The 5-year mark: Unemployed are struggling with the new realities of the job market
This article first appeared in the St. Louis Beacon, Sept. 20, 2013: Five years after the financial crisis triggered massive job-letting across the nation, analysts say recovery in the jobs sector has been uneven -- just as it has been in the overall economy.
"A lot depends on who you work for and what your occupation is. You don’t see much of a recovery if you have traditionally worked in lower-skilled jobs, even those that pay relatively well. Those are the jobs that are either disappearing or companies just aren’t doing any hiring,’’ said Russ Signorino, a longtime St. Louis labor analyst. “If you don’t have the education or type of experience that employers are looking for, you are really having a tough time finding work that pays middle-income wages or higher. It’s difficult for a lot of people.”
The Great Recession officially began in December 2007 and ended in June 2009, but unemployment rates remain well above pre-recession levels. According to the Bureau of Labor Statistics at the U.S. Department of Labor, the national unemployment rate was 7.3 percent in August. While that is well below the peak — 10 percent in October 2010 — it is well above the 5 percent pre-recession unemployment rate.
In Illinois, the state unemployment rate was still 9.2 percent in August, slightly higher than a year ago; in Missouri, it was 7.2 percent, also up a bit from the same month last year. In the St. Louis area, unemployment was 7.9 percent in July.
An estimated 8 million jobs were lost during the recession, and Signorino noted that even with economic recovery many of those jobs simply won’t be coming back. Among the casualties in St. Louis were the kinds of manufacturing jobs that, due to decades of industrialization and unionization, offered middle-class incomes and standards of living.
"30.8 percent of the St. Louis area's 25-and-older population had a bachelor's degree or higher in 2012, not statistically different from 30.7 percent in 2011. Nationally, 31.2 percent had a bachelor's degree in 2012, up from 30.6 percent in 2011. The St. Louis area's 2012 and 2011 poverty rates were not statistically different from the respective rates for all U.S. metro areas." -- Census Bureau
"You did not have to have a college degree or a specific skill set to be able to go out and find a job to support your family,” he said. "You could find a manufacturing job, and as long as you had the physical ability to do the work you had an excellent chance of being able to make enough money to be considered in the middle class. You qualified for a pension and health care benefits. Thousands and thousands of those jobs have left the area.”
While some jobs were moved overseas, countless others have fallen victim to technology -- a trend in place when the recession began, he noted. Examples abound in manufacturing, such as at Anheuser-Busch where automated bottling lines mean fewer jobs. But computerization has also affected office jobs, including thousands of clerical positions over the past three decades. Just about every occupation has lost jobs to technology.
"Those skills were valued 25 or 30 years ago, and you were paid accordingly. Now, where do you go to find a job to make decent money?” he said.
The loss of thousands of traditional middle-income jobs has created a void for the unemployed who struggle to find jobs similar to the ones they lost — and who often take jobs at lower skill and pay levels.
"The widening gap of low-skill job pay and high-skill pay is wider now than it’s been in a long, long time,'' Signorino said.
Americans are still worried
These points are from a national survey by the Pew Research Center taken in early September.
• 40 percent of respondents said the job situation is the national economic issue that worries them most. Other worries: budget deficit (24 percent), rising prices (22 percent), condition of the financial and housing markets (10 percent.)
• Jobs have been the public’s top economic worry for three years.
• Nearly six-in-10 college graduates (58 percent) said the job situation has at least partially recovered, compared with just 42 percent of those with some college experience and 44 percent of those with no college experience.
The Great Recession’s toll
The following are from a report by the Bureau of Labor Statistics published in February 2012 that compared the Great Recession to nine previous recessions:
• The employment decline between December 2007 and June 2009 was greater than any recession of recent decades. Forty-seven months after the start of the recession that began in November 1973, employment was more than 7 percent higher than it had been when the recession started. But 47 months after the start of the Great Recession (November 2011), employment was still 4 percent lower than when the recession began.
• During the Great Recession, employers set a new high for mass layoff actions. There were 3,059 mass layoff actions in February 2009 involving 326,392 workers.
Jobs and the widening wealth gap
A recent analysis for The Associated Press found that:
• Five years after the financial crisis there is a wide gap in employment rates between the highest- and lowest-income families. The unemployment rate for families earning less than $20,000 was more than 21 percent; the unemployment rate for families earning more than $150,000 a year is 3.2 percent. That is considered full employment.
• The average length of unemployment for U.S. workers reached 39.5 weeks last year, the highest level since World War II. That length has since dropped to 36.5 weeks based on data from January to July, but remains relatively high historically.
Where are we now?
Americans must come to grips with the new realities of the job market, said Signorino who lost his own job as a labor analyst during the recession when the United Way of Greater St. Louis eliminated its research department.
"You can’t get comfortable. You must keep up with changes in your field that will affect your job,” said Signorino.
He advises workers to recognize that that while much is out of their hands -- mechanization, for example -- they do control their own decisions regarding their education and skills.
"You can’t depend on anybody or anything to take care of that for you. You can’t sit back and say 'I’m getting screwed because this industry’s going down the tubes.’ It’s going to happen everywhere. You have to be prepared to find another opportunity. And it’s not easy. Those of us who have gone through it know how hard it is,’’ said Signorino who is now executive director of the Gateway EITC Community Coalition, a nonprofit he helped establish while at the United Way. The group does free tax preparation for low- and moderate-income families.
The fact is, many local economies have changed, and the old rules of recovery no longer apply, he said.
“Thirty years ago, St. Louis had over 20,000 people working in the auto industry. And every year they would go through layoffs when they went through a new model changeover or there would be a recession, and they would be laid off for six months or a year,” he said. “But they were still earning decent incomes due to their union benefits, and they knew they were going to get called back when things got better. If that’s the economy you’re hoping to find a job in, it doesn’t exist anymore. And it doesn’t make any difference what industry you’re talking about, who’s in office, which party is in control -- that’s just not going to happen anymore.”
By the numbers: Employment in the aftermath
According to statistics from the Bureau of Labor Statistics:
• The jobless rate is down from 8.1 percent a year ago; the number of unemployed persons was 11.3 million in August.
• Total nonfarm payroll employment increased by 169,000 in August; the average monthly gain has been about 184,000 the past 12 months. Areas of job growth: retail trade and health care, food services and drinking places, professional and business services and wholesale trade.
• In August, the number of long-term unemployed, defined as jobless for 27 weeks or more, was unchanged at 4.3 million and accounted for 38 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 733,000.
• The number of people employed part time for economic reasons (involuntary part-time workers) declined by 334,000 to 7.9 million in August. They were working part time because their hours had been cut back or because they were unable to find a full-time job.
• In August, 2.3 million people were marginally attached to the labor force, down by 219,000 from a year earlier. They were not counted as unemployed because they had not searched for work in the four weeks preceding the survey. Among the marginally attached, there were 866,000 discouraged workers. Those are people not currently looking for work because they believe no jobs are available.
The 5-year mark: Snapshots of the recovery
This series of economic snapshots focuses on where the U.S. economy stands five years after the meltdown of some of the nation’s largest financial institutions.
To learn more, check out this Washington Post graphic that summarizes the major events of that harrowing week in September 2008.