Obama to Visit Unemployment Capital, Promote Jobs

Aug. 5, 2009— -- President Obama plans to pay anorther visit today to Elkhart, Ind. -- a city that has become a poster child for the nation's unemployment problem -- to speak about the economy and warn the public that it will take some time for jobs to return.

The president visited Elkhart back in February as part of a tour to gain public support for the $787 billion stimulus plan that eventually passed Congress. This trip will focus on "some innovative ways" that can address creating jobs over the long term, according to Obama's press secretary Robert Gibbs.

A year ago, this northern Indiana community was prospering. At the start of the recession in December 2007, unemployment in Elkhart and the surrounding area was just 4.8 percent. But things quickly fell apart in the city. Several big recreational vehicle manufacturers slashed jobs. Then their suppliers followed with layoffs.

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By the time Obama visited in February unemployment had skyrocketed to 18 percent, according to the Bureau of Labor Statistics. That means that nearly one out of every five people who wanted to work couldn't find a job.

Unemployment has improved marginally, with 16.8 percent of the population unemployed and looking for work in June, although that may not reflect all the people who don't have jobs, because often people will give up searching after a year.

The only place to see a worse jump now is Kokomo, Ind., about a two-hour drive south. Unemployment there has jumped from 7.4 percent in June of 2008 to 19.2 percent this June.

The highest unemployment in the nation right now is in El Centro, Calif., at 27.5 percent, but that city's job market has long suffered even when the rest of the economy was growing.

The nation's unemployment rate was at 9.5 percent in June and is expected to top 10 percent by the end of the year. Even as other parts of the economy, from the stock market to the housing market, are starting to show signs of recovery, economists say unemployment will continue to climb.

Obama Speaks About Jobs

The president plans to bring his message today from an RV factory, an industry that was important to Elkhart's economy but that was hard hit by the recession.

"It is going to take some time to move away from where we are, to get our economy back on track," Gibbs said. "The president won't be satisfied until we're creating jobs."

In Elkhart, one of the first -- and most noticeable -- signs of the recession was seen on the heads of many men who started putting off haircuts to save a few bucks.

In response, a group of barbershops in the fall started offering discounts to the unemployed.

"I've been a barber for 41 years in Elkhart," said Lowell Thomas, owner of Lowell's Barber Shop. "After all those years, those people have helped me enough and kept me in business that it's time for me to give something back to them when they need it."

Haircuts at his shop normally cost $13. In the fall, on Wednesdays, anybody who had lost a job could get one for $8.

But he too is feeling the squeeze. Most residents have stretched out the time between haircuts from about three weeks to more than five, and Thomas said his business is down 20 percent.

"A lot of people are embarrassed to ask. So when they call up and ask how much my haircuts are, I ask them if they are unemployed," Thomas said. "It's not much but it might give a family a little bit extra for Christmas. Five bucks is five bucks anyway you look at it."

When Obama visited Elkhart in February, its residents were eager to hear what he had to say. They snapped up tickets to the event in just 40 minutes.

Ed Neufeldt, who lost his job with RV manufacturer Monaco Coach Sept. 17, got the privilege of introducing Obama.

"Our plant just closed down," Neufeldt told ABC News in the fall, before he was picked to introduce the president. "They just closed the doors.

"We were one of the big corporations around the area. The building was one of the biggest buildings in northern Indiana," he said. "When it shut down, it was a big shock to everyone."

ABC News' Sunlen Miller contributed to this report.