Even in a Recovery, Some Jobs Won't Return

From Wall Street Journal | Jan 12, 2010

By JUSTIN LAHART

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Veterans and family members wait on line to attend a job fair Nov. 23, 2009, in New York City.

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.

Employment in Selected Industries

See how many jobs were gained or lost in selected industries from November 2007 to November 2009.

• 
  
  Video: Finding a Job in Uncertain Times
  

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."

Reshaping the Job Market

Read more profiles of workers in different industries.

Tim Winter

Tim Winters, Aspen, Colo. Age 39

Hotel Director Forced to Give Up Own Home

After
getting laid off in March from his job as operations director at a
small hotel, Tim Winters could no longer afford his $1,200 a month
apartment. He has been living at family members' homes, an ironic twist
for someone who often used to stay for free at hotels when he traveled.
"It takes a lot of understanding and time to get used to living with
other people again," says Mr. Winters, who started his career in
hospitality in 1996. Mr. Winters says he has applied for approximately
170 hotel-management positions and has had 14 interviews, but no job
offers yet.

Daryl Jones

Daryl Jones, Tulsa, Okla. Age 45

Economy Chips Away at Cabinet Maker's Business

Daryl
Jones misses the smiles that would appear on clients' faces after
receiving the one-of-a-kind cabinets, bedroom sets and other wood
furniture he built by hand while running his home-based business. But
sales plummeted in recent years, prompting the third-generation
craftsman to take a job building cabinets for corporate jets to make
ends meet. Still, Mr. Jones is optimistic that one day he will return
to his custom woodworking full time. "Once the economy bounces back and
people feel comfortable again spending money, then things will start
picking back up."

Jeff Walker

Jeff Walker Brighton, Mich. Age 53

Auto Industry Executive Goes Back to School

Jeff
Walker, a former auto industry executive, doesn't mind being among the
oldest students at Eastern Michigan University. "I'm happier than just
being unemployed and looking for a job," he says. In April, Mr. Walker
lost his job as a vice president of operations at a small auto
equipment supplier in Brighton, Mich., where he had worked for 22
years. Mr. Walker is studying technology management in pursuit of the
college degree he started but never finished after high school. Now, he
says, he just wants to "get out of manufacturing."

Duane Dittbrenner

Duane Dittbrenner, Cleburne, Texas Age 50

Veteran Trucker Worries About Paying the Bills

Duane
Dittbrenner was laid off last month from his job at Arrow Trucking Co.
He has been struggling to find another trucking job in the Dallas-Fort
Worth area. "Where I live, most of it is hazmat and tankers," says Mr.
Dittbrenner, who has hauled big rigs for the past 20 years throughout
the U.S. Mr. Dittbrenner says he is worried he won't be able to pay
next month's bills if a new job doesn't come along. "It's just getting
out there and pounding the pavement," he says. "I'll have one soon. All
you can do is be optimistic."

Michael Benabib

Debra Allicock, Brooklyn, N.Y. Age 42

Growing Demand, but Low Pay, for Home Health

Debra
Allicock migrated to New York from Guyana in 2000 and took a job as a
home-health aide, helping the elderly with errands, meals and light
housekeeping. She says the relationships she gains are what motivates
her to work 12-hour days despite low pay and no medical insurance. "You
get to get very close and attached with them," she says of her clients.
Ms. Allicock says her services are in high demand. "Why go to a nursing
home when you can stay in your home surrounded by everything you love?"
she says. "Maybe one day someone is going to return that favor for me."

Richard Hawthorne

Richard Hawthorne, Laguna Beach, Calif. Age 58

Real Estate Executive Tries a New Path

Richard
Hawthorne has been out of work since June 2007, when he was laid off
from a small commercial real estate investment firm where he was
director of development. "In past downturns I've done well, but this
downturn has me stumped," he says. Mr. Hawthorne enjoyed his more than
30 years in commercial real estate. "There was something new and
totally unpredictable each and every day to solve," he says. But now,
tired of being told he is overqualified for jobs in his field, he is
launching a business advising financial institutions on how to
eliminate investment property debt.

-- Interviews by Sarah E. Needleman

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