Lots of people are looking for “green shoots”, signs of a recovering economy. But McClatchy’s article from last Sunday suggests a genuine recovery is a distant dream.
While signs indicate that the worst of the recession may be over, only six metropolitan areas across the country are expected to regain their pre-recession employment levels by the end of 2009, according to projections from IHS Global Insight, a leading economic forecaster.
The areas poised for a jobs rebound later this year are: Anchorage, Alaska; Champaign-Urbana, Ill.; Coeur d’Alene, Idaho; Columbia, Mo.; Laredo, Texas; and the Houma-Bayou Cane-Thibodaux areas of Louisiana.
Only five areas are expected to see a similar jobs recovery in 2010: Las Cruces, N.M. and El Paso, San Antonio and the McAllen-Edinburg-Pharr and Austin-Round Rock areas of Texas.
Most of the country — 286 of 325 metro areas covered in the IHS analysis_ aren’t likely to regain their pre-recession employment levels until at least 2012.
Of these areas, 112 probably won’t return to their recent peaks until 2014 or later
Part of the reason for a sluggish rebound is that lots of jobs won’t be returning at all. As Robert Reich points out:
Economists at Alliance Capital Management took a look at employment trends in twenty large economies and found that between 1995 and 2002–before the asset bubble and subsequent bust–twenty-two million manufacturing jobs disappeared. The United States wasn’t even the biggest loser. We lost about 11% of our manufacturing jobs in that period, but the Japanese lost 16% of theirs. Even developing nations lost factory jobs: Brazil suffered a 20% decline, and China had a 15% drop.
The recession will only accelerate this trend as businesses look for ways to cut costs and increase productivity.
What happened to manufacturing? In two words, higher productivity. As productivity rises, employment falls because fewer people are needed. In this, manufacturing is following the same trend as agriculture. A century ago, almost 30% of adult Americans worked on a farm. Nowadays, fewer than 5% do. That doesn’t mean the U.S. failed at agriculture. Quite the opposite. American agriculture is a huge success story. America can generate far larger crops than a century ago with far fewer people. New technologies, more efficient machines, new methods of fertilizing, better systems of crop rotation, and efficiencies of large scale have all made farming much more productive.
Manufacturing is analogous. In America and elsewhere around the world, it’s a success. Since 1995, even as manufacturing employment has dropped around the world, global industrial output has risen more than 30%.[…]
When the U.S. economy gets back on track, many routine jobs won’t be returning–but new jobs will take their place. […] A growing percent of every consumer dollar goes to people who analyze, manipulate, innovate and create. These people are responsible for research and development, design and engineering. Or for high-level sales, marketing and advertising. They’re composers, writers and producers. They’re lawyers, journalists, doctors and management consultants. I call this “symbolic analytic” work because most of it has to do with analyzing, manipulating and communicating through numbers, shapes, words, ideas. […]
The biggest challenge we face over the long term — beyond the current depression — isn’t how to bring manufacturing back. It’s how to improve the earnings of America’s expanding army of low-wage workers who are doing personal service jobs in hotels, hospitals, big-box retail stores, restaurant chains, and all the other businesses that need bodies but not high skills.
Keep this in mind as California shuts down schools so we can save a few bucks on our taxes.
Tags: economic recovery and manufacturing, job growth, knowledge economy
