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Unemployment hits 20 year high for area

Unemployment in Archuleta County hit its highest level in over two decades this past March, hitting 10.9 percent, according to a report released last week by the Bureau of Labor Statistics.

The last highest unemployment number was 12.1 percent in March, 1989. Historically (since 1976, when the BLS began compiling reliable unemployment statistics for Archuleta County) the area’s worst unemployment occurred during the first half of 1978 (January through June) when Archuleta County suffered an average 26.7 percent average unemployment rate, with May 1978 holding the record for unemployment in the region with a rate of 30.9 percent.

While the BLS lists the March 2010 rate as preliminary (standard for initial reporting), in every instance over the past year the BLS has either revised those figures upwards or held them consistent with the initial report. For instance, the February 2010 figure stands at 10.6 percent, the same as the preliminary report, while the January 2010 report was revised a tenth of a percentage point, from the 10.2 percent preliminary number to 10.3 percent, as was finally reported.

Traditionally, February and March are the months showing the highest numbers of unemployed in Archuleta County, while December, January and April tend to also show high numbers, (the trend showing an exception in 1978).

What is telling about 1978 is the size of the civilian labor force (CLF) in Archuleta County at that time. By May 1978, the CLF in the county had increased 54 percent from January 1976, indicating a population boom in the area.

Simply stated, the CLF is the sum of the numbers of employed and unemployed.

In January 1976, Archuleta County’s CLF was 1,048 and by May 1978 had climbed to 1,619. Not surprisingly, the CLF had dropped to 1,303 by March 1979 as workers apparently fled the county seeking other work.

In fact, historically, Archuleta County has shown numerous boom and bust cycles, with decreases in the CLF size following high unemployment rates and, conversely, an increase in CLF numbers following sustained low unemployment numbers.

However, last year defies previous trends as CLF numbers increased following high unemployment and vice-versa. For instance, during March of last year, the highest unemployment rate of 2009 (9.4 percent) saw a CLF of 6,105 in the county, followed by an almost 10-percent increase in the CLF through July of last year — and a drop in unemployment by 1.6 percent. And while the CLF decreased briefly after the unemployment rate climbed again last November, those CLF numbers showed a steady increase in the months from December through March.

While it stands to reason that an increase in population (as implied in the CLF) would skew unemployment rates higher — more people relative to fewer jobs available — the increase in the CLF over the past few months contradicts the usual trend shown during the past 34 years.

Quite possibly, the trend from the past year could reflect the extension of unemployment benefits. Last year, Congress passed two extensions for unemployment benefits, with another extension passed last month. Traditionally, unemployment benefits stopped after six months (26 weeks); the last extension passed by congress allows the unemployed to collect benefits for up to 99 weeks.

Nationally, the average unemployment check amounts to 36 percent of wages earned. While surviving on about two-thirds of their prior wages, the unemployed in Archuleta County may feel secure enough with current benefits to weather the storm.

However, June could indicate a drop in the local CLF if the unemployed with school-age children leave the county after the end of the school year.

Nationally, the unemployment rate held steady at 9.7 percent, with most analysts predicting that number will drop slightly in the latter half of this year. Unfortunately, most analysts also agree that unemployment will remain above 8 percent through 2012.

Worse news is that just one in five people who were out of work last summer have found a job since then. A Rutgers University report released earlier this week indicated that only 21 percent of job seekers unemployed since last July had landed a job by March of this year.

Last month, the national U-6 number (total unemployed plus those who have either given up looking for work or have dropped off unemployment benefit rolls, plus workers with part-time employment but desire full-time employment) climbed to 16.9 percent, a tenth of a percentage point from the previous month.

U-6 numbers are not reported at the county level, so it is impossible to determine the full unemployment situation in Archuleta County.

With “full employment” defined as an unemployment rate of about 4 percent, the U.S. would need to create over 11 million jobs in the next month to achieve that level of employment. By the same token, Archuleta County would need to see the creation of over 400 jobs to claim full employment.

With new construction at a veritable standstill and few prospects for new industry in the area, Archuleta County could remain in double-digit unemployment for quite some time, with only an exodus of population from the area ameliorating the unemployment situation. Unfortunately, a reduced population count and, subsequently, lower unemployment numbers, are hardly an indication of a robust local economy.

jim@pagosasun.com