THE ECONOMY Workers face permanent jobs loss

The recession ended two years ago, but companies continue to cut jobs.
ASSOCIATED PRESS
More than 3,100 pairs a day, three seconds under the needle for each pair -- Judy Peavler was good at her job, stitching the fly and zipper into Wrangler jeans.
At roughly $9.50 an hour, plus benefits, the job was good to Peavler, too.
So when VF Corp. cut hours at its Okemah, Okla., jeans factory a few years ago, Peavler waited three months for business to bounce back. Now, though, she's certain the job is gone for good.
"My Dad used to preach to me to find a decent job and marry it, don't move around and around like he did," says Peavler, whose husband, Roy, also worked at the plant before it closed in April. "So I took his advice ... but it didn't do me any good."
Different labor market
More workers like Peavler are finding themselves in similar straits in a labor market that is behaving very differently than in past economic cycles. In past downturns, employers cut large numbers of jobs in temporary layoffs, then called many workers back once a recovery began.
But although the economy continues to rebound, most of the 2.7 million jobs lost since early 2001 won't be coming back, analysts say.
In many cases, companies are cutting jobs and limiting hiring because of structural changes in their businesses and the broader economy.
Some of it is beyond companies' control, as demand for certain products and services dries up permanently. But employers also are limiting or cutting jobs by squeezing more productivity out of existing workers, sometimes by using additional technology. Many companies have cut jobs by outsourcing work to firms and facilities overseas.
"More and more employers are seeing the downturn in demand as an opportunity or a mandate to make permanent changes, to position themselves to be competitive when demand comes back," said Erica Groshen, an economist with the Federal Reserve Bank of New York.
Such permanent job cuts were not nearly as prevalent in past economic downturns, Groshen and a colleague, Simon Potter, concluded in a recent report.
In most past recessions, temporary layoffs accounted for 30 percent to 40 percent of the rise in unemployment, the pair found. Employers often helped workers to apply for unemployment insurance, kept in contact and called them back when business picked up.
But that began to change in the early 1990s -- during the so-called "jobless recovery" -- when employers sent a larger share of workers home without any plans to call them back.
It is even more pronounced during the current economic cycle, with temporary layoffs accounting for just 7 percent of the rise in unemployment, Groshen and Potter found.
Although the recovery began nearly two years ago, the economy has lost 1 million jobs since that time. When employers added 57,000 new positions to payrolls in September, it marked the first increase in employment since January, even as the percentage of adults with jobs once again dropped.
Jobs will be different
It's not just that the economy is slow to create jobs. The bottom line for workers is that many of the jobs that will eventually be created will be very different from the positions they held before.
Workers like Peavler have begun trying to position themselves for that change. Peavler is 35 and worked at the VF plant for more than 10 years. Paid by the piece, she averaged about $9.50 an hour, good enough that she expected to stay in the job as long as she could.
But since 2001, VF has been closing U.S. plants and focusing production in Central America amid lagging demand for its jeans and stiff price competition.
The company has closed plants in Coalgate and Prague, Okla., as well as the one where the Peavlers worked not far from their home in Henryetta. Later this fall, VF will close plants in Seminole and Ada, Okla., bringing to nearly 1,300 the number of jobs it has eliminated across the state.
For the Peavlers, the change was wrenching. The couple had just bought a house and taken out a home improvement loan. The family relied on the health insurance provided by VF. Judy Peavler's life was so tied to working with a sewing machine that she hadn't touched a computer in 16 years.
"It was like the carpet was being pulled out from under me and it was very, very scary," she says. "I told Roy, what are we going to do? We can't make it with me going back to waiting tables."
But Roy Peavler quickly found a job, restoring repossessed mobile homes. And Judy Peavler is enrolled at Green Country Technology Center in Okmulgee, taking prerequisite courses for training as a nurse.