March 12, 2010

Maine job losses accelerating righty herey

ANN S

— By . KIM

Staff Writer

Maine's unemployment rate hit a 16-year high of 7 percent in December as the state's economy shed jobs in nearly every sector.

About 3,400 jobs were lost last month, with the most significant declines in the retail trade and construction industries, the state Labor Department reported Tuesday.

Job losses in Maine have accelerated in the past few months. Unemployment rose from 5.7 percent in October and 6.3 percent in November to December's 7 percent. A year earlier, the rate was 4.9 percent.

Maine Labor Commissioner Laura Fortman said the state unemployment rate was mirroring the national trend as economic conditions deteriorated. The national rate hit a 16-year high of 7.2 percent in December.

''I think it's very clear we're part of not just a national economy, but a global economy -- that this impact is being felt all over the world,'' she said.

Maine's job losses totaled 11,700 in 2008, with four sectors accounting for nearly 91 percent of them -- retail trade, 4,100; construction, 3,200; accommodation and food services, 2,100; and manufacturing, 1,200. Losses were offset somewhat by gains of about 2,400 jobs in two areas: educational and health services, and professional and business services.

Additional job losses should be expected this year as the retail sector continues to take a pounding, said Michael Donihue, an economist at Colby College in Waterville and a member of the Consensus Economic Forecasting Commission, a state panel that analyzes Maine's economy.

The state employment picture will continue to mirror that of the nation, he said, and additional grim news is expected Friday when national figures for January are released. Although the picture isn't rosy, the state economy's reliance on the service sector makes it somewhat insulated from the types of heavy job cuts announced nationwide this week at companies such as Caterpillar, the construction equipment manufacturer, Donihue said.

''I'm still comfortable saying that Maine is going to weather the recession better than the rest of the nation,'' he said.

It's difficult to tell whether job losses will accelerate in the coming months, said Dana Evans, a state Labor Department economist.

''I wouldn't be surprised if we saw job losses of this magnitude for the next couple of months, but I've got nothing to hang my hat on other than there doesn't seem to be anything to prevent that,'' Evans said.

The federal stimulus package may be a bright spot on the horizon, but it's too early to know how it will affect Maine, he said.

The new jobless figure follows the return of college students to campuses after winter break. School career center officials say it's too early to know how graduates will fare, but that students are aware of the uncertainty they face. Some say they are considering graduate school and are more aware of the importance of networking in their job searches.

The growing number of jobless Mainers continues to stress the state's unemployment system. Call centers have been overwhelmed by high volume and benefit checks have been delayed.

Volume at call centers last week was up 900 percent from a year before, but down slightly from the previous week, said Adam Fisher, a Labor Department spokesman. Last week saw 45,000 abandoned calls, an improvement from the 20,000 to 30,000 daily abandoned calls seen earlier.

The pressure has been alleviated somewhat by increasing the online application-filing capacity, providing additional information on the phone mail system and continuing weekend work sessions, Fisher said.

About eight additional employees will be answering phones in about 10 days, he said. The department also is interviewing for an additional 48 federally funded employees -- including call center operators, counselors and economists -- authorized by Gov. John Baldacci earlier this month. Baldacci authorized the hires after initially delaying them, citing state budget cuts.

''I think we're getting to a point where we're stabilizing things and able to dig out of the backlog,'' Fortman said.

Sen. Troy Jackson, co-chairman of the Legislature's Labor Committee, said the Labor Department must have all available resources at its disposal.

''If the federal government is offering funding for jobs at the department to help with unemployment claims, we need to take that money and put it to use. Now more than ever, Maine people need to know that someone will be there when they need help,'' Jackson, an Allagash Democrat, said in a written statement.

Fortman said that although some states' unemployment trust funds face problems, Maine's is healthy. The state trust fund was redesigned in the late 1990s to maintain a cushion of about 18 months of benefits in times of high unemployment.

Five states' trust funds are insolvent, and another 13 face a major risk of insolvency, according to the National Employment Law Project. Maine had a balance of $452.2 million in its reserves at the end of December. That's enough to pay its average total of benefit payments for 40 months, compared with a national average of 8.9 months, the organization said.

Staff Writer Ann S. Kim can be contacted at 791-6383 or at:

akim@pressherald.com

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