Posted on 05/16/2010 5:15:54 AM PDT by Diana in Wisconsin
Many of the jobs lost during the recession are not coming back.
Period.
For the past two years, the weak economy has provided an opportunity for employers to do what they would have done inevitably anyway -- dismiss millions of people such as file clerks, ticket agents, autoworkers, interior designers and advertising copywriters, who have become displaced by technological advances, international trade and broader shifts in the economy.
The eventual phasing out of these positions might have been accomplished through less painful means such as attrition, buyouts or more incremental layoffs. Because of the Great Recession, winter came early.
The tough environment has been especially disorienting for older and more experienced workers such as Cynthia Norton, 52, an unemployed administrative assistant in Jacksonville.
"I know I'm good at this," said Norton. "So how the hell did I end up here?"
Administrative work has always been Norton's "calling," she said, ever since she started work as an assistant for her aunt at 16, back when the uniform was a light blue polyester suit and a neckerchief. In the ensuing decades she has filed, typed and answered phones for just about every breed of business, from a law firm to a strip club.
But since she was laid off from an insurance company two years ago, no one seems to need her well-honed office know-how.
Unlike past recessions
Norton is one of 1.7 million Americans who were employed in clerical and administrative positions when the recession began, but were no longer working in that occupation by the end of last year. There have also been outsized job losses in other occupational categories that seem unlikely to be revived during the economic recovery. The number of printing machine operators, for example, was nearly halved from the fourth quarter of 2007 to the fourth quarter of 2009. The number of people employed as travel agents fell by 40 percent.
And unlike in past recessions, jobs in such beleaguered sectors as manufacturing, retailing and advertising aren't the only ones likely lost forever. What sets the Great Recession apart is the variety of jobs that may not return.
That helps explain why economists think it will take at least five years for the economy to regain the 8.2 million jobs wiped out by the recession -- longer than in any other recovery since World War II.
Behind the trend are the cutbacks businesses made in the recession to make up for a loss of customers. To sustain earnings, they became more productive. They found ways to produce the same level of goods or services with fewer workers. Automation, global competition and technological efficiencies helped solidify the trend.
Diminished home equity and investment accounts have made shoppers more cautious, too. And their frugality could endure well into the recovery. That's why fewer retail workers, among others, will likely be needed.
Retailers have lost 1.2 million, or 7.5 percent, of jobs that existed before the recession, according to Labor Department data. Circuit City and Linens & Things have collapsed. Starbucks closed nearly 800 U.S. stores. Robert Yerex, an economist at Kronos, a work force management company, estimates 20 percent of those jobs are never coming back.
Manufacturing has shed 2.1 million jobs, or 16 percent of its total. Goodyear Tire & Rubber and Boeing Co. laid off a combined 15,700 people during the recession. General Motors eliminated 65,000 through buyouts and layoffs. And as Americans buy fewer cars and homes, more than 1 million jobs in the auto, steel, furniture and other manufacturing industries won't return or will be shifted overseas, according to estimates by Moody's Analytics.
Advertising and PR agencies have lost 65,000 jobs, or about 14 percent of the pre-recession total. Moody's Analytics estimates those industries will lose even more within five years.
Erik Proulx, 38, a former advertising copywriter in Boston, finds more companies are turning to social media and viral marketing and are less drawn to agencies that focus on traditional TV and print ad campaigns. Proulx was laid off in October 2008 -- the third time an employer had cut his position or had closed. He no longer wants to rejoin the industry. Proulx has started a blog to help other unemployed ad professionals network.
Pruning inefficiencies
Though personally painful, this "creative destruction" in the job market can benefit the economy.
Pruning relatively less-efficient employees such as clerks and travel agents, whose work can be done more cheaply by computers or workers abroad, makes American businesses more efficient. Year over year, productivity growth was at its highest level in more than 50 years last quarter, pushing corporate profits to record highs and helping the economy grow.
But a huge group of people is being left out of the party.
Millions of workers who have already been unemployed for months, if not years, will most likely remain that way even as the overall job market continues to improve, economists say. The occupations they worked in, and the skills they possess, are never coming back in style. And the demand for new types of skills moves a lot more quickly than workers -- especially older and less mobile workers -- are able to retrain and gain those skills.
There is no easy policy solution for helping the people left behind. The usual unemployment measures -- such as jobless benefits and food stamps -- can serve as temporary palliatives, but they cannot make workers' skills relevant again.
Norton has sent out hundreds of resumes without luck. Twice, the openings she interviewed for were eliminated by employers who decided, upon further reflection, that redistributing administrative tasks among existing employees made more sense than replacing the outgoing secretary.
One employer decided this shortly after Norton had already started showing up for work.
Norton is reluctant to believe that her three decades of experience and her typing talents, up to 120 words a minute, are now obsolete. So she looks for other explanations.
Employers, she thinks, fear she will be disloyal and jump ship for a higher-paying job as soon as one comes along. Sometimes she blames the bad economy in her hometown of Jacksonville, Fla. Sometimes she sees age discrimination. Sometimes she thinks the problem is that she has not been able to afford a haircut in awhile.
But offices, not just in Jacksonville but all over the country, have found that life without a secretary or filing clerk -- which they may have begun somewhat reluctantly when economic pressures demanded it -- is actually pretty manageable.
After all, the office environment is more automated and digitized than ever. Many bosses can handle their own calendars, travel arrangements and files through their own computers and increasingly ubiquitous BlackBerrys. In many offices, voice mail systems and doorbells -- not receptionists -- greet callers and visitors.
And so, even when orders pick up, many of the newly de-clerked and un-secretaried may not recall their laid-off assistants. At the very least, any assistants they do hire will probably be younger people with different skills.
Economists have seen this type of structural change, which happens over the long term but is accelerated by a downturn, many times before.
"This always happens in recessions," said John Schmitt, a senior economist with the Center for Economic and Policy Research. "Employers see them as an opportunity to clean house and then get ready for the next big move in the labor market. Or in the product market, as well."
Economists such as Erica Groshen at the Federal Reserve Bank of New York have argued that bigger structural job losses help explain why the last two economic recoveries were jobless -- that is, why job expansion lagged far behind overall growth.
A split in the labor pool
But there is reason to think restructuring may take a bigger toll this time around. The percentage of unemployed workers who were permanently let go (and so will not be recalled by their former employers) has hovered at a record high of more than 50 percent for several months.
Additionally, the unemployment numbers show a notable split in the labor pool, with most unemployed workers finding jobs after a relatively short period of time, but a sizable chunk of the labor force unable to find new work even after months or years of searching. This group -- comprising generally older workers -- has pulled up the average length of time that a current worker has been unemployed to a record high of 33 weeks as of April. The percentage of unemployed people who have been looking for jobs for more than six months is at 45.9 percent, the highest in at least six decades.
And so the question is what kinds of policy responses can help workers such as Norton who are falling further and further behind in the economic recovery and are at risk of falling out of the middle class.
Norton has spent most of the past two years working part time as a Walmart cashier, bringing home about a third of what she had earned as an administrative assistant. Besides the hit to her pocketbook, she grew frustrated that the work has not tapped her full potential.
Because of the Walmart job, she has been ineligible for unemployment benefits, and she says she made too much money to qualify for food stamps or Medicaid last year.
The White House has publicly challenged the idea that structural unemployment is a big problem, with Christina Romer, the Council of Economic Advisers chairwoman, instead emphasizing that stronger economic growth is what's needed. Still, the administration has allocated dollars for retraining in both the 2009 stimulus package and other legislation, largely for clean technology jobs.
I think things are going to get very bad, and stay that way for a long time. *SIGH*
How much value are there in skills that become “obsolete” in less than 2 years?
And in other news, the Pope is Catholic and the bear s__ts in the woods.
Of course people with obsolete skills struggle in a down economy. Like it or not, everyone has to constantly keep their skills up and, if they lose their jobs, take jobs at lesser pay until they build their skills up again. That’s the way the economy works. The problem is when people can make a choice to remain unemployed rather than take a job in an area that is outside their skill set. That is what prolongs the recession.
Ah, this has been true for the last 200,000 years. This is news?
Not a lot. I pity the over-educated d@mn fools out there with their ‘Humanities’ degrees though. There are a lot of people on both ends of the spectrum that can’t find jobs.
This just shows that even if people THOUGHT their skills sets were going to carry them through to the finish line, they may not.
I’ve always believed in multiple streams of income. When one dries up for me, the others keep me afloat until the well is full again. ;)
I’ll be fifty this year. *CRINGE* I’d like to leave my job right now (even though I love it) but I dare not at this time in our history. Heck, the way things are going, I’ll be hanging on until the bitter end...
Those of us with ‘obsolete’ skills, such as basic farming/gardening, and basic handyman skills, will never starve....
Unlike those whose skill-set is limited to ‘texting’.....
Amen, Uncle Ike, Amen! Going out to pick fresh radishes, herbs, lettuce and spinach from the garden now...baked rhubarb pies last night. :)
It sounds like the types of jobs being eliminated in private businesses are the same type of jobs that the governments, local through federal, are larded up with, at 50% higher costs. Their time is coming; some political coalition will come together to scrub them out.
Read “Aftershock” by David Wiedemer. “This is NOT the recession of the late 70’s” This one is “bigger, badder, deeper”. Jobs impact will happen in the following order. 1- The “Capital Goods Sector” (cars, construction etc) 2- The “Discretionary Spending Sector (fine dining, entertainment, travel, high fashio etc) and 3- The “Necessities Sector” (basic food, shelter, clothing, energy etc) The only stable, but low paying, jobs available will be in 3- Necessities.
I was always facinated in how a person could make a living as an “elevator operator”. “Second floor please”. Easy. They didn’t just curl up and die though. They honed new skills. Or whatever that was.
” Going out to pick fresh radishes, herbs, lettuce and spinach from the garden now. “
Wow - I’m envious... We’ve had a particularly long and cold winter here in Southern NM — I’ve got radishes and spinach and turnips and peas to grow (but nowhere near ready to harvest yet..), but late frosts (would you believe last week??) have got everything else acting pretty neurotic...
(Note: I work in IT on a contract for the Federal government, but for a private company.)
I know
Business is lousy at the neighborhood 8-track Repair and VCR Shop
LOL....thanks for that laugh!
For some reason I can’t seem to get my electric typewriter repaired....
The good news is that Ms Norton finally got out of her rut. She found a job at Walmart. The rut mentality must be eradicated before there can be change. One can only wonder what she expects to type at 120 words per minute.
Everybody types now and even those of us that don’t do it well would never rely on someone else to do it for us. To succeed, those who have lost jobs must abandon the past and seek that which is new and required.
I’ve read it. Highly recommended. :)
We had a cold snap week before last, too. I manage a garden center, and I lost some flats of tomatoes and peppers...but there’s plenty more to come!
I was able to get early crops in back in March when we had some glorious weather. Then April was cold. Now May is wet...but improving. :)
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One word: Unions
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