Thursday, March 6, 2008

In terms of employment as a percentage of population, all remain below the level reached before the last recession.

Is a Lean Economy Turning Mean?
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“I’ve literally sat and cried, but my friends with double degrees are doing worse,” she says. “It’s the economy. It’s really bad.”

Now, it’s getting tougher — particularly for those at the lower rungs of the economic ladder, and especially for African-Americans like Ms. Flennaugh. As the economy slows and perhaps slides deeper into a recession that may already be under way, communities like this — cities that have long struggled with a shortage of jobs — see work becoming scarcer still.

Across the nation, the labor market has been deteriorating. Many companies, long reluctant to add workers, are hunkered down and waiting for improved prospects, engaged in what Ed McKelvey, a senior economist at Goldman Sachs, calls “a hiring strike.” Americans with jobs are taking cuts to their work hours; those without jobs are staying out of work longer, or accepting positions that pay far less than they earned previously.
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IN many communities, dreams of upward mobility are yielding to despair and the grim realization that the economy — not strong for less-educated workers even when it was growing — may now be shrinking, making it tougher than ever to find a job.

Indeed, the increasingly anemic job market comes on the heels of six years of economic expansion that delivered robust corporate profits but scant job growth. The last recession, in 2001, was followed by a so-called jobless recovery. As the economy resumed growing, payrolls continued to shrink.

Even as job growth accelerated in 2005 and 2006 before slowing last year, it was not enough to return the country to its previous level. Some 62.8 percent of all Americans age 16 and older were employed at the end of last year, down from the peak of 64.6 percent in early 2000, according to the Labor Department.
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In many metropolitan areas, overall employment remains below levels reached before the last recession; the list includes New York, Chicago, Detroit, Milwaukee and Buffalo, as well as Boulder, Colo.; Spartanburg, S.C.; and Topeka, Kan., according to Economy.com.
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From 1975 to early 2000, the percentage of African-American women who were employed jumped to 59 percent from 42 percent. Two years later, following a recession, the percentage had dropped to 55 percent. Since then, employment among African-American women has shown little change, reaching 55.7 percent at the end of 2007.
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“Why can’t I get a job?” she asks, her eyes welling with tears. “Is it because of my age? Is it because I’ve gained weight? I’m articulate. I’m a positive thinker. I know how to conduct myself in an office setting. But I’m starting to lose all my confidence.”

Government data show that the labor market has weakened in recent years for nearly every demographic group. Women as well as men; whites, blacks, Hispanics and Asian-Americans; teenagers and the middle-aged; high school graduates and those with college degrees. In terms of employment as a percentage of population, all remain below the level reached before the last recession.
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Rather than hire and risk having to fire in another downturn, companies added hours for those already on the payroll and relied more on temporary workers, said Mr. McKelvey, the Goldman Sachs economist. Manufacturing companies continued to automate, to squeeze more production out of the same number of workers, while shifting jobs to lower-cost countries like China and Mexico. For lower-skilled workers, that intensifies the competition for the jobs that remain.
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Before 1990, it took an average of 21 months for the economy to add back the jobs shed during a recession, according to an analysis by the Economic Policy Institute and the National Employment Law Project, a worker advocacy group. Yet in the last two recessions, in 1990 and 2001, it took 31 months and 46 months, respectively, for employment levels to recover fully.
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OAKLAND is typical of the lean hiring that has accompanied the winnowing of jobs. In recent decades, Oakland’s once-formidable manufacturing base has hollowed out as the city has lost food processing factories, auto plants and warehouses. Downtown, concrete-floor factories have been turned into chic residential loft spaces.
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