

If they had hired, many of those of us who were dumped back in '01 and '02 might have made it back into the workforce, instead of being forced to live off our retirement savings, only to start going broke at the beginning of the next downturn.

[FarCenter]

4. The economy has shifted heavily to services -- hard to restart

Agriculture and manufacturing are now very small parts of the US economy compared with 1929.

Once the service economy slows, it will be very hard to regain momentum. Lots of demand will be permanently destroyed.

[Donnachaidh]

5. is there a list somewhere of the 27 states in recession? n/t