Return to Transcripts main page
Issue Number One
Unemployment Rates Surge; Jobs Report Causes Many Americans Concern
Aired June 06, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: You'll see some of the stories that will have you talking that's for sure. CNN NEWSROOM podcast available 24/7 right on your iPod. CNN NEWSROOM continues just one hour from now.
TONY HARRIS, CNN ANCHOR: "ISSUE #1" is next with Gerri Willis and Ali Velshi. But first, a quick look at the headlines.
(WEATHER REPORT)
COLLINS: Barack Obama, Hillary Clinton, new details from their secret meeting last night. It was hosted by Senator Dianne Feinstein, at her Washington home. She says Clinton and Obama met alone in her living room for about an hour. They called her back when it was over and both said it went well. It was their first meeting since Obama earned enough delegates to win the Democratic nomination and it comes as Clinton prepares to announce tomorrow she will suspend her campaign and back Barack Obama. That's the news for now.
I'm Heidi Collins.
"ISSUE #1" starts right now.
ALI VELSHI, CNN ANCHOR: The jobs report is out and it's not pretty. What it means for the state of your job. And we'll tell you about retraining and where the jobs are right now. Why thousands of California teachers walk off their jobs this morning. An historic global warming bill hits a major snag in the Senate as the price of oil reaches a new record.
ISSUE #1 is your job, your house, your savings, your debt. A jam packed ISSUE #1 starts right now.
Hello everyone I'm Ali Velshi. This is ISSUE #1. Gerri Willis will be here in just a minute. We begin with the biggest jump in the unemployment rate since 1986. Some 49,000 jobs were lost in the month of May. Deflating some folks' hopes that the economy was starting to turn around.
CNN senior correspondent, Allan Chernoff, has been looking at the numbers to figure out what it means for all of us and all of you out there.
Allan, this seems pretty disastrous. That's a big jump in the unemployment rate. ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Absolutely. A huge increase in the unemployment rate. We jumped up half a percent to 5.5 percent. That is the biggest one-month gain in more than two decades. Not only were jobs lost in manufacturing which is a long-term trend but also in construction, retailing and temporary help. That really indicates a downturn in the economy.
VELSHI: How do we explain this? We actually saw a bit of a break in April. These are May's numbers. We saw a little bit of a break. We thought maybe things were turning around and now we're back into these big numbers. How do we explain these job losses?
CHERNOFF: Let's dig deeper in this whole situation. The labor department also reported that the number of jobs lost in May was 49,000 which actually is not a huge loss for our economy in which nearly 150 million people work, believe it or not, the labor department actually called that job loss statistically insignificant. Obviously, it is not for the people who are out of work. But there does appear to be a disconnect between the loss in jobs and the big jump in the unemployment rate which could raise some confusion about how bad the economy really is.
VELSHI: We do speak to a number of economists who say that you need to add 100,000 jobs a month to this economy. We are now over 300,000 jobs lost in this economy since the beginning of the year. What's going on? What is the solution for our viewers out there who either are worried about losing their job or are looking for one?
CHERNOFF: Right, well let's explain this apparent disparity so people can get a better handle on the economy. There are two different surveys that the labor department does. The survey of households determines the unemployment rate of 5.5 percent for the past month. The workplace survey which is larger and more reliable determines the payroll data showing that job loss of 49,000. The economy therefore may not be collapsing as much as the unemployment rate might seem to indicate. Now how do we explain the big rise in unemployment if the job loss wasn't all that bad? There was a large increase in the number of people entering the work force in May. Nearly 600,000. The vast majority of those people did not find jobs. They immediately joined the ranks of the unemployed and contributed to the rise in the unemployment rate.
VELSHI: We need to continue to gain jobs. When somebody looks and says we have only lost jobs since January, we haven't created jobs, that's not actually true. It's a net loss. We've been creating some jobs and health care is an area that's been growing for over a year now.
CHERNOFF: Absolutely. We are always creating jobs. At the same time, some companies are slashing away. That's always going on. No doubt about it. And the fact is that a lot of people are going into the workforce because of other economic factors here. People are feeling a squeeze. Gas prices are soaring, the national average just shy of $4 a gallon at the pump. As we reported, food prices have been rising rapidly. And many people are struggling to pay their mortgages and avoid foreclosures. So a growing number of Americans who have been out of the workforce realize they need to try to find jobs.
VELSHI: Now this is ISSUE #1 for a reason. A new poll that we're going to show our viewers in just a few moments, will indicate that once again Americans think that the economy is ISSUE number one.
What are the presidential candidates saying about this unemployment report?
CHERNOFF: Well of course they're responding and they trying to make political hey of all of this. Barack Obama's campaign put out a statement saying, working families continue to bear the brunt of the failed Bush economic policies that John McCain wants to continue for another four years. John McCain says Americans across the country are hurting and we must act now to support workers, family, and employers alike. The American people cannot afford more inaction from Washington. Ali, obviously, this is ISSUE #1.
VELSHI: We'll stay on top of it with you Allan. Thanks very much..
Senior correspondent, Allan Chernoff.
VELSHI: Well it's not just the jobs numbers. Our next guest says the data is accurately predicted. He knew this was happening, we've talked about it for a long time. Lakshman Achuthan is the managing director at the Economic Cycle Research Institute. They have been predicting recessions for many years, for decades, without getting it wrong. So you knew this was coming you knew -- you have been telling me for a long time, don't get distracted by all the bright, shiny lights. Pay attention to jobs.
LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INST.: Yes well jobs are a key definer of when you are in a recession. I think if today's news does anything for us, in this debate, it should kind of solidify this diagnosis that we are in a recession. We have had over a 1 percent increase in the unemployment rate since last spring.
VELSHI: That was 4.5 percent, now it's 5.5 percent.
ACHUTHAN: Yes, it was actually 4 or 5 or 4.4 last spring. Now it is 5.5. You have never seen anything larger than half of that rise. This is twice as bad as what would be a recessionary rise. And you've also had five months of job losses, you've never seen that outside of a recession. So I think one of the main things we can do is recognize that we are in a recession so that we are dealing with policies and plans, both on -- at home or in Washington, that kind of get us out of this.
VELSHI: What is the prescription you used to get out of this?
ACHUTHAN: Well, look, if you have a job, keep it. I mean, and -- one of the things. Just show up and do your job and focus and don't get distracted. If you are looking for a job, very tough. Surveys have been telling us that for months. And now we are seeing it in this official data. In terms of policies, certainly, I mean, the train has left the station. Timing is everything. Acting earlier this year or late last year, can't go back and rerun history. But the lesson learned is timing is everything.
Going forward, we know the epicenter of all of this is really in the housing sector. In home price decline. So to the extent that there is anything, and I'm not exactly a policy walk, but to the extent policy walks can focus on how to help put a bottom in there, that will be a part of a healthier recovery down the road. We have oil here.
VELSHI: Does the candidate -- for the candidates that are out there talking about the things they have to do, we heard what John McCain and Barack Obama are saying, can the president, can congress do things to stimulate a job market? Can you do things that create -- John McCain says if you lower corporate taxes, businesses will have money and they'll use that money to expand and hire people. Barack Obama has a traditionally more Democratic view which suggests that the government should in fact subsidize certain industries and grow jobs. He has a proposal to grow 7 million jobs with direct government involvement. What works?
ACHUTHAN: There's some truth in both of them quite frankly. And I'm not trying to dodge this. There are, those are long-term structural questions that we must elect people to figure out on how our economy is going to run. As for coming out of this recession, the train has left the station. It's done. This is going to run its course now. Our policymakers are trying to play catch up and do what they can to mitigate this. You see the Fed trying to do things with the dollar and with oil prices and they are having a mixed success there.
I mean today is a failure, for example. We have oil prices spiking up again. Because people don't have faith in the stock market or the credit market. And so they're running up these commodity prices which hurts the person at home.
VELSHI: We're going to have to keep giving the person at home more information as to what they can do in their own light to keep a job or get a job. Right now, focus, go to work and do a good job. Don't be playing games at the job.
Lakshman, thanks very much.
That brings us, of course, to today's Quick Vote question. Gerri has that.
Hi, Gerri.
GERRI WILLIS, ANCHOR: Hey, the person at home listen up. You can participate now. It's time for today's Quick Vote question. Poppy Harlow is here from CNNMoney.com.
What's the question Poppy?
POPPY HARLOW, CNNMONEY.COM: Hi, Gerri.
Well yes, focusing on jobs. If you're like any of us here at CNN, you spend most of your day at the office. How do you feel about your current job?
Here is our CNNMoney.com Quick Vote question today. My job gives me happiness, satisfaction, headaches, or a paycheck. Weigh in on CNNMoney.com, we'll bring you those results a little later in the show. With those unemployment numbers, I bet people are happy to have work.
WILLIS: Well I hope they answer the first two. Happy and satisfaction. That would be a positive. What happens though when you lose your job? There is no place to go. We'll take you inside the world of retraining, that's next. Plus we'll tell you what industry is hiring more than ever? We want to hear from you. Send us your questions and we'll answer them on the help desk, issue1@cnn.com. Keep those e-mails coming. You're watching ISSUE #1.
(COMMERCIAL BREAK)
VELSHI: Well this tough economy and high gas prices are taking a toll on the auto industry. Thousands of workers have been laid off or fired. Many have families to feed, mortgages to pay. What happens next to this segment of the work force? Some of them are retraining, retooling and reinventing themselves.
Deb Feyerick has the story.
DEBORAH FEYERICK, CNN CORRESPONDENT: Imagine you have your life planned out. Good job, decent salary and then it ends? That's a position many people including auto workers are in these days, forced to start over.
(BEGIN VIDEOTAPE)
FEYERICK (voice-over): 38-year-old Michael Almada, grew up in Michigan. Knowing he was destined to work at one of the big three car makers.
MICHAEL ALMADA, NURSING STUDENT: My father and my cousins worked at Ford. A lot of friends I knew worked at Ford. It's a big family.
FEYERICK: But the auto industry got hit hard. Shifts were cut. Overtime pay disappeared. After almost 10 years handling heavy machinery, Almada realized it was time for plan B. Did you know immediately that you were going to go into nursing?
ALMADA: Pretty much because I gave it some thought when the rumors of a buyout were happening.
FEYERICK: In fact nursing is one of the most popular new jobs in Michigan for out-of-work auto workers like Almada. The pay is good, demand is high. In many cases, automakers are picking up the tab. Four years of tuition for training as part of certain buyout packages. Did you think about long term when you made the change?
ALMADA: Sure. There is never going to be a shortage of sick people, you know. FEYERICK: Almada who is married and who spent five years as an army medic just finished his second year at Michigan's Oakland University. Tasondra Watkins a former Daimler Chrysler assembly line worker will graduate from there as a nurse in January.
TASONDRA WATKINS, NURSING STUDENT: From the plant where I came from, there were a lot of people talking about starting nursing programs because we know that the medical profession primarily nursing has a shortage.
FEYERICK: Even though Almada thinks the auto industry likely pays more than nursing, he says he has no regrets. In fact, some of his cousins still work at the plant.
ALMADA: Being on the outside of it actually feels a lot better than being on the inside.
(END VIDEOTAPE)
FEYERICK: Starting over can be scary at any age. But between nursing and environmental green collar jobs, optimists say it's just a matter of knowing where to look and possibly being willing to move.
WILLIS: Thanks for that. The economy is taking a toll on the job market as we saw today. The housing market and the lives of American families, President Bush is expected to address the economy in an event about 90 minutes from now.
CNN's Ed Henry is live at the White House with what we can expect to hear from the president -- Ed.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Gerri, clearly this is not how the president wanted to spend the final seven months of his presidency dealing with a possible recession that could really damage his legacy long term. We are expected to hear him today about 1:50 Eastern Time at the department of housing and urban development. He is going to be swearing in officially a new housing chief, Stephen Preston. Obviously the housing crisis is a key ingredient to all the economic problems out there. We are expected to hear the president address that maybe even talk about the job numbers, as well. Democrat Rahm Emanuel today has been mocking the president though for not using the word recession. Emanuel saying that what's happening for American families right now is a crisis, but for the president it's still just a slowdown.
On those jobs numbers, Scott Stanzel the White House spokesman a little earlier telling reporters that while the payroll numbers were a little better than expected, clearly the jobs numbers were not as good as expected. He said, "Obviously this isn't the report that we wanted to see. I would note also that last month the unemployment rate dropped, so we've seen choppy data on the economic front and we'll keep a close eye on it.: Now obviously keeping an eye on it is one thing. What the American people clearly want is action.
The president did act earlier this year with those stimulus tax rebate checks. Stanzel noting that over $50 billion in tax rebate checks have already been sent to consumers by the Department of Treasury. But there has been as you know a lot of anecdotal evidence that people are using those checks to pay for high gas prices, to maybe pay off credit card debt. So it still remains to be seen whether those tax rebate checks are really going to stimulate the economy as much as the president and Democrats on the hill had wanted -- Gerri.
WILLIS: Stimulate the economy, obviously. But could there be a second stimulus package? There is a lot of talk about that. Any expectation it could actually happen though?
HENRY: Well Democrats like Speaker Nancy Pelosi want to have what they call a second bite of the apple. They want to have something like 13 weeks of extending unemployment benefits, for example, for people who have lost their jobs. Maybe more food stamps for people on the lower end who are really struggling with high food prices clearly. But right now the White House has been cool to those ideas. So I don't think we'll see one in the short term but I think come this summer when there is a lot of political pressure, you are going to see the Democrats pushing harder for a second stimulus package -- Gerri.
WILLIS: Thank you for that.
VELSHI: Up next, developing news on an historic climate control bill on Capitol Hill. Plus how to figure out your own carbon footprint. I want to find that out. We keep talking about this. Then why thousands of California teachers walked off the job this morning. What were you in high school? A jock, a cheerleader, the teacher's pet? Find out how that might translate into the level of your success. You're watching ISSUE #1 on CNN.
(COMMERCIAL BREAK)
WILLIS: Welcome back.
They say timing is everything. For the proposed global warming bill that was up for Senate consideration, $4 gas may have been the clincher against it. After days of heated Senate debate over the proposed legislation, Republicans essentially killed it this morning by successfully filibustering the measure. The bill called for significant reductions of carbon dioxide and other greenhouse gasses. Opponents mostly Republican argued it would make energy prices rise even more. Democratic Senate majority leader, Harry Reid, is expected to withdraw the bill and revisit the issue next year with a new president and congress in place -- Ali.
VELSHI: Thanks, Gerri.
Time now for your CNN energy fix. Although it feels like all we ever talk about is energy. CNNMoney.com's Poppy Harlow is following energy very closely for us. Given what Gerri was just talking about, this is interesting. What have we got today, we've got high oil prices and slightly lower gas prices.
HARLOW: We have some good news out there for you. Fill up your car today. Oil prices are lower for the first time in a month. Gas prices fell. We haven't told you that for quite a while. But the nationwide average now stands just three tenths of a penny, stands at $3.986. So don't go spending all those pennies in one place. Even that slightly lower price isn't likely to last. Crude oil prices soared more than $5 yesterday. The single biggest surge in one day in the last 25 years.
But guess what? It is worse today. Oil this morning up about $6 more. In fact, Morgan Stanley analyst is predicting the price of crude futures will hit $150 a barrel by the Fourth of July this year. A lot of fireworks there. The reason, growing demand in Asia another factor. Today an Israeli official is quoted as saying an attack on Iran's nuclear site looks quote, "unavoidable." Now these factors coupled with the retreat from U.S. stocks means Ali a lot of money pouring into the commodities market, pouring into oil.
VELSHI: All right there was a report out that talked not only about oil supply but the fact if we really wanted to tackle global warming, as Gerri was just talking about, how much money this would cost.
HARLOW: It's an astounding number here. Now the energy fix what we want to do for you is not an easy one. The new report out from the Paris-based international energy agency says in order to combat global warming and relieve the supply worries, it's going to take an investment of $45 trillion. It says that money should go towards 1,400 new nuclear plants by the year 2050 and to more than 17,000 wind turbines per year. This is all in an effort to reach the U.N.'s goal of cutting emissions in half by the middle of the century. Now that $45 trillion figure is hard for anyone to fathom. It is three times the size of the U.S. economy. By the way, most of it would need to come from growing economies in Asia.
So the stakes folks are certainly high. First, major concerns about supply. Oil consumption projections indicate the world will need five times the amount of oil that Saudi Arabia currently produces by 2050. Something the report says is really unsustainable. From an environmental standpoint, more global warming could cause famine, drought, coastal flooding and a loss of species. So looking at this surge in oil Ali, up $6 today, an energy fix can't come soon enough. It's an important issue. A lot more on our site CNNMoney.com.
VELSHI: Remember that gas prices tend to lag those oil prices. We may be getting a break for a day. But oil prices up near a record. Those numbers we've had people come on here and tell us we've got to treat the energy crisis like it is really important. There are some people out there Gerri who will blog about the fact that oh CNN goes and calls it an energy crisis again. Well guess what, it is an energy crisis -- Gerri.
WILLIS: It is an energy crisis. But you know what, I've got a different question for you Ali Velshi. What were you in high school? A jock? Were you a cheerleader? You weren't the teacher's pet, were you the teacher's pet?
VELSHI: I was not the teacher's pet. That one I wasn't. WILLIS: We're going to have a story on this today. Find out how this may be related to how successful you are today, what you were in high school. That's coming up next on ISSUE #1.
(COMMERCIAL BREAK)
WILLIS: Thousands of California teachers walked off the job today. The issue, hundreds of millions of dollars planned to be cut in state funding for the Los Angeles school district.
CNN's Ted Rowlands, is live right now at Los Angeles High School with the very latest. Ted?
TED ROWLANDS, CNN CORRESPONDENT: Hi, Gerri.
This is a bold move by educators to show up to school basically an hour late. Administrators tried to prevent them from doing this. I actually saw the court order. They were denied that yesterday because the students were inside the schools and the teachers were outside the schools protesting a proposed budget cut from Governor Arnold Schwarzenegger.
Now what is on the table here is cutting the budgets of schools in California. California, like many states, is facing a severe deficit. $17 billion in this state. The governor basically said there is not much we can do. We are looking at everything, usually you don't touch the police, the fire or the schools. Today you see why because the unions are very, very powerful. Today they were able to pull this off without a hitch. There was a lot of concern that with all those students inside and administrators putting them in gymnasiums there could be some safety issues.
But we understand that the 800 plus schools that participated today did so without incident. Teachers say beware because if our voice isn't heard in Sacramento, we could have more of these work stoppages.
WILLIS: Wow.
Now Ted, tell me, how much of a budget cut are we talking about?
ROWLANDS: It depends on who you talk to, obviously, when you are talking about political issues. There is fuzzy math on both sides.
Teachers say that basically they are out $353 million in this proposed budget. Governor Schwarzenegger says that is nonsense; you're actually getting more money than you got last year. But what they are factoring in is cost of living increases, et cetera, et cetera. They say the bottom line is you shouldn't touch -- no matter what the problems are in your state -- you shouldn't touch education because it's going to hurt in the long run, it's going to hurt the kids. So we are seeing this fight going on here in California.
I think we are going to see it in a lot of states moving forward as these budget deficits become a real problem for governors across the country. WILLIS: Well Ted, I think it's a sign of the times.
Thank you for that.
VELSHI: Coming up next, we're going to take a look at what jobs are still stable in this tough economy. Allan Chernoff has that. And believe it or not, one of them is teaching.
But first, let's get you up to speed on the latest headlines.
Brianna Keilar is in the CNN NEWSROOM -- Brianna.
BRIANNA KEILAR, CNN ANCHOR: Ali, thank you.
Barack Obama and Hillary Clinton had a secret meeting last night. We have some new details from that. It was hosted by Senator Dianne Feinstein at her Washington home. She says that Clinton and Obama met alone in her living room for about an hour, then they called her back when it was over. Both said that it went well.
This was their first meeting since Obama earned enough delegates to win the Democratic nomination. It comes as Clinton prepares to announce tomorrow that she is suspending her campaign and backing Obama.
We're also keeping an eye on severe weather.
Chad Myers is in the CNN weather center with more on that -- Chad.
CHAD MYERS, CNN METEOROLOGIST: Hi, Brianna.
We had some severe weather across Minnesota already today. We are waiting for the heat of the day for it to fire up around Chicago. There will be storms from Chicago southward right into St. Louis, where the heat and cold air actually clash. We are going to get that hot and cold clash there and a jet stream aloft to make these storms later on today.
Now it's not going to be a big, severe weather outbreak day, but there still will be some weather. Right now, one tornado watch up near Grand Forks (INAUDIBLE) to Green Bay, but back a little bit farther down south, toward Chicago. The showers are beginning to pop- up.
We'll see some storms pretty soon though. It's starting to warm up out there, and that heat of the day will make those storms pretty strong -- Brianna.
KEILAR: All right. Thanks, Chad. We'll be keeping an eye on all of that weather ahead, at the top of the hour in the CNN NEWSROOM.
I'm Brianna Keilar. Let's head now back to Ali in New York.
VELSHI: All right, Brianna. I'll see you at the top of the hour. Job losses are mounting as the nation's unemployment rate continues to climb. So, where are the jobs in the slumping economy?
Allan Chernoff takes a look.
(BEGIN VIDEOTAPE)
CHERNOFF: Maria Tessinari thought she had a dream job when she worked at ABC News as a production coordinator.
MARIA TESSINARI, NURSE: In the beginning, I was bright-eyed and bushy tailed and I thought oh my gosh, this is wonderful.
CHERNOFF: But after several years, she realized television news was more hard work than glamour. And as friends were laid off, she saw it wasn't terribly secure.
TESSINARI: You realize that this is not a stable industry. This is not an industry where I know I will have a job for the next 15 or 20 years.
Let's see what we have going here.
I was inching towards 30, and I realized, I don't want to wake up at 50 and be unhappy at what I'm doing. Life is too short, especially after what I've been through.
CHERNOFF: Maria's dad suffered from a debilitating illness. And her mom was stricken with a brain aneurysm. Caring for both of them until they passed helped Maria realize that nursing on a professional level was her true calling. So she went back to school to become an oncology nurse.
TESSINARI: I need to make people feel good on a bigger level.
CHERNOFF: Even in this slumping economy, health care employment is up. Last year, there were 113,000 more nurses in the work force. The biggest increase since 2002. Some are retired nurses going back to work because of the economy.
NANCY CORCORAN, HACKENSACK UNIVERSITY MEDICAL CENTER: Their husbands (ph) may have gotten laid off and they don't have benefits. They need health care benefits, so they are coming back to work obtain benefits for their families.
TESSINARI: All right, Peppe (ph), this should make you feel better.
CHERNOFF: The benefits for Maria include helping people for a living, as well as knowing that a nursing career means a job for life.
TESSINARI: You have to know that you have a paycheck coming in. You have to know that you have somewhere to go. There are always jobs in health care. It's the human body. It's health. We are not going anywhere.
(END VIDEOTAPE)
CHERNOFF: Maria says she has never been so happy going to work every day, especially knowing that she can always land a job -- Ali.
VELSHI: What does that say about television news?
CHERNOFF: You've got to have some serious passion for this and be willing to really, as you know, put in the hours.
VELSHI: All right. You said something about 113,000 new jobs created last year in nursing. What is the outlook? Is it going to keep on growing that way? It's one of the top growing professions isn't it?
CHERNOFF: Nursing continues to grow.
Ali, this is a spread sheet of nursing employment going back to 1990. Every single month is an increase. There has not been a decline in health care.
VELSHI: And theoretically as the -- population ages, there are going to be more nurses needed.
Now, there's some other particular advantages to becoming a nurse in this country.
CHERNOFF: Hours are very flexible, without question. In fact, Maria is putting in work for just several days a week, but longer days. She can have that flexibility. She's got one day she works only four hours. It works out very nicely for her. So that is a great advantage.
Because there is always demand, she could also move around the country if she wanted to and find a new job there. You can't do that in a lot of industries.
VELSHI: That's good. Excellent.
Thank you, Allan -- Gerri.
WILLIS: Well, Ali, what you were in high school may have something to do with the kind of job you hold today, from cheerleaders to geeks to athletes. We'll break it all down. Who is making the big bucks -- I know you want to know about that.
And buy one house, get one free? It's not a joke. But is it really a steal? We'll find out next on ISSUE #1.
(COMMERCIAL BREAK)
VELSHI: Financially trouble United Airlines has struck a deal with its flight attendants union that could shave as much as 600 employees in a retirement incentive package it announced today. Terms of the early out plan, as they are calling it, flight attendants who are at least 45-years-old and with at 15 years of service to the company, they'd get a severance deal tied to the tenure of service along with retiree travel benefits.
United Airlines, like many carriers, is looking for cost-cutting measures in light of spiking fuel prices. On Wednesday, United announced it would slash 1,600 positions and ground 100 planes.
WILLIS: What were you like in high school? Were you the jock, the cheerleader, a student government type or maybe you were just the teacher's pet?
A new survey shows that what you were like in high school could actually make a difference in what you are doing right now, how much you're earning.
Jason Ferrara is a senior career adviser with Careerbuilder.com. He's joining us now, live from Chicago.
Good to see you.
JASON FERRARA, SR. CAREER ADVISER, CAREERBUILDER.COM: Thanks for having me.
WILLIS: All right, Jason, how did you come up with this? What was your methodology in looking at this question?
People think about high school status. They try to equate it with job status, but most of us are unsuccessful. How did you do this?
FERRARA: Well we thought it was a great time to do the study. A lot of high school graduations happening right now anyway. So, it's timely and topical. And we had people self-report. So we asked people you know, what type of persona were you? Were you an athlete? Were you a geek? Were you an honor student? And then ask them what they are doing now in their careers.
WILLIS: All right, Jason. Let's talk about cheerleaders first. Now, they have some real success. Tell us about them.
FERRARA: Sure. The cheerleaders we found were most likely to be vice presidents. We were analyzing why that could be. You know, the job of a cheerleader is to communicate what's happening now, immediately and get the crowd into what's happening now. In that vice presidential role they seem to have gravitated toward, it's same sort of type of motivation. You know, communicating to the organization, here is what's happening right now and getting everybody behind that.
WILLIS: All right, the teacher's pet. Not so happy this group of people anymore, right?
FERRARA: Well, the teacher's pet has been in the admin and clerical world. Sort of selected into that world, right now. The satisfaction for them seems to be relatively high. But the progress that they see in those roles is relatively low.
WILLIS: Yes, I can see that. OK, well let's talk about who earns the most. Now, I'm betting on the geeks, am I right? FERRARA: Well actually, it's the student government and the honor students who are earning the most. Although, the geeks are up there. They've chosen engineering, IT fields, fields that you know are still hiring today and pay good money.
WILLIS: All right. You have some surprising information about athletes and geeks. What is that?
FERRARA: Well, you know, athletes and geeks are those that groups we see really at both ends of the spectrum. You don't think years down the road those two groups would end up choosing the same profession. But we see athletes and geeks both gravitating toward engineering and IT. That could be about problem-solving, that could be about competition. But regardless, they are doing the same thing today.
WILLIS: All right. Drama club folks, the Honor Society, how did they end up?
FERRARA: Sure. Drama club, interesting, went into health care. And that might be an empathy. You know, maybe easy for someone in drama to empathize with what's going on in the health care world. And drama also went into government. And there's no shortage of drama there so I think that probably fits together pretty nicely.
WILLIS: Well, Jason, thanks so much for your help today. Fascinating survey. Really interesting stuff.
VELSHI: All right. Well coming up, buy one, get one free always sounds good. But it usually involves a Big Mac or a pair of socks, or something. We're going to tell you why you might get a two-for-one deal on a house. And if it's too good to be true. Then the help desk, right over my shoulder. Standing by to answer your money questions. Send us an e-mail, issue1@CNN.com.
I'm going to get my question in right now, stay with us.
(COMMERCIAL BREAK)
VELSHI: Buy one get one free sounds particularly good in this tough economy. Sometimes I actually root out my daily schedule based on them. You know, get a free shake with your fries, an extra pair of socks. But, get two homes for the price of one. And that is exactly what one developer in southern California is doing.
John Mattis, from our affiliate, XETV, has a look.
(BEGIN VIDEOTAPE)
JOHN MATTIS, XETV REPORTER (voice-over): You see the burger discount offers all over now. Combo value meals, free Cokes, free fries.
Now, builders are doing it, too.
MARK CONNAL, MICHAEL CREWS DEVELOPMENT: You buy one and you get one free.
MATTIS: You heard the man, from Michael Crews Developers. Buy a mega mansion for $1.6 million, get another smaller home, free.
CONNAL: This is the Big Mac. The other home is the fries.
MATTIS: The first home is big, really big. Three bedrooms, a big kitchen and a huge garage. Pool and a view, all for $1.6 million. Then the second home in downtown Escondido, is yours.
CONNAL: Give a brand new row home, for free.
MATTIS: They say the value on that is $400,000. The reason for the giveaway?
CONNAL: We have to reduce our inventory.
MATTIS: It's all part of a coupon offer on the web. But then again...
(on camera): No coupons needed?
CONNAL: Not necessarily.
MATTIS (voice-over): But, hold on. Is it all too good to be true?
(on camera): So,just like any combo fast food deal where you get the free fries, but you question the deal? You need to question this deal, too.
BRIAN YUI, CEO, HOUSEREBATE.COM: I think it's a great marketing ploy by the developer.
MATTIS (voice-over): Real estate expert, Brian Yui, took a look for us.
YUI: There's a comparable house right down the street, the same model, which pretty much is selling for $300,000 less.
MATTIS: That's right, $1.29 million, built by the same builder. So Brian says, unless you want a second row house on a busy street, be smart. Just demand a mega discount on that mega mansion.
YUI: Everything is negotiable in this marketplace.
MATTIS: They might even throw in a free milk shake.
CONNAL: We can include that. It's just whether you want chocolate, strawberry or vanilla. We'll put that in there, real ice cream.
(END VIDEOTAPE)
WILLIS: That was Bill Mattis, from XETV. From two for one to three for one. Yes, we've got the answers. Our help desk is in business this afternoon. We're going to answer all of your e-mail questions.
The hope desk today, Doug Flynn, he's a certified financial planner with Flynnzito Capital Management.
Allan Chernoff is a CNN senior correspondent and of course, Stephanie Elam, is also a CNN business correspondent.
Welcome, all. Let's get right to those e-mails.
Marnie in Maryland asks: "My husband lost his job a month ago. I got a hardship payment reduction plan for my mortgage, but still cannot afford the mortgage payments. Should I start taking out of my husband's 401(k)? It has about $20,000 in it".
Doug you know, we saw the numbers today, on employment. Really disappointing. People suffering out there. Is now the time to turn to the 401(k) money?
DOUG FLYNN, CERTIFIED FINANCIAL PLANNER: It's unfortunate. I think it's great that she got a new number for the mortgage. That is fantastic that they worked that out. But I think the 401(k) is the last place you want to go. Because people look at that number and think that that's all real money that they can touch. If you are not 59-and-a-half, in addition to taxes you're going to pay, you're going to pay a 10 percent penalty. So, you might see only 50 to 60 percent of that number. And what you have to do is act as if I only have half of that. And if that's not enough to get you through this, you have to look at other alternatives.
WILLIS: but, if the choice is between the house and the 401(k), which I am not going to use for another 30, 40 years to begin with, shouldn't I tap the 401(k)?
FLYNN: If you don't turn it around by the time you use that 401(k), what are you going to do then? And then you have no house and no 401(k).
WILLIS: And which is a disaster. Absolutely. Doug, that is a great answer.
The next e-mail is from Brian. He says: "I'm 18-years-old and in college. I have a savings and checking account. What would be better: a credit card or debit card? Should I try to build up my credit with a credit card, or should I wait until I'm out of college."
This is a big question, Steph. And I don't know how many credit cards college kids think they need. But it's crazy.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Maybe it's because there's stations all over the campus where you're like get a T-shirt and a frisbee and you can get a credit card.
But, I think it's great that first of all, Brian is even asking about this, he's thinking about this. And if he wants to do it a safe way, he can get a secured credit card through his bank. That way, what you deposit is your limit. So you can't go over it, so you can get used to the idea. So you do not need a ton of credit to get it started. You could even use a gas card from a gasoline station.
WILLIS: And we should say. Hey mom and dad, don't let them piggy-back on your credit card account, right?
Allan, did you have something you wanted to say?
CHERNOFF: It's all a matter how responsible you are. If you know you can handle it without going into debt, go for it. It's not bad to build up your credit record. But if you're not the type who is really responsible with money, forget about it.
WILLIS: You know who you are, right?
All right. OK. The next question from Ray in Pennsylvania: "Can you explain what 'excessive speculation' is and how it affects the price of crude?"
Allan, made (ph) for you.
CHERNOFF: What's happening in the energy market is that there's been a tremendous number of investors piling in -- hedge funds, pension funds, colleges, institutional investors. They are all putting lots of money in. And most of that money is on the long side, meaning they are betting that prices will be going up.
Is it excessive? Well, that may be in the eye of the beholder.
But that is, without a doubt, a major factor that has been pushing all, really, of the commodity markets higher. That's one reason there seems to be a little bit of a disconnect between these outrageous prices for oil and gas right now. And the fact is that there is still plenty of supply out there.
WILLIS: Plenty of supply. No shortages.
You don't see those lines around the block. Right?
CHERNOFF: None.
WILLIS: All right. Let's get Amit's question: "I am 40-years-old and have my 401(k) invested in a growth strategy that gave me a return of 8 to 10 percent every year. All my gains have evaporated in the last six months" -- Ouch -- "is it time for me to temporarily switch my investments from growth to a more conservative strategy?"
How many times, Doug, do you get this question?
FLYNN: Yes, a lot. I would just simply say -- I would only do that if you think you are smarter than someone like Warren Buffet.
(LAUGHTER)
FLYNN: Back to what do the wealthy people do? They don't --
WILLIS: I love that question -- what do the rich people do, Doug?
FLYNN: What do the rich people do? They don't start bouncing back and forth. They stick with the longer term investment strategy that they can stay with long term. Now if you are feeling like the excess volatility is too much for you right now, that probably means you are a little bit more growth-oriented and you probably are too risky. Now is not the time to make that conservative adjustment.
What you do is make a note the next time the market blasts through its all-time high, some time next year, then you take a step back. You won't want to do it then, because everybody else will be getting in but --
WILLIS: I'm telling you, when the market is soaring, that's when people want to put in more money.
Let's take Leonard's question from Texas: "Why are ethanol prices moving in direct relation to gasoline? I understand that it is made up of 15 percent gasoline, but why is it moving penny for penny with gas?"
CHERNOFF: What's going on here is that ethanol is a substitute for gasoline. So therefore, it is rising along with the price of gas even though, again, plenty of ethanol out there. We are producing more and more of it all the time.
But it's a substitute, so it's rising along with the price of gas.
WILLIS: Great job, guys. Great answers, tough questions.
My thanks to Doug Flynn, Allan Chernoff, Stephanie Elam -- Ali.
VELSHI: Thanks, Gerri.
Coming up, quitting your job to start a new career. The story of one woman who pulled a 180 in her professional life. See if you can do it too.
Then we want to know how much you like your job. I really want you to weigh in on this Quick Vote question. Log into CNN.com. We're going to bring you the results coming up next. You've got a few more minutes.
You're watching ISSUE #1, right here on CNN.
(COMMERCIAL BREAK)
WILLIS: Welcome back to ISSUE #1.
Does your job leave you satisfied, happy or does it give you a headache? That is today's Quick Vote question.
Poppy Harlow -- from CNNMoney.com -- she's here with the results.
So, what do people say?
HARLOW: Kind of disappointing news. Only 7 percent of you are happy with your job, 21 percent of you are satisfied, 10 percent of you actually get a headache from going to work. But 62 percent of you say your job just really brings you a paycheck. So maybe stop and buy Aspirin, hit monster.com and look for a new job.
WILLIS: Well in this market a paycheck may be more than enough.
HARLOW: I know. Paycheck to paycheck.
WILLIS: All right. Thank you for that, Poppy.
HARLOW: Sure.
VELSHI: My job makes me hungry. That wasn't an option there. That's why I didn't vote.
If you don't like your job, did you ever wish you could just start over with a new one -- a new talent or a new career? Well, wiping the slate clean and starting fresh might seem scary, but it can be done.
Check out what a one-time Hollywood publicist did to create a whole new career for herself. Here's Kareen Wynter.
(BEGIN VIDEOTAPE)
KAREEN WYNTER, CNN CORRESPONDENT: A glamorous lifestyle gone in a flash. A prominent Los Angeles publicist who enjoyed 13 years of success with some of tinseltown's top clients. But, despite concerns about the economy, Genevieve Ostrander decided to take a risk by switching careers.
GENEVIEVE OSTRANDER, OWNER, DELILAH BAKERY: It was like the biggest leap of faith.
WYNTER: The businesswoman who once had a six-figure salary says she soon fell behind in her bills, had no medical insurance, but decided to turn a life-long passion into a business. Baking pastries, cookies and cakes out of her home.
OSTRANDER: This is what I use to roll out the pie dough.
WYNTER: Her old 1950s oven couldn't keep up with the orders. So just a few months after this new venture ...
OSTRANDER: Delilah Bakery.
WYNTER: ... she opened Delilah Bakery.
OSTRANDER: Just that feeling of desperation -- it's just brought something out of me that gave me the energy and drive to get this little place going. WYNTER (on camera): And who would have thought a prominent publicist turned baker?
You're baking now.
OSTRANDER: I am, and I love it.
WYNTER (voice-over): Ostrander says many of her customers are surprised by her success story. But this L.A. economist says they shouldn't be since the slumping economy has forced many to make career changes.
JACK KYSER, CHIEF ECONOMIST: When the economy slows down, people are losing jobs. A lot of times you'll see people say, well, what the heck, I'm going to do something completely different. I'm going to take a risk and try to grab hold of that dream.
WYNTER: Economist, Jack Kyser, cautions this is a risky move with no guarantees, especially now. And that you would need to deliver a basic business plan, marketing strategy and a quality product.
OSTRANDER: See you next time. Bye-bye.
WYNTER: Genevieve Ostrander says there is no turning back. She works long days and only makes a fraction of her old salary. But she says life is sweet.
Kareen Wynter, CNN, Los Angeles.
(END VIDEOTAPE)
VELSHI: I kind of like this because these days in a tough economy, all we are hearing about in these jobs and unemployment days is about the bad news out there. But it really has caused us to look at some of the very, very interesting things that people are doing to actually either turn it around, or get themselves new jobs. There is an opportunity.
WILLIS: People change careers every day. They have high school careers. What was yours?
VELSHI: I played Dungeons and Dragons in high school.
WILLIS: All right. OK. You did, really?
(CROSSTALK)
WILLIS: For more idea, strategies and tips to save you money and protect your house, watch "Open House," Saturday at 9:30 a.m. Eastern, right here on CNN.
VELSHI: I wasn't all that square.
For more on how the news of the week affects your wallet, tune into "Your Money," Saturdays at 1:00 p.m. Eastern and Sundays at 3:00, right here on CNN.
WILLIS: ISSUE #1 will be back all next week, same time 12:00 p.m. Eastern, right here on CNN. In fact, all day Monday is issue No. 1 day on CNN.
VELSHI: Time now to get you up to speed on the latest headlines. "CNN NEWSROOM" with Don Lemon and Brianna Keilar starts right now.
