Unemployment in Delaware Will Climb Higher
Governor Jack Markell cites rising unemployment as one of the factors driving the state's budget crisis. According to the Delaware Department of Labor, 27,665 Delawareans were unemployed in December:
Based on what I have learned about the methodology used to calculate unemployment, I expect that the rate will climb significantly in the next several months.
Anyone who drew even one paycheck would not show up in the unemployment report for the month. Even severance pay counts, since workers don't qualify for unemployment insurance until their severance checks run out.
Invista, Chrysler and Circuit City have announced layoffs that did not take effect in December. It could take months for all of their workers to qualify for unemployment benefits. The growing lines of workers applying for benefits will inexorably drive the unemployment number higher.
But it won't end there. Bank of America plans to eliminate 30,000 jobs over the next three years. I expect to see some of those job cuts to affect Delaware.
All of these job losses are driving down personal income tax revenues for the state, and for Wilmington, with its 1.25% wage tax. Things will get worse before they get better.
Based on what I have learned about the methodology used to calculate unemployment, I expect that the rate will climb significantly in the next several months. Anyone who drew even one paycheck would not show up in the unemployment report for the month. Even severance pay counts, since workers don't qualify for unemployment insurance until their severance checks run out.
Invista, Chrysler and Circuit City have announced layoffs that did not take effect in December. It could take months for all of their workers to qualify for unemployment benefits. The growing lines of workers applying for benefits will inexorably drive the unemployment number higher.
But it won't end there. Bank of America plans to eliminate 30,000 jobs over the next three years. I expect to see some of those job cuts to affect Delaware.
All of these job losses are driving down personal income tax revenues for the state, and for Wilmington, with its 1.25% wage tax. Things will get worse before they get better.
posted by Tom Noyes at 7:22 AM
2 Comments:
Wait..wait...WAIT! Markell hasn't fixed this yet, either? wRonG and Protack were right about him! Where are we now, day 17? SLACKER!
Do you think it is possible that the economy of the USA will ever return to the level of prosperity we enjoyed in the 2000's, or was it all simply an illusion created by the housing and credit bubble?
People spent what they never really had.
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