In Job Market Shift, Some Workers Are Left Behind

May 12, 2010 by CATHERINE RAMPELL

This abridged version shines the light on the America's economic policy holes.

JACKSONVILLE, Fla. — Many of the jobs lost during the recession are not coming back. For the last two years, the weak economy has provided an opportunity for employers to do what they would have done anyway: dismiss millions of people — like file clerks, ticket agents and autoworkers — who were displaced by technological advances and international trade.
The phasing out of these positions might have been accomplished through less painful means like attrition, buyouts or more incremental layoffs. But because of the recession, winter came early.
The tough environment has been especially disorienting for older and more experienced workers like Cynthia Norton, 52, an unemployed administrative assistant in Jacksonville. “I know I’m good at this,” says Ms. Norton. “So how the hell did I end up here?” But since she was laid off from an insurance company two years ago, no one seems to need her well-honed office know-how.
Ms. Norton is one of 1.7 million Americans who were employed in clerical and administrative positions when the recession began, but were no longer working in that occupation by the end of last year. There have also been outsize job losses in other occupation categories that seem unlikely to be revived during the economic recovery. The number of printing machine operators, for example, was nearly halved from the fourth quarter of 2007 to the fourth quarter of 2009. The number of people employed as travel agents fell by 40 percent.
This “creative destruction” in the job market can benefit the economy. Pruning relatively less-efficient employees ….makes American businesses more efficient. Year over year, productivity growth was at its highest level in over 50 years last quarter, pushing corporate profits to record highs and helping the economy grow. But a huge group of people are being left out of the party.
Millions of workers who have already been unemployed for months, if not years, will most likely remain that way even as the overall job market continues to improve, economists say. The occupations they worked in, and the skills they currently possess, are never coming back in style. And the demand for new types of skills moves a lot more quickly than workers — especially older and less mobile workers — are able to retrain and gain those skills.
There is no easy policy solution for helping the people left behind. The usual unemployment measures — like jobless benefits and food stamps — can serve as temporary palliatives, but they cannot make workers’ skills relevant again.
Employers, Ms. Norton thinks, fear she will be disloyal and jump ship for a higher-paying job as soon as one comes along. Sometimes she blames the bad economy in Jacksonville. Sometimes she sees age discrimination. The problem cannot be that the occupation she has devoted her life to has been largely computerized, “You can’t replace the human thought process,” she says. “I can anticipate people’s needs. There will never be a machine that can do that.”
Offices, not just in Jacksonville but all over the country, have found that life without a secretary or filing clerk is actually pretty manageable. The office environment is more automated and digitized than ever. Bosses can handle their own calendars, travel arrangements and files through their own computers and ubiquitous BlackBerrys, so even when orders pick up, many of the newly de-clerked and un-secretaried may not recall their laid-off assistants. At the very least, any assistants they do hire will probably be younger people with different skills.
Economists have seen this type of structural change, which happens over the long term but is accelerated by a downturn, many times before. In recessions, employers clean house and then get ready for the next big move in the labor market. Economists argue that bigger structural job losses help explain why the last two economic recoveries were jobless — that is, why job expansion lagged far behind overall growth.
But there is reason to think restructuring may take a bigger toll this time around. The percentage of unemployed workers who were permanently let go has hovered at a record high of over 50 percent for several months. The unemployment numbers show a notable split in the labor pool, with most unemployed workers finding jobs after a relatively short period of time, but a sizable chunk of the labor force unable to find new work even after months or years of searching. This group — comprising generally older workers — has pulled up the average length of time that a current worker has been unemployed to a record high of 33 weeks as of April. The percentage of unemployed people who have been looking for jobs for more than six months is at 45.9 percent, the highest in at least six decades.
And so the question is what kinds of policy responses can help workers like Ms. Norton who are falling further and further behind in the economic recovery, and are at risk of falling out of the middle class.
Ms. Norton has spent most of the last two years working part time at Wal-Mart as a cashier, bringing home about a third of what she had earned as an administrative assistant. Ms. Norton says she cannot find any government programs to help her strengthen the “thin bootstraps”. Because of the Wal-Mart job, she has been ineligible for unemployment benefits, and she says she made too much money to qualify for food stamps or Medicaid last year. “If you’re not a minority, or not handicapped, or not a young parent, or not a veteran, or not in some other certain category, your hope of finding help and any hope of finding work out there is basically nil,” Ms. Norton says."
Some industries, others enjoy structural growth (the “creative” part of “creative destruction”). The key is to prepare the group of workers left behind for the growing industry. Jobs return for some of these people, but they won’t be in the same place. The White House has publicly challenged the idea that structural unemployment is a big problem, emphasizing that stronger economic growth is what’s needed. Still, the administration has allocated dollars for retraining in both the 2009 stimulus package and other legislation, largely for clean technology jobs.
Ms. Norton, fhas tried to retrain to a new career in the expanding health care industry via a $17,000 student loan, to obtain certification as a medical assistant to do front-office work, like billing, as well as back-office work, like giving injections and drawing blood. The school that trained her, though, neglected to inform her that local employers require at least a year’s worth of experience — generally done through volunteering at a clinic — before hiring someone for a paid job in the field. She says she cannot afford to spend a year volunteering, especially with her student loan coming due soon. She has one prospect for part-time administrative work in Los Angeles but she does not have the money to relocate. “Sometimes I think I’d be better off in jail,” she says, only half joking. “I’d have three meals a day and structure in my life. I’d be able to go to school. I’d have more opportunities if I were an inmate than I do here trying to be a contributing member of society.”