September 22, 2009 By Blake Harris
As of this writing, economic recovery is nowhere in sight. In June, unemployment rose to 9.5 percent, with almost another half million (467,000) jobs lost in the month. More than 100 urban areas now have unemployment rates higher than 10 percent, as do many regions.
And according to Mortimer Zuckerman, chairman of U.S. News and World Report, the economy is worse than these numbers indicate. Not counted in the official unemployment rate is at least another 1.4 million people who have given up looking for work and the 9 million workers who have taken part-time unemployment because they cannot find full-time work.
This is terrifying news for cities that have been reeling from reduced revenues for much of the year. As of early February, the National League of Cities (NLC) reported that "unprecedented economic conditions facing the nation are increasingly straining the ability of cities to meet their financial needs." The NLC reached this conclusion based on its latest survey, which found that 84 percent of cities reported facing fiscal difficulties -- up from 64 percent only six months prior. This was the highest percentage in the history of the NLC's surveys, which date back to 1985.
According to the NLC's report, cities are responding to the recession by implementing hiring freezes and layoffs, delaying capital expenditures and cutting services.
"Cities are responding as best they can," noted Donald J. Borut, the NLC's executive director, upon releasing the report. "Their citizens have increasing needs for services just at the same time that revenues are declining."
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