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Unemployment rose from 3.9% in January to 5.8% in November, the highest in seven years, and 4,600,000 people were out of work. Surprisingly, job lessness among blacks increased at a rate well below its historic pattern in business slumps. For many years, the black unemployment rate has been twice or more the white rate; this year the ratio shrank to 1.73 to 1. Reasons: there has been some decline in discrimination, blacks have built up seniority by now, and they have many jobs in service trades, in which layoffs have not been as severe. Joblessness among professional and technical workers doubled, as did the number of persons unemployed for 15 weeks or more, a figure that is considered a crucial measure of real hardship. Early this month some 1,300 Los Angelenos turned out to take examinations in the hope of qualifying for 112 city jobs as unskilled laborers at $540 a month.
Who Needs Hollywood? The Government's reduction in war spending accounted for much of the new unemployment. Labor Secretary James D. Hodgson points out that at least one-third of the rise in joblessness during the past 18 months came from defense cutbacks: net reductions of 500,000 servicemen, 130,000 Defense Department civilian employees and 1,500,000 defense workers. Stubborn pockets of high unemployment in Seattle (10.9%), Wichita, Kans. (9.3%), and Bridgeport, Conn. (7.1%) bear witness to the disrupted careers of Americans who once got high pay in high-technology industries. Some have moved to Europe or Mexico in search of work. Boston Engineer Arnold Limberg once earned $20,000 a year preparing secret reports on moon-landing test procedures. After his firing, he turned in desperation to odd jobs. Limberg charges $5 an hour for yard work, $6 for painting and $7 for roofing or carpentry. "You name it, I'll do it," says he. "In a good week, I sometimes earn $200."
A wide variety of industries fell into serious trouble in 1970. Moviemakers struggled unsuccessfully to overcome the handicap of lower labor costs and government subsidies that have lured American producers overseas. About half of the films shown in the U.S. this year were foreign-made. Short of cash, many studios sold off valuable real estate, chopped production and consolidated offices. About 80% of the members of the Screen Actors Guild had no work. Quipped Bob Hope: "The only actor still working in California is Ronnie Reagan."
Among other depressed industries, airlines had their worst year ever because of soaring operating costs, meager traffic growth and huge outlays for jumbo jets. A sensitive indicator of the U.S. economy, airline traffic goes into a dive whenever business in general weakens. This year companies reduced business travel, presidents moved back to the tourist-class cabin, and families postponed faraway vacation trips. The nation's twelve major airlines expect to lose as much as $125 million before taxes in 1970; Trans World Airlines alone will show a deficit of up to $65 million. The industry predicts even bigger losses in 1971 and 1972, although it has made stringent economies. The number of flights has been reduced, and United even saved $250.000 a year by eliminating macadamia nuts on most runs (passengers get peanuts instead).*