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Changing job market requires change from job seekers

Going back to school helps. A report shows that workers with advanced degrees earned more than $83,000 on average in 2008, compared with about $59,000 for those with a bachelor’s degree.

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Going back to school helps. A report shows that workers with advanced degrees earned more than $83,000 on average in 2008, compared with about $59,000 for those with a bachelor’s degree.

WASHINGTON — A surprisingly strong April jobs report points to a labor market on the mend, but for 15.3 million unemployed Americans, it will take a long time to overcome the steep job losses resulting from the Great Recession and longer-term changes to the labor market.

While the economy added 290,000 nonfarm jobs in April on a seasonally adjusted basis, almost 7.8 million jobs have been lost since December 2007, and structural shifts in the labor market started long before that.

For years, goods-producing jobs have disappeared as the service sector has grown. More recently, the recession has wreaked havoc on middle-skill jobs — from sales and production work to office and administrative. Post-graduate degrees are proving increasingly valuable. And temporary positions have seen gains in recent months.

The U.S. manufacturing sector has suffered steep losses for years — and the recession only amplified that shift. Since the recession started, manufacturing has lost more than 2 million jobs. Still, manufacturing notched gains in recent months, adding 100,000 jobs starting in January — 44,000 jobs in April alone.

"One of the things people will be looking for is to see how manufacturing rebounds," said Keith Hall, commissioner of the Bureau of Labor Statistics.

Back to school

Evan Phillips was laid off by General Motors in 2008, and is still seeking full-time work. The 25-year-old Kalamazoo, Mich., resident worked at a now-closed Michigan plant for over a year.

Phillips isn't counting on the return of his old job. He's back at school, training to become a physical therapist assistant.

Post-high-school education is important for workers who want to ramp up lifetime earnings, especially when their old occupation downsizes, economists say.

"One of the things that has become really important is not just that people get out of high school and go to college, but that people go back to school. That sort of training helps quite a bit in transitioning people to new careers," said Hall, of the Bureau of Labor Statistics.

For Phillips, the two years' training needed to become an assistant is realistic, but taking a few more years to become a full-fledged physical therapist would be too much.

Education pays

While additional schooling comes with opportunity costs, education bumps up earnings, data show. The payback for more education is at a historic high, according to a recent report by David Autor, an economist at the Massachusetts Institute of Technology. The hourly wage of the typical college graduate was 1.95 times the hourly wage of the typical high school graduate in 2009, up from 1.5 times in 1963. All of the gain took place after 1980.

The Census Bureau recently reported that workers with an advanced degree earned more than $83,000 on average in 2008, compared with about $59,000 for those with a bachelor's degree, and about $31,000 for those whose highest degree was a high school diploma.

And in a weak labor market, at least one major opportunity cost — foregone income — is smaller.

"When it's easy to find a full-time job that pays good wages then the price of college is pretty high. In current circumstances, that price is a lot lower for a lot of people," said Gary Burtless, a labor economist at the Brookings Institution.

Winners and losers

Among the 20 occupations expected to have the largest number of job losses between 2008 and 2018, 15 are either production or office and administrative support occupations, according to a BLS report.

Both are "adversely affected by increasing plant and factory automation or the implementation of office technology."

Meanwhile, the 20 occupations expected to have the biggest job gains in coming years — including health, education, sales, and food service — will account for one-third or more of all new jobs — 5.8 million combined.

Separately, a recent report by Autor found that middle-skill jobs — including sales, office and administrative, and production workers — have lost share in the employment pool in the last three decades.

"Employment losses during the recent recession were far more severe in middle-skill white- and blue-collar jobs than in either high-skill, white-collar jobs or in low-skill service occupations," according to Autor's report.

Changes in technology, international trade, and off-shoring all play a part in the shrinking share of middle-skills jobs. Technology has displaced clerical jobs and eliminated some of the need for middle managers who track performance, said Lawrence Katz, an economist at Harvard University.

But there are tasks a computer can't perform, he said.

"Robots can do a lot of things, but they can't figure out what's trash and what are the important papers on my desk," Katz said. "They can monitor truck drivers, but they don't substitute for them."

Temp sector growing

With about 2 million workers, the temporary help services pool is a small part of the labor market's 130 million nonfarm employees. But this leading indicator of the labor market is growing.

Temporary services jobs started gaining in October, adding 330,000 through April, according to the Labor Department.

The Labor Department describes temporary help services firms as those that provide temporary employees to other businesses "to support or supplement their workforce."

There's another, bigger group of temporary workers: contingent workers, representing about 31 percent of the workforce. That category includes people who do not have standard full-time employment.

As the labor market recovers, and until employers feel significantly more optimistic, employers may continue to tap temps as they look to control fixed costs.

Temp gigs can lead to permanent positions for workers. "If you get your foot in the door on a temporary assignment, you have the opportunity to engage your supervisor and show them you have an understanding of the company's mission and dedication to help them," said Richard Wahlquist, chief executive of the American Staffing Association.

But those permanent positions aren't guaranteed.

Changing job market requires change from job seekers 05/22/10 [Last modified: Saturday, May 22, 2010 1:10am]
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