Where have the jobs gone?
by Becky Gillette
Published: September 1,2003
While few people could have missed the news about the number of job losses in manufacturing in Mississippi in recent years, less well publicized are job losses in other sectors of the economy.
“It has not been a wonderful year in most places,” says Joan Barry, a statistical analyst with the Mississippi Employment Security Commission (MESC). “There have been job losses in many sectors of employment.”
There were about 103,000 unemployed people in Mississippi in June — enough to represent one of the largest cities in the state. Unemployment has reached 7.7%, a 16-month high.
Barry said while some people might be alarmed by those numbers, what is being seen in Mississippi isn’t unusual.
“What I see coming down from statistics from Washington is that jobs are still fairly flat nationwide,” Barry said. “I think probably in many states it is really rough. But the job situation will eventually settle down. It is just a ‘wait and see’ kind of thing. With the world situation we are so heavily involved in, people are just taking things slowly. Employers in particular are being very cautious. Everybody is hoping to see the jobs pick up, but it is a very slow process. I think we were spoiled in the 1990s. I think the slowdown in general was a rude awakening for people because we had had this rapid creation of employment.”
Some of the largest numbers of job losses were seen on the Coast, which lost an estimated 7,000 non-farm jobs between the summer of 2002 and 2003. That compared to overall non-farm job losses of 5,100 statewide — meaning there were job gains elsewhere in the state that offset losses on the Coast and in other metropolitan areas.
The Coast job losses have been a surprise because while there have been headlines about job losses at major industries such as International Paper and Rohm & Haas, there hasn’t been much said about job losses in other sectors of the economy. The Coast has lost an estimated 3,600 leisure and hospitality jobs, 1,400 construction jobs, 1,200 manufacturing jobs and 200 government jobs. The Coast added 200 jobs in the information industry and 400 in education and health services.
Barry said the drop in jobs in the Coast doesn’t necessarily mean that many more people are unemployed.
“Anytime you are near border states you have a lot of people that commute either direction to work,” she said. “People commute in from Mobile to work at the shipyard in Pascagoula. If people on the Coast lost their job, they may be working in Louisiana or Alabama.”
During the soft economy there has been pressure for all kinds of employers to cut costs. One way to do that is to downsize or shift to using part-time workers.
“Part time is definitely a trend for employers,” said Dr. Paul Grimes, head of the Department of Finance and Economics at Mississippi State University (MSU). “If they are part time, you don’t have to pay as many benefits. The real trend we are hearing a lot of people talking about is downsizing to keep the same efficiency. You try to keep the same output with fewer workers. You see this happening during a recession as employers try to maintain their profitability. In a recession, sales fall, inventory begins to build up, and you need to contain costs. One way to do that is reduce the number of hours in terms of employees. The recession is forcing a lot of firms to see where cost can be cut. Unfortunately, one of those areas if very obvious: fewer workers. If you keep reducing employees, the level of efficiency looks better if you maintain the same level of output.”
Some argue that a recession helps make American businesses leaner and more competitive, which can be good for long-term viability. But those conclusions leave out the human element.
“If you are one of those workers who is unemployed, the recession has a different meaning to you,” Grimes said. “Many of those workers support their families. There is definitely a human element that cannot be ignored.”
Grimes said Mississippi has not been affected extraordinarily differently than anywhere else. Times are tough across the country.
Real unemployment is likely higher than the unemployment figures show due to what is known as the “discouraged worker effect.”
“During a recession it takes people longer to find a new job and many of those who are looking may become discouraged,” Grimes said. “At some point some of them will stop looking for work. When they stop looking for work they are no longer counted as part of the labor force. You see that during a recession when the length of unemployment gets longer, people get discouraged, and people drop out. They decide to go back to school, or stay home with the kids.”
Early figures show that some state colleges are seeing record levels of enrollment this fall.
Grimes thinks the economy is on an upswing, and that Mississippi will continue to benefit from the Nissan plant’s opening. Current employment figures came out before Nissan was at full speed.
“As time goes on the Nissan plant opening up in the Jackson area will begin to attract more jobs, particularly as suppliers locate in the state,” Grimes said. “The future looks better than it has for a long time. I think the recession will slowly disappear, and we will try to get back on track.”
Dr. Charles Campbell, a professor of economics at MSU, says the decline in the economy nationwide comes at the same time that jobs in Mississippi are restructuring.
“We’re going through a couple of things at the same time that are unfortunate,” Campbell said. “Our economy in the state is restructuring the same way the U.S. economy restructured about 20 years ago. There is a shift from certain low-wage manufacturing jobs. That will probably eventually be good for the state, and people will find high wage jobs eventually. In the short term, you have a terrible adjustment problem because we have people who are not really qualified for better jobs and aren’t in a position where they can move to better jobs. So until they can be retrained and we can provide better jobs, then they are out of luck.”
Campbell said much of the rest of the country went through the restructuring 20 years ago when jobs in low-wage manufacturing — primarily the apparel industry — moved from the North to locate in states in the South like Mississippi.
“Now the low wage place to go is overseas and South America,” he said. “The rest of the country went through restructuring and sent low-wage jobs to Mississippi. Now we are going through the restructuring and sending the low-wage jobs to the Third World.
“The second piece is just the overall national economy. Supposedly we are technically in a recovery, but we are still losing jobs. It is not a job recovery, but it is GDP (gross domestic product) recovery. We are producing more with fewer workers. We define a recession according to the GDP. The jobs situation looks like a recession, and because of that there is less consumer confidence, and it is consumer buying that is needed to bring back the jobs. Once they believe the economy is improving, it will become a self-fulfilling prophecy.”
For a detailed look at job gains and losses by the country, region or state, visit the Web site http://www.mesc.state.ms.us/lmi/pubs/alf.html.
Contact MBJ contributing writer Becky Gillette at email@example.com.
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