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As always, the unemployment burden has fallen with disproportionate weight on those with the fewest skills and the least work experience. The jobless rate for blacks is 16.8%, a postwar record. In Detroit, where 26% of blacks are unemployed, despair runs especially deep. Says Leroy Johnson, 24, a welder laid off by Chrysler: "I haven't had any way of getting money together. I'm just wondering what to do." For Detroit's black teenagers, unemployment has surged to 68%, and community leaders fear that they are sitting on a smoldering powder keg of urban unrest.
Though joblessness is still most prevalent among blue-collar workers, white-collar executives are becoming increasingly vulnerable. Trans World Airlines has trimmed its management staff by 21% since June, laying off 332 workers. General Motors said last week that it was reviewing its salaried staff. Company insiders expect that perhaps as many as 13,000 white-collar GM employees will get the ax.
For older workers, both blue-collar and whitecollar, the specter of unemployment is chilling. Bill Collett, 54, of Melrose Park, Ill., has been searching futilely for a decent job since last January, when he was laid off as a quality control inspector at International Harvester. Says he: "Employers keep telling me I'm overqualified, but I know it's my age." This week he will apply for work as a part-time locker-room attendant at a suburban Chicago Y.M.C.A.
The unemployed can expect little in the way of new Government programs from Washington. In sharp contrast to the situation in past recessions, the President and Congress are preoccupied with budget cuts and slowing inflation rather than fighting unemployment. Says Alan Greenspan, chief economic adviser to President Ford: "What I find startling about this downturn is that so few politicians are calling for federal job training or the extension of unemployment benefits. Five years ago, politicians would have been stumbling all over themselves to demand antirecession spending."
The Administration's only short-term strategy to combat the slump appears to be a series of polite public statements by President Reagan and Treasury Secretary Donald Regan recommending that the Federal Reserve Board loosen slightly its iron grip on the money supply. The board seems to be complying. Money growth has been up sharply in the past few weeks, and interest rates are finally falling. Last week the board lowered the discount rate, which is the interest it charges on loans to banks, from 13% to 12%.
Yet the cost of money is unlikely to sink much lower. Both the Reserve Board and the Administration are committed to avoiding a rapid expansion of the money supply that could rekindle inflation. Most economists believe that the expected economic recovery next year will be gradual, at best. They predict that unemployment will still be in the 8% range at the end of 1982.
While the Administration had hoped to avoid a recession, it is now counting on the slowdown to curb the outsize wage demands that have helped fuel inflation in recent years. There are signs that labor unions are indeed holding their fire. The Teamsters, who struck the major trucking companies two years ago and garnered a 31.5% pay hike, have promised to be "reasonable" in next year's negotiations with their employers.