Work-Share Programs Help Blunt Job Cuts
With another brutal month of job cuts, nearly 15 million Americans were out of work in June, disappointing analysts looking for green shoots.
"But right now we need more than shoots. We need branches, leaves and flowers to get the economy to look better," said Stuart Hoffman, the chief economist with the PNC financial services group.
Already a dozen states and the District of Columbia have unemployment rates about 10 percent. With Michigan, the highest at more than 14 percent, only two states - Nebraska and North Dakota - have unemployment rates lower than when the recession began, reports CBS News correspondent Anthony Mason.
Many businesses are trying desperately to hang on to workers. At Tri-Star Industries, a metal working factory in Berlin, Conn., owner Andrew Nowakowski laid off six of his 36 employees, and was going to cut more, until the state came to the rescue.
"This program allows us to maintain our full time work force intact," Nowakowski said.
Under Connecticut's "work-share" program, Nowakowski has cut back his workers to three and four-day weeks, but the state makes up half of their lost wages with unemployment funds. Seventeen other states offer similar programs.
"If I didn't have this I'd be probably trying to get on the welfare line," said James Cassidy, an employee.
But rising unemployment has retailers hurting. A Stride Rite and Payless Shoes, CEO Matthew Rubel says he doesn't expect to see a rebound for at least another year.
"There is still one of 10 people looking for a job. So you can do whatever you want with the Wall Street numbers - Main Street, they're still looking for work," Rubel said. "And until we get them back working, they are not going to go out and spend."
The picture gets worse when you add up all those people who've settled for part-time work or given up looking. The so-called underemployment rate is now a record 16.5 percent.
