Quantcast
Home / Government / Millions of jobs may be gone forever

Millions of jobs may be gone forever

Erik Proulx, a former advertising copywriter, sits on the roof of a building where he maintains an office in Boston. Proulx said he no longer wants to rejoin an industry he thinks will continue to struggle. (AP Photo by Steven Senne)

Erik Proulx, a former advertising copywriter, sits on the roof of a building where he maintains an office in Boston. Proulx said he no longer wants to rejoin an industry he thinks will continue to struggle. (AP Photo by Steven Senne)

By Christopher S. Rugaber
AP Economics Writer

Washington (AP) — 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 say they 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.

In addition to retail, the manufacturing and advertising industries may never recover the jobs they lost.

Among those whose former jobs may be gone for good is 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.

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 levels before the recession 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 reported this month. It was the largest increase in 48 years, though most economists said that pace isn’t sustainable.

Still, Janet Yellen, president of the Federal Reserve Bank of San Francisco, said 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.”

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Leave a Reply

Your email address will not be published. Required fields are marked *

*