Vol. 73/No. 5      February 9, 2009

Heavy equipment maker Caterpillar reported 20,000 jobs will be cut, which is 16 percent of its workforce. Pharmaceutical giant Pfizer, which has just acquired rival Wyeth, said it would eliminate 19,500 jobs.

Sprint reported plans to cut 8,000 jobs, 14 percent of its workforce. Philips Electronics will lay off 6,000 and Texas Instruments, 3,400. So far in January, 52 firms in the United States have reported 210,000 layoffs, according to CNNmoney.com.

General Motors said it is laying off another 2,000 workers and will shut down 10 of its North American plants for a week or more this spring. Chrysler announced it had reached agreement with the United Auto Workers union to close its jobs bank, under which 1,000 laid-off employees received unemployment compensation. GM and Ford are seeking to do the same.

The crisis in the auto industry and in construction was felt by workers globally as British-owned Corus, Europe’s second largest steelmaker, slashed 2,500 jobs in the United Kingdom and 1,000 in other European countries; Nippon Steel Corp. of Japan announced it will reduce production through March by 4 million metric tons; Toyota said it is planning to lay off more than 1,000 workers in North America and the United Kingdom; and Hyundai and Kia in South Korea announced plans to cut auto workers’ hours.

In China, the government reported January 22 that 6 million workers, most of them “migrants” who left the countryside to work in large city factories, are now jobless. Many are returning to their villages.  
 
U.S. Medicaid rolls grow
Mounting unemployment and the lack of affordable health care is forcing growing numbers of U.S. workers and their families to apply for Medicaid.

Although so-called Cobra legislation allows many insured employees to continue health coverage for 18 months after leaving a job, the vast majority of workers are either not covered by Cobra or cannot afford the premiums, according to a study by The Commonwealth Fund.

Some 34 percent of the workforce would not be eligible for Cobra if laid off. They are employed by companies that don’t provide health insurance or are too small to qualify under Cobra regulations or are excluded by other provisions, the study said. For workers eligible to continue insurance under Cobra, the premium payments can be as much as six times higher than what they paid when they were working.

The percent of the population on Medicaid has increased up to 10 percent in the last year in a number of states and will probably increase even further, the January 22 New York Times reported.

In Kentucky, where the state budgeted for 1,000 new Medicaid patients each month, 3,000 have been added monthly since June 2008. The Times said that over the last year one-sixth of the U.S. population, or 50 million people, were receiving Medicaid at any one time.

State governments have stepped up their attacks on health care as the cost has grown. The Nevada state legislature is considering major cuts in the 2009-2011 health budget. If approved, 8 of 11 rural health clinics in the state would be closed; 126 positions in the Southern Nevada mental health program eliminated; wages for personal care assistants cut by $3 an hour, to $15.52; and hospital intake reduced by 5 percent.

Payments to providers have also been cut in California, Minnesota, New York, South Carolina, and Utah.  
 
Medicaid capped in Rhode Island
The state government in Rhode Island has put a $12 billion cap on Medicaid spending for the next five years as part of a deal under which it will have the power to alter Medicaid programs normally regulated by the federal government. The Providence Journal reported that “only those in the greatest need would be guaranteed coverage under the new system, according to Department of Human Services Director Gary Alexander.” The state has an official 10 percent unemployment rate, higher than any other state except Michigan, where the rate is 10.6 percent.

The Labor Department reported that new jobless claims for the week ending January 17 were 589,000, the highest since November 1982. The total number of people receiving unemployment checks is now 4.6 million, up from 2.7 million a year ago.

At least two states are borrowing federal money to pay for unemployment compensation. The government of South Carolina borrowed $15 million to pay January unemployment checks. The New York State unemployment fund has run out of money. It borrows $90 million a week now in order to pay claimants.
 
 
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