Economist: Rising unemployment could continue until summer

by John Paul (jpaul@wsbt.com)

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Unemployed at WorkOne

Some of the area's unemployed wait outside South Bend's WorkOne Center on Monday, November 24, 2008. (Tribune Photo)

By WSBT News1

Story Created: Jan 27, 2009 at 5:10 PM EST

Story Updated: Feb 1, 2009 at 12:38 PM EST

ST. JOSEPH CO. — Of the top 10 counties in Indiana with the highest unemployment rate, seven are in Northern Indiana. Economists say we'll hear more about the increasing unemployment rates over the next few months as companies stop waiting to let people go when sales numbers don't add up.

An increase in unemployment means more foot traffic through the doors of WorkOne offices throughout Northern Indiana.

Terry Love's footsteps are among them.

"The lady just told me that it could be 8 weeks before they cleared it up and 8 weeks before I get paid," he said.

William Cassell, who has been laid off since June, is out there too. "I'm getting to old to go out and get a high dollar paying job," he said. "I'm 57 years old."

The nation has recorded the highest unemployment rate in 16 years, and the Indiana Department of Workforce Development said there were a number of gains in several Northern Indiana counties.

A heavy manufacturing base and ties to the automotive industry are not the only sectors that led to December's increase.

"Indiana is a large exporting state," said Jerome McElroy, Economics Professor at Saint Mary's College. "If markets overseas are weak, that is affecting us."

"There is a very complicated federal formula with their methodology; but the unemployment rate includes all able and available Hoosiers who are in the workforce looking for employment," explained Marc Lotter, Media Spokesperson for Indiana's Department of Workforce Development.

"I'm really concerned with the people coming up behind me," said Cassell. "Are there going to be jobs for those guys?"

McElroy believes job loss is something well hear a lot more of.

"It's a serious, serious crisis," he said. "I don't think there's an easy way out."

Cuts around the nation could continue for another six months, according to McElroy.

"What we are seeing now, companies are shedding workers faster than in previous recessions," he said.

And, right here in Indiana. "It is a lot of bad news at once," he added.

McElroy says many economists predict we'll see some relief by summer. He says it's extremely rare for a recession to last for two years.

The United States has been in a recession since December 2007, and McElroy adds, it takes 3 years in a recession to get to a depression.

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