Layoff tide spreads across US economy
Layoffs that first were concentrated in the auto and construction industries now are spreading through the economy. When the nation's unemployment rate went up sharply again in May, to 7.8 percent of the work force, major job losses were reported in rubber, glass, steel, electrical manufacturing, wood, paint, furniture, carpet, cement, and other industries, broadening the heavy impact of layoffs.
The end is not in sight. The unemployment situation is generally expected to get worse through the summer months.
Since the US Labor Department's Bureau of Labor Statistics counted 8,154,000 jobless in May, up 889,000 from the previous month, business news reports from across the country tell of further plant closings and layoffs, with unofficial figures for June already up into the hundreds of thousands.
Within the past week, the United States Steel Corporation announced that it was shutting down a major part of a Fairfield, Ala., plant because of a severe decline in steel orders. That will add 3,000 workers to the 2,000 already idle there. The steelmaker also reported layoffs of 1,700 open-hearth workers in Fairless Hills, Penn.
The Kelly-Springfield Tire Company, a subsidiary of Goodyear Tire & Rubber Company, announced the closing of plants in Maryland, Texas, North Carolina, and Illinois during June, idling 5,400 workers. In a single recent day, Dana Corporation announced that it was closing a Wisconsin axle plant that employs 300; Sheller-Globe Corporation said it will shut down operations at a Niles, Mich., auto parts plant, idling 165, and Deere & Co. of Moline, Ill., announced further layoffs at an Iowa plant that would bring the number idled there to 4, 000.
Meanwhile, the big-three auto manufacturers announced that 34,965 more workers would be laid off at assembly plants this week. General Electric announced that 400 salaried workers at its household appliance plant in Louisville have been laid off indefinitely and 3,700 production workers face layoffs in July.
So far the unemployment impact has been heaviest in the Mid-Atlantic states and the Midwest because of the concentration of industrial operations and in many instances the marginal nature of old plants in the regions. But layoffs are beginning to rise sharply in the South, and many industrial cities such as Birmingham, Ala., have been hard hit by plant layoffs.
Tourism and service trades -- including retail stores -- are beginning to feel te impact of inflated costs and squeezed incomes. Layoffs are beginning.
The Carter administration has conceded that unemployment is rising at a much higher rate than anticipated earlier this year. Many economists in and out of the government expect the rate to climb to 9 percent by the end of the year. Some forecasts are for 10 percent or higher. Each percentage point in the jobless rate represents roughly 1 million unemployed workers.
Organized labor questions the accuracy of the government count, contending that it does not inclue "discouraged" workers who are idle and would like jobs but are not actively seeking work because they have lost hope of finding suitable jobs. In the first quarter of this year, an estimated 1 million were in this category. Now labor economists say there are "substantially more" who should be counted as unemployed but are not.
The unemployment issue is a major political problem for President Carter. The crucial support he needs from unions if he is to win re-election could depend on the effectiveness of intensive administration efforts his summer to put the job-less back to work.
Although government spokesmen continue to say no major shift of economic policy is contemplated, President Carter said in Seattle that he would act if the rate continues to soar. White House aides are considering tax cuts and additional spending this year to stimulate employment.