Erik Proulx, a former advertising copywriter, is seen on the roof of an office building where he maintains an office in Boston. Proulx says he no longer wants to rejoin an industry he thinks will continue to struggle. (AP Photo/Steven Senne)
Associated Press | Fewer construction workers will be needed.
Don’t expect as many interior designers or advertising copywriters, either. Retailers will get by with leaner staffs. The economy is strengthening. But millions of jobs lost in the recession could be gone for good.
And unlike in past recessions, jobs in the beleaguered manufacturing sector 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.
It means that even as the economy strengthens, more Americans could face years out of work. Already, the percentage of the labor force unemployed for six months or longer is 4.3 percent. That’s the highest rate on records dating to 1948.
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.
Among those whose former jobs may be gone for good are:
- Julie Weber of Milwaukee, who designed office cubicles for nearly seven years. She lost her job about a year ago. Since then, she’s been able to find only part-time work outside her field. Interior design was hammered by the real estate downturn. “My hope for getting back into the industry is not very high,” says Weber, 29.
- Erik Proulx, 38, a former advertising copywriter in Boston, who 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.
- Louis DiFilippo, 30, who decided to study information technology after losing his job managing a gourmet food store in Washington, D.C. After six months of unemployment, he embraced a career with more stability. He now works on computer network security for the Navy. “I’m much happier now,” he said.
More than one-third of chief financial officers at 620 big companies surveyed in March by Duke University and CFO magazine said they didn’t expect to restore their payrolls to pre-recession levels for at least three years. Nearly all cited higher productivity and tepid consumer spending.
“Companies have just figured out, ‘We didn’t want to fire people’ but now that they’re gone, we’ve realized that we can get by without them,”‘ said John Graham, a Duke finance professor who directed the survey.
Productivity grew at an annual rate of 6.3 percent in the year ending in March, the Labor Department said this month. It was the largest increase in 48 years, though most economists think that pace isn’t sustainable.
In the long run, more productive workers raise standards of living: Companies can pay more without inflating prices. But in the short run, high productivity delays hiring.
U.S. employers did add 290,000 jobs in April. The unemployment rate rose to 9.9 percent, though, because 805,000 people without jobs poured into the labor force to seek work.
Three industries, in particular, where many jobs may not be coming back are retailing, manufacturing and advertising.
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, since the recession began. 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, 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.
In addition, a consolidated airline industry has shed layers of jobs that won’t likely return. Delta Air Lines earlier this year spread out departure times for flights from its Cincinnati hub, rather than bunching them at peak travel times. That way, it could operate from one concourse rather than two, said Kent Landers, a spokesman. The change allowed Delta to cut more than 700 baggage handling and other ground services jobs.
More than half the 15.3 million people out of work in April said they regard their layoff as permanent, the Labor Department said. That’s the highest proportion on records dating to 1967. In previous recessions, workers often endured only temporary layoffs: Their employers would recall them once business picked up.
Caterpillar Inc. has resumed hiring after laying off 19,000 full-time workers during the recession, thanks to rising demand for its construction and mining equipment. But most of the new jobs will be overseas. Of the 9,000 hires CEO Jim Owens said Caterpillar plans to make this year, only 3,000 will be in the U.S.
Many economists say eventually, companies won’t be able to squeeze any more work out of their employees. That would force employers to step up hiring.
But Janet Yellen, president of the Federal Reserve Bank of San Francisco, cautions that this won’t happen anytime soon. She believes corporate America remains in the early stages of a drive for greater efficiencies.
“We may be in store for … high productivity growth for some time,” she said in a speech this year. “If so, the rate of job creation will be frustratingly slow.”
if we stopped breeding so much, this wouldn’t be an issue. think about your precious children panhandling on the side of the road because s/he won’t have a job in 20 years. imagine how much competition there will be at that time.
“Designed office cubicles”???
I’m amazed that job ever existed, much less for 7 years. Didn’t a “Dilbert” character do that?
Kim, let me guess…you can’t get a date if you tried.
Sorry for the double-post, not sure what happened there
Now only if our government could realize the same thing that private companies have done and can do more with less. There are thousands of workers and positions within all governmental agencies that are a waste and could be eliminated.
Aaah. one more reason to say America will destroy itself. how many wars and we will self destruct with no bullet fired. Just our own corporate greed
I’m sure some mental-midget bottom feeders will somehow conjure up some way to blame the government for this. So goes when you don’t have a clue. But on that same note, you read comments on these blogs, and it really makes one wonder just how employable most of these people are anyway.
LOL, Sorry, Kim, they won’t be panhandling on the “side of the road” if it’s Chicago; they’ll most likely be carjacking.
But seriously, this “recession / depression” is a 10 year deal.
We’re 2 years in, with 8 to go, so people had better get used to it.
The last time anything like this happened was back in the early 1970’s and we didn’t pull out of that until 1981-2.
There’s nothing on the horizon that bodes well for the economy or employment.
Cap and Trade, Health care, Value Added Taxes, higher income and capital gains taxes, expiring tax cuts, the list goes on.
Not to mention the states are not only broke, but in debt, so THEY’LL have to raise taxes as well.
Even if employment were to come back, you have a majority of people who have no disposable income and no credit, but lots of debt.
It’s going to be a long 8 years.
Mike, she couldn’t get a date if she paid for it! I don’t know, she may be a lovely woman but her post is beyond stupid. Another way for the most self centered, selfish, & myopic to make an excuse for their pathetic existence. She’s not going to have kids, & fewer people should, for the sake of and well being of kids? Just b/c there are fewer people competing for a job doesn’t mean there are more jobs.
Yo, Kim, I’m betting the following as it relates to you:
-You own six cats, multiple Susan Brownmiller books and know the 15th word on page 293 from “Men are From Venus” by rote memory.
-You look like a certain Supreme Court nominee whose procreative propensities are currently being debated, thus rendering moot your personal contribution to the very problem/solution you describe in your post.
Good grief, to think that one truly believes this a panacea to the current situation. Let me guess, it’s George Bush’s fault that no dude will look cross-eyed at you.
It is worth noting that manufacturing jobs that have been added to our economy have come from an unlikely source – car makers who were previously known as “foreign”. Kia just opened up a plant in Georgia that will produce 300,000 cars per year. Add this to the Toyota, Honda and Mitsubishi facilities that are on the ground and ask yourself why our “American” manufacturers go outside the country.
It is also important to remember that these companies are not just here – they are profitable here. This country’s best opportunity to recover rests with manufacturing – achieve competitive edge and bring it back. The foreign transplant manufacturers’ business models are there for anyone to see. The most remarkable thing about them is that they are unencumbered by America’s manufacturing mentality.
The real problem, now that I think of it, is the decline in appreciation for Classical Opera. Yeah, that’s it. Few people seem to appreciate, and need, the castrates that played instrumental roles in Mozart, Puccini, Verdi, et. al. operas. Hence, those with creative organs, males especially, tend to over copulate, which causes the birth of many people competing for my coveted job at Jimmy Johns and Route 41 Adult Bookstore, where I manage the Ron Jeremy section. Actually, the real problem is that, prior to Obama, I could not afford a urologist to take care of my creative organ problem, or the fact that I still have one. Now that he is going to ensure me and my 23 children with 14 different wives, I can finally get me that castration for which the wife (#8) has been pining. Trouble is, in 20 years, I pray that there is some kid to take over the rail at my Jimmy Johns because I make an awesome sub for all the folks that, post Obama, now can spend their WIC benefits on them. Yeah, it’s George Bush’s fault that Obama can now allow me to get my nuts cut off.
I agree with Kim, there are too many people on the planet and we do not need any more.
You know a recession is ending when the media starts with the “jobless recovery” stories. This is going like clockwork.
“kim | May 13, 2010 12:47 PM | Reply
if we stopped breeding so much, this wouldn’t be an issue. think about your precious children panhandling on the side of the road because s/he won’t have a job in 20 years. imagine how much competition there will be at that time. ”
Kim,
Are you on the internet again? I told you to fix your bed in the basement and find a job. It is not normal for a 40-something woman to be hiding in her parents’ basement.
Mommy
Increased productivity = more overtime for exempt employees. You’ll see the jobs come back when the exempt employees start burning out after years of uncompensated overtime.
See, socialism DOES work for those of us here on the ground. And our messiah will save everything by growing government even bigger, just like Greece.
Hi- My name is Jane and I worked for one of the largest insurance brokers in the chicagoland area and they sent my job overseas to India. Nice huh?!
I have searched high and low for a new job but everything being offered is not even 50% of what I made before.
JimboVegas – the most remarkable AND PROFITABLE thing(s) about those car companies are that they are not saddled with union unwarranted salaries, ridiculous benefit packages, and obscene retirement deals. Same problem with the layed off teachers. Tell me again how does it encourage continued effort to improve when your job is guaranteed for life?
JimboVegas – the most remarkable AND PROFITABLE thing(s) about those car companies are that they are not saddled with union unwarranted salaries, ridiculous benefit packages, and obscene retirement deals. Same problem with the layed off teachers. Tell me again how does it encourage continued effort to improve when your job is guaranteed for life?
go to keep those ceo bonuses coming. with all the violence in the world how is it that no one has whacked an executive just for the hell of it.
Someone has to design them, you know?
What is everyone’s problem with Kim? She is right.
Look at inner city problems–there are no jobs there, and kids get pumped out at an alarming rate and have nothing to do.
More people are going to college than ever; meanwhile, opportunities are shrinking. The microcosmic specializations of so many of these graduates ensure they will never get jobs in their fields.
How about doing some critical thinking instead of insulting a person who possesses a viewpoint you’re not capable of comprehending?
Again, Kim is right.
Perhaps our rising poplulation has more to do with the influx of our new peasant class – the illegal immigrants from the south. The Hispanic poplulation is the fastest growing in the US
Don’t believe anything you read from the state-run Associated Press.
you read comments on these blogs, and it really makes one wonder just how employable most of these people are anyway.
^
This.
Companies are not interested in hiring in the current environment of multi-trillion dollar government debt. They know that this will eventually lead to more taxes and restrictions on business. Nobody wants to even spend money in this environment. Government and congress have the power to do something about this, but they don’t want to. We’re in for some dreary times ahead.
Since the birth rates in most industrialized nations have been dropping steadily for years (one of the myriad reasons Greece is in trouble-not enough “earners” to support the aging population), i assume you are referring to third world nations and not the U.S. which is what this article is really talking about….of course, having 12-20 million illegal immigrants who tend to have higher per capita per rates won’t help much either. But, then, that is racist in the New Society.
Funny how efficiency and lean workforces work in the private sector, but not in government. Healthcare reform alone will create thousands of government jobs…the only growth industry in this country now.
We won’t need to wait 20 years. If we maintain our current pace, we will, as a nation, be buried in debt. The only way out will be a world war over global debt. Eventually, our creditors are going to be calling for margin and we won’t have the money to pay them. They’ll demand our country and we’ll fight to protect it, thus triggering a global conflict. Greece is already there and the best that the IMF & Euro community could do was to restructure their debt. How much further is the US behind?
Stop woorying about 20 years from now. It’s too far out. 2012 is looking pretty scary as it is.
If Kim is right, she must really hate Bill Gates!! He is spending $1 billion a year to save 8 million people from dying of easily treated diseases. It sounded so nice at first, but think about it. 8 million more people each year and as they grow up, having children, then grandchildren. More food and fresh water are needed. More housing and jobs are needed. So many more will suffer because of Gates. The poor Earth will suffer.
Just another story to get you used to the new Obama economy of mediocracy making the US a 2nd rate country.
“kim | May 13, 2010 12:47 PM | Reply
if we stopped breeding so much, this wouldn’t be an issue. think about your precious children panhandling on the side of the road because s/he won’t have a job in 20 years. imagine how much competition there will be at that time.”
Right on Kim! I guess we can start the blame game with your own parents. It’s too easy for you to sit there and blame everyone else.
Dont worry Kim… I will breed with you..
A year from now (maybe less) the Trib will be carrying articles about how the Great Recession downsizing has stressed out all the workers who still have jobs.
Each jobholder is now doing the work of 1.5 to 2 people. We’ll read about absenteeism, substance abuse, etc., among those who kept their jobs.
Kim, I love Thomas Malthus too, and the thought of you makes me grow not arithmetically but exponentially in all the right places. Heck, when City Guy is done with you, ring me up. I been shooting blanks since 1989.
THANKS OBAMA !!!
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