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Jobs that won't come back

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Even in a Recovery, Some Jobs Won't Return

by Justin Lahart

Tuesday, January 12, 2010

The Wall Street Journal

 

Even when the U.S. labor market finally starts adding more workers than it loses, many of the unemployed will find that the types of jobs they once had simply don't exist anymore.

 

The downturn that started in December 2007 delivered a body blow to U.S. workers. In two years, the economy shed 7.2 million jobs, pushing the jobless rate from 5% to 10%, according to the Labor Department. The severity of the recession is reshaping the labor market. Some lost jobs will come back. But some are gone forever, going the way of typewriter repairmen and streetcar operators.

 

Many of the jobs created by the booms in the housing and credit markets, for example, have likely been permanently erased by the subsequent bust.

 

"The tremendous amount of economic activity associated with housing, I can't see that coming back," says Harvard University economist Lawrence Katz. "That was a very unhealthy part of the economy."

 

Unhealthy but a boon for men without a college education. One in three jobs, or six million total, have been lost in the manufacturing sector since 1997, the last year the sector posted job gains. The upsurge in construction jobs accompanying the housing boom provided these workers in manufacturing with an opportunity to earn decent wages.

 

Now that door, too, has shut. With 1.6 million jobs lost over the last two years, the construction sector has accounted for more than a fifth of the jobs lost since the recession began.

 

For more highly educated workers, finance may no longer offer as many high-paying jobs as it has in the past. Thomas Philippon, an economist at New York University's Stern School of Business, estimates that the financial sector's share of the economy was nearly 20% larger than it should have been. Since the start of the recession, the financial sector has lost 548,000 jobs, or 6.6% of its work force. Mr. Philippon's estimate suggests there will be further pressure on financial jobs.

 

In other areas of the labor market, the recession accelerated job losses that were probably coming anyway. In November, there were 36% fewer people working in record shops than two years earlier, according to the Labor Department. There were 23% fewer people working at directory and mailing list publishers, and 46% fewer at photofinishing establishments. Those are jobs that, with the advent of mp3 recordings, Google and digital photography, were likely disappearing anyway.

 

But as the recession hurt already ailing businesses, workers were forced into a sudden adjustment rather than the gradual one they would have otherwise faced. The recession also provided companies with an opportunity to cut jobs no longer as critical as they once were. That may be particularly true of the secretaries and mailroom clerks that advances in information technology have made less necessary. The ranks of people doing office and administrative work have fallen 10.1% since the recession began.

 

"Those are the production jobs of the information age, and they're being to a substantial extent automated," says Massachusetts Institute of Technology economist David Autor.

 

The permanent loss of many jobs may keep the labor market from fully recovering for a long time to come.

 

Prior to the 1990s, jobs rebounded quickly once recessions ended. Payrolls fell by nearly three million in the deep downturn that extended from July 1981 to November 1982. But by the start of 1983, the economy was creating jobs again, and by the end of 1983, the U.S. job count had exceeded its old peak.

 

That was because more of the job losses were essentially temporary, with manufacturers and the like letting workers go with the implicit expectation that they would be hiring them back once the worst was over.

 

But since the early 1990s, jobs have been slower to recover from recession. After the 2001 downturn ended, job losses continued for nearly two years. It wasn't until 2005 that the job count returned to its prerecession high.

 

Productivity-enhancing technology and competition from low-wage countries like China made more job losses permanent. And it took time for new jobs to be created and for workers to acquire the skills needed to do them. In the wake of a far deeper recession, creating new jobs and retraining workers to do them could take even longer.

 

It is anyone's guess what those jobs will be. The Labor Department has done little more than extrapolate from recent trends. It expects growth in areas like health care, which has been one of the few bright spots. Given the exigencies of an aging population, that seems a fair bet.

 

One could also make the case that the U.S. is shifting from a consumer nation to a nation of producers, and that will lead to a resurgence in technology and high-tech manufacturing jobs.

 

But Harvard's Mr. Katz warns that past experience suggests such conjecture is likely fruitless. "One thing we've learned is that when we attempt to forecast jobs 10 or 15 years out, we don't even get the categories right," he says.

 

Write to Justin Lahart at justin.lahart@wsj.com

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View PostSad, but true. I've been saying all along that I think this will be a jobless recovery.

 

 

View PostWe need to bring manufacturing back here.

 

Will be tough to do, with unions killing everything that moves and costly regulations that sends jobs overseas.

 

 

Right.

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"Will be tough to do, with unions killing everything that moves and costly regulations that sends jobs overseas."

 

Add to that slave labor competition and the fact that many of the raw materials used in manufacturing are now made in those same slave labor countries..... It would be a painful/high tension process but one I think we should be willing as a country to do..... We can't win on every front but we should be able to balance things out more. Right now manufacturing jobs were bled off faster than a slit wrist......There ain't much left at this point and the body is about to close it's eyes for good....

 

John

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at some point i think the great equalizer with respect to slave wages is rising energy prices.

 

when oil spiked to over $100/bbl in 2008, the economics of shipping stuff to the U.S. didn't work out so well.

 

strangely, in this way, high energy prices may be good for manufacturing jobs here.

 

if we have any money left over to buy stuff, that is.

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View PostWe need to bring manufacturing back here.

 

 

Will be tough to do, with unions killing everything that moves and costly regulations that sends jobs overseas.

 

View PostRight.

 

Kinda'....... Unions have been a 'Ball and Shackle' for sure, but, the 'biggest' enemy of domestic manufacturing is 'John Q. Public'. As long as he is willing to beat down the 'doors' to acquire cheap cheep 'goods', shop at the 'Walmarts' and such, the 'Fat Lady' will keep on singing.

 

 

Now before anyone jumps in defending Walmart, notice I have not mentioned 'China'.

 

 

What you should do is sit down and have a few Beers with someone who has 'experienced' a Manufacturing relationship with Walmart. Once 'she' Wines and Dines you, and you head off to her 'Boudoir', thinking this sexy young thing is gonna' take your Company 'places'. Well, once 'she' locks the Door, and pulls off that little Negligee that got you Heart all a thumpin', you discover a 'package' that makes a Blue Whale jealous. Now you think, if you stop long enough to get the Door open, you'll get raped, so you figure to dance around the room and wear her out. Except she's done this before, and knows she only has to wait for you to get 'tired' and she has you. Once she's 'done' with you, she moves on to the 'next' victim......

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View PostKinda'....... Unions have been a 'Ball and Shackle' for sure, but, the 'biggest' enemy of domestic manufacturing is 'John Q. Public'. As long as he is willing to beat down the 'doors' to acquire cheap cheep 'goods', shop at the 'Walmarts' and such, the 'Fat Lady' will keep on singing.

 

Now before anyone jumps in defending Walmart, notice I have not mentioned 'China'.

 

What you should do is sit down and have a few Beers with someone who has 'experienced' a Manufacturing relationship with Walmart. Once 'she' Wines and Dines you, and you head off to her 'Boudoir', thinking this sexy young thing is gonna' take your Company 'places'. Well, once 'she' locks the Door, and pulls off that little Negligee that got you Heart all a thumpin', you discover a 'package' that makes a Blue Whale jealous. Now you think, if you stop long enough to get the Door open, you'll get raped, so you figure to dance around the room and wear her out. Except she's done this before, and knows she only has to wait for you to get 'tired' and she has you. Once she's 'done' with you, she moves on to the 'next' victim......

 

 

Never heard it put quite that way before.

 

Well done.

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there are plenty of things (durable goods) we could make here that aren't sold at your local wally world.

 

wally world beating up vendors with its distribution muscle is ... business.

 

watching our economy be so service-heavy is just plain ... not healthy.

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You're right 'weewee', what the 'Walmarts' do is 'Business', and a service-heavy economy is not healthy. But, how do you 'protect' someone, (John Q. Public) from themselves? The 'Public' complains about the 'loss' of Manufacturing Jobs, but then turns around and rewards the 'Walmarts' for their 'actions' by patronizing their establishments.

 

'We the people' are our 'own' worst enemy when it comes to employment and politics.

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When I read a couple years ago that housing/building and related industries ahd become 60 pct of the increase in GDP for the past decade it made me realize how much of a house of cards we'd built. Cheap money to promote homeownership, more building, all made policy makers look good- until the house of cards collapsed.

 

Those jobs aren't coming back either.

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create incentives (and remove disincentives) for manufacturing job growth.

 

*put a leash on unions in non-right-to-work states.

 

*streamline some of the federal regulation that hinders job growth here.

 

*incentivize people to save and invest (with these stupidly low interest rates, nobody has an incentive to save). consumer savings = potential funds for investment in productive manufacturing capacity here.

 

and so on.

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View Postthere are plenty of things (durable goods) we could make here that aren't sold at your local wally world.

 

wally world beating up vendors with its distribution muscle is ... business.

 

watching our economy be so service-heavy is just plain ... not healthy.

 

 

Yes, just business, but it does shape our economy. Walmart beat the poo out of domestic producers while it had the buy America program going. Jobs disappered quickly once they dropped that in favor of cheaper origination. A lot of these jobs just weren't ever going to pay much without protection and there just hasn't been an environment for that in a long time.

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people like to beat up on wal-mart for its apparent dominance in our everday lives ... but seriously, if we had more high-paying manufacturing jobs here, we wouldn't be b*itching so much.

 

unskilled manufacturing jobs pay a lot more than menial service jobs.

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