Unemployment Rises to 9.8 Percent

Job creation sputters; older workers feeling the pain

by: Carole Fleck, from: AARP Bulletin, December 3, 2010

In a disappointing setback for the labor market, U.S. employers added a mere 39,000 jobs to their payrolls in November, the government said Friday. For the first time in four months, the unemployment rate rose, to 9.8 percent from 9.6 percent.

Economists had expected the workforce to show signs of improvement last month. Instead, payroll growth, which had averaged 86,000 jobs per month since last December, slowed to less than half that number, the Bureau of Labor Statistics (BLS) reported.

The landscape darkened considerably for workers ages 45 to 54, with unemployment jumping from 7.8 percent in October to 8.1 percent in November. In that group, men faced an even bigger increase from 8.5 to 9.1 percent. For women, the rate remained at 7 percent.

The outlook was a bit brighter for men age 55 and older. The jobless rate fell to 8.1 percent in November from 8.3 percent the month before. But older women faced worsening numbers, a rise to 6.2 percent from 5.9 percent in October.

Longer search for older workers

Sara Rix, a strategic policy adviser at AARP, says workers 55 and older are still taking longer than younger people to find a job. The average duration of unemployment as of November rose slightly to 44.9 weeks from 44.3 weeks as of October. For younger workers it fell to 32.8 weeks from 33.2 weeks.

Overall, more than 15 million people were unemployed in November, the BLS reported. Among those 55 and up, more than one in two (58 percent) had been out of work for six months or more; among younger workers, it was about two in five (42 percent).

Marc Varner, 55, of Gainesville, Fla., worked in construction until a car accident sidelined him several years ago. He's been applying for administrative jobs, but in a state that has one of the highest jobless rates in the nation, he has not been successful.

"So many people are unemployed. I'm faced with a lot more competition breaking back into the job market," he says. "Having a college degree doesn't mean as much."

A separate measure of unemployment, which includes "discouraged workers" who have given up looking for jobs (1.3 million), and people working part-time largely because they couldn't find full-time work (9 million), held steady at 17 percent. Many economists feel this number gives a more thorough picture of unemployment.

As more job seekers enter the labor force — including first-time teenage workers, retirees trying to rejoin the labor force, and unemployed workers who were on the sidelines and now starting to look actively again — the unemployment rate will continue to rise if hiring levels remains weak.

Heidi Shierholz, a labor market economist at the Economic Policy Institute in Washington, says the labor market needs to generate about 300,000 additional jobs each month to make a difference in the jobless rate. The economic landscape varies in communities around the country. To see the jobless situation by state, go to AARP's interactive "pain index."