You can get a comforting image using words like “recession” and “recovery.” We imagine a graph measuring economic activity that goes up and down, as regular as the seasons, with a bad economy coming back to normal if you can wait it out.
But what if the economy drops further and faster than any current worker can remember, and the road to recovery is too slow to benefit many of the millions of people who are out of work? What if instead of a run through the business cycle, we are living through a major restructuring of the economy, and some things will never be the same?
That’s what employment data suggest is happening, said John Dorrer, director of the Center of Workforce Research and Information at the Maine Department of Labor.
Dorrer says that more people are out of work and are staying that way longer, and whole sectors of the kinds of jobs that they once had may never come back. New jobs that are advertised require more education and skills than the ones that have disappeared, leaving the formerly employed less chance of making it through to the next phase of the cycle.
This should create a new urgency for policymakers. Unemployment benefits that simply replace part of a worker’s income until he can get the next job are not an adequate response to this situation; more support for job training and higher education should also be part of what helps workers make it to the next job.
And in the short term, waiting for the private sector to stimulate growth also appears to be unequal to the task. These times call for more investments in energy and transportation projects that will put people to work and build toward long-term growth.
The next Legislature will not be able to cut its way out of this mess, and policymakers’ work is far from done.
Officially, Maine has an 8 percent unemployment rate, which is lower than the 9.5 percent rate for the nation as a whole, which would make it look like we have reason to be cheerful. But it’s more complicated than that.
Both the state and national unemployment rates are figured on a variety of measures that include a household survey. In Maine, 1,500 families are called and asked if anyone who lives there is out of work. If the answer is yes, they are asked if they are looking for work.
If they say that they have given up because there are no jobs for them to find, they are no longer considered unemployed and don’t figure into the rate.
Dorrer said that other figures include the so-called “discouraged workers” and come up with a rate of 9.5 percent for the first six months of this year. If you add the “marginally attached” or workers who have been forced to take part-time jobs when they really need full-time ones, the real jobless rate is 16.1 percent.
In raw numbers, that means there are about 50,000 Mainers who are out of work, if you use the strictest definition, and about 75,000 if you use the broadest. That’s about the total population of Portland either looking for work, no longer looking out of frustration, or working part time because that’s all that they can get.
The business cycle offers these folks little hope. “The rate of job creation is extraordinarily low,” Dorrer said. “We will see some signs of hope one month and the next month it goes away.”
Most of the job losses have been in three categories: construction, manufacturing and retail sales. Construction jobs seem the most likely to rebound, he said, but the other two may not.
There has been a steady erosion of low-skill manufacturing out of the state for a generation, and the current economic downturn has just accelerated the movement. But there’s no reason to be more optimistic about the future of retail.
“We went from a savings rate of about zero to a savings rate of 4 percent,” Dorrer said. “An experience like this leaves permanent scars, and we may never see a return to the wild and unchecked consumer spending.”
The jobs that are coming on the market are very different than the ones that have disappeared. Dorrer said that a survey of online job ads in Maine showed that 45 percent required a college education. In a state that has the lowest rate of higher education in the region, this is not good news for a lot of job seekers.
What will it take to get the people who have lost jobs back to work?
Some of them won’t make it. There is a strain on the Social Security trust fund from an abnormally high number of people applying for benefits at age 62, instead of waiting for the full retirement age of 66.
Younger workers are going to need more training to “reskill” and find a place in the areas where there may be growth, like health care, alternative energy or technology.
That is going to require a bigger commitment from the government to support community colleges and the university system, and private-sector investments in education.
While no one knows what will work, it’s clear that just maintaining workers with temporary unemployment benefits — even if they are regularly extended — will not be enough to bring people out of this downturn.
The recovery is too slow to ask unemployed workers to just wait it out.
Greg Kesich is an editorial writer. He can be contacted at 791-6481 or: gkesich@pressherald.com
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