Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

US job market appears weaker despite recovery of positions lost to the Great Recession

In this June 6, 2014 photo, cook Kim Jarjabka send out two lunch orders at Coppertop restaurant in Valley City, Ohio. According to research by the National Employment Law Project, restaurants and bars, temporary staffing, and retail account for more than one-third of the job gains in the current recovery. Wages in these sectors average less than $13.34 an hour. (AP Photo/Mark Duncan)

Enlarge Image

In this June 6, 2014 photo, cook Kim Jarjabka send out two lunch orders at Coppertop restaurant in Valley City, Ohio. According to research by the National Employment Law Project, restaurants and bars, temporary staffing, and retail account for more than one-third of the job gains in the current recovery. Wages in these sectors average less than $13.34 an hour. (AP Photo/Mark Duncan)

WASHINGTON - The U.S. economy has finally regained the jobs lost to the Great Recession. But go easy on the hallelujahs. The comeback is far from complete.

Friday's report from the government revealed an economy healing yet marked by deep and lasting scars. The downturn that began 6 1/2 years ago accelerated wrenching changes that have left many Americans feeling worse off than they did the last time the economy had roughly the same number of jobs it does now.

Employers added 217,000 workers in May, more than enough to surpass the 138.4 million jobs that existed when the recession began in December 2007. But even as the unemployment rate has slipped to 6.3 per cent from 10 per cent at the depth of the recession, the economy still lacks its former firepower.

To many economists, the job figures are both proof of the sustained recovery and evidence of a painful transformation in how Americans earn a living.

"The labour market recovery has been disappointing," said Stuart Hoffman, chief economist at PNC Financial Services. "Even with the new peak, there is still a great deal of slack."

There are still 1.49 million construction jobs missing. Factories have 1.65 million fewer workers. Many of these jobs have been permanently replaced by new technologies: robots, software and advanced equipment that speeds productivity and requires less manpower, said Patrick O'Keefe, director of economic research for the advisory and consulting firm CohnReznick.

"When heavy things need to be moved, we now have machines to do it," O'Keefe said. "It is unlikely in the manufacturing sector that we recover much of the losses."

Government payrolls have shrunk, taking middle class pay with them. Local school districts have 255,400 fewer employees. The U.S. Postal Service has shed 194,700 employees.

And during the economic recovery, more people have left the job market than entered it. Just 58.9 per cent of working-age Americans have jobs, down from 62.7 per cent at the start of the recession.

Some of that decline comes from an aging country in which more people are retiring. But the share of working adults among the overall population is "still bouncing around at the bottom where it was during the worst of the recession" — evidence that meaningful wage gains across the economy are unlikely, O'Keefe said.

The recovery hasn't kept up with the expanding U.S. population. Researchers at the liberal Economic Policy Institute estimate that 7 million more jobs would have been needed to keep up with population growth.

The pain has been concentrated largely among lower- and middle-income workers, according to an analysis by the institute.

For the bottom 30 per cent of earners, wages, when adjusted for inflation, have fallen over the past 14 years. For the next 40 per cent of earners, pay basically flatlined.

Most U.S. workers are "running up the down escalator," said Larry Mishel, the institute's president.

Median household income is $52,959, which, after inflation, is $3,303 below its pre-recession level, according to Sentier Research.

Three generally low-paying industries account for more than one-third of the job gains in the recovery: restaurants and bars; temporary staffing; and retail, according to research by the National Employment Law Project. Pay in these sectors averages under $13.34 an hour.

Mike Evangelist, a policy analyst at NELP, said the nation's evolution away from goods production to a more service-oriented economy has slowed hiring in many mid- and higher-paying sectors. The weak job gains in those sectors have slowed overall pay growth, giving consumers less money to spend and depriving the recovery of its usual vigour.

Relative to much of Europe and Japan, lower-wage jobs have accounted for much of the job growth in the United States. About a quarter of U.S. jobs were in low-paying industries in 2011, according to the Organization for Economic Cooperation and Development, a 34-nation association based in Paris. That was the highest proportion among developed nations, the OECD said. In 2001, the United States had ranked fifth in low-paying jobs.

Employers have been shifting to more part-time workers, noted John Silvia, chief economist at Wells Fargo.

"We've got a different labour market with a stronger emphasis on part-time jobs," Silvia said. "The traditional labour market is no longer relevant."

More than 27.2 million Americans now work part time, about 2.5 million more than before the recession. Roughly a quarter of those workers would prefer to be full time, according to the May jobs report. And while the number of full-time workers has risen during the 5-year-old recovery, the economy still has 2.9 million fewer of them.

Economists, including Silvia, see this situation as frustrating but not hopeless. Judging from the May report, Silvia expects wages to rise as long as unemployment continues to decline.

Auto sales last month suggest that consumer spending is shifting into higher gear. Vehicles were purchased at an annual rate of 16.7 million in May, a 7 per cent improvement from the 2013 average. That signals to many economists that the job gains from the past five years will eventually gather enough momentum to lift consumer spending and wages. That would then propel a stronger economy.

In this recovery, the lesson appears to be that every little bit counts.

"Any improvement in employment is encouraging," Diane Swonk, chief economist at Mesirow Financial, said in a research note.

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
The First World War at 100
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates