Job Losses Hint at Vast Remaking of Economy

BlueOrange

本文通过一路BBS站telnet客户端发布


http://www.nytimes.com/2009/03/07/business/economy/07jobs.html?_r=1&hp

March 7, 2009
Job Losses Hint at Vast Remaking of Economy
By PETER S. GOODMAN and JACK HEALY

As government data revealed that 651,000 more jobs disappeared in February, a sense took hold that growing joblessness may reflect a wrenching restructuring of the American economy.

The unemployment rate surged to 8.1 percent, from 7.6 percent in January, its highest level in a quarter-century. In key industries — manufacturing, financial services and retail — layoffs have accelerated so quickly in recent months as to suggest that many companies are abandoning whole areas of business.

“These jobs aren’t coming back,” said John E. Silvia, chief economist at Wachovia in Charlotte, N.C. “A lot of production either isn’t going to happen at all, or it’s going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses.”

This dynamic has proved true in past recessions as well, with fading industries pushed to the brink during downturns before others emerged to create jobs when economic growth inevitably resumed. But with job losses so enormous over such a short period of time, some economists argue that the latest crisis challenges the traditional American response to hard times.

For decades, the government has reacted to downturns by handing out temporary unemployment insurance checks, relying upon the resumption of economic growth to restore the jobs lost. This time, the government needs to place a greater emphasis on retraining workers for other careers, these economists say.

The grim scorecard of contraction in the American workplace released by the Labor Department on Friday largely destroyed what hopes remained for an economic recovery in the first half of this year, and it added to a growing sense that 2009 is probably a lost cause.

Most economists now assume American fortunes cannot improve before the last months of the year, as the Obama administration’s $787 billion emergency spending program begins to wash through the economy.

“The current pace of decline is breathtaking,” said Robert Barbera, chief economist at the research and trading firm ITG. “We are now falling at a near record rate in the postwar period and there’s been no change in the violent downward trajectory.”

The monthly snapshot of the national employment picture revealed an even bleaker picture as the government revised upward the job losses in December and January. The economy has shed at least 650,000 jobs for three straight months, the worst decline in percentage terms over that length of time since 1975.

Since the recession began, the economy has eliminated a net total of roughly 4.4 million jobs, with more than half of those positions — some 2.6 million — disappearing in the last four months alone. This rapid deterioration has prompted talk that some industries are being partly dismantled. Layoffs are multiplying because of dysfunction in the financial system, which is prompting even healthy companies to shed workers and shut down operations out of concern they may soon lose access to credit.

“Everybody is so fearful that companies are thinking, ‘What can we hang on to and what should we liquidate?’ ” said Martin N. Baily, a chairman of the Council of Economic Advisers under President Clinton and now a fellow at the Brookings Institution. “A lot of the reduction in employment is businesses deciding to close down operations or get out of a line of certain activity.”

American car sales have dropped to an annual pace of nine million, from some 17 million in 2007. Even if sales increase considerably, that is likely to leave a lot of unneeded auto factories.

“The decimation of employment in legacy American brands such as General Motors is a trend that’s likely to continue,” said Robert E. Hall, an economist at Stanford University’s Hoover Institution. “We have to stimulate the economy to create jobs in other areas.”

In February, 168,000 more manufacturing jobs were eliminated, bringing losses over the last year to 1.2 million. In Michigan, where the troubles of the auto industry have been particularly traumatic, the unemployment rate sits at 10.6 percent, the highest of any state in the nation.

“The people who do what I do in the Detroit area are a dime a dozen,” said Kim Allgeyer, 46, a machine toolmaker in Westland, Mich., who was laid off in January from a company that makes assembly lines for the automakers. Unable to find another full-time job, he is subsisting on day labor and one-week stints for contractors. “Who’s going to put me to work?” he asked. “Where’s the work at? It’s just a great big black hole.”

Much the same can be said for financial services, which gave up 44,000 jobs in February. During the housing boom, banks hired tens of thousands of well-compensated traders, analysts and marketers to sell mortgage-backed securities and other investments. That industry is unlikely to return to its former shape.

Retailers are shuttering stores as the era of easy money fueled by rising house prices and abundant credit gives way to a period in which millions of households are forced to confine their spending to their paychecks. The economy lost 39,500 retail jobs in February, and has eliminated more than 500,000 in the last year.

President Obama pointed to the latest evidence of distress as justification for a muscular, government-led effort to generate jobs quickly.

“This country has never responded to a crisis by sitting on the sidelines and hoping for the best,” the president said in an appearance in Columbus, Ohio. “Throughout our history we have met every great challenge with bold action and big ideas.”

The stimulus spending bill signed last month includes $4.5 billion for job training. That only begins to address an area long neglected, said Andrew Stettner, deputy director of the National Employment Law Project in New York. In current dollars, the nation devoted the equivalent of $20 billion a year to job training in 1979, compared with only $6 billion last year, Mr. Stettner said.

“We have to seriously look at fundamentally rebuilding the economy,” he said. “You’ve got to use this moment to retrain for jobs.”

Friday’s report reinforced how much the economy is being assailed at once by falling household spending power and the financial crisis, with companies resorting to wholesale layoffs after months of merely declining to hire.

Transportation and warehousing lost 49,000 jobs in February. Employment services shrank by 88,000 jobs. Hotels and restaurants lost 32,000 jobs. Health care remained a rare bright spot, adding 30,000 jobs.

Some suggested the job cuts reflected the anxiety that gripped the financial system after Lehman Brothers failed. Borrowing costs have spiked for American companies, making businesses reluctant to expand and hire. And many companies remain spooked by the Wall Street collapse.

“There was a huge increase in uncertainty and a huge hit to confidence which caused a large rethinking among businesses,” said Ethan Harris, co-head of United States economics research at Barclays Capital.

In similar crises, like the stock market crash of 1987 and the near collapse of the enormous hedge fund Long Term Capital Management in 1998, dysfunction continued for about six months, Mr. Harris said. But history also shows that when fear lifts, the economy returns to wherever it was when the crisis began, he said, suggesting the recession is likely to continue for many more months.


--