Hiring rises slowly
Many jobs are gone for good
Chicago Tribune
CHICAGO
After two years of painful contraction, construction executive Jim McShane is hiring again, seeking out accountants, property managers and engineers for projects ranging from offices and schools to medical-care facilities and affordable housing.
But he is moving with extreme caution, watching the unemployment rate to gauge whether the economic recovery has legs. And he is blown away by the deluge of applicants.
“We advertised for a project engineer and had over 400 applicants ... and many had five to 10 years of experience,” said McShane, chief executive of The McShane Cos., based in Rosemont, Ill. “It was staggering, just staggering.”
Many employers, in Chicago and elsewhere, are hiring again, easing fears that the economic recovery will be jobless. Among the more hopeful signs: The unemployment rate has slipped below 9 percent for the first time in nearly two years.
“The jobs picture looks like it’s at a turning point,” said former Federal Reserve governor Randall Kroszner, a University of Chicago economics professor.
But deep wariness remains among observers who predict a long road back to fuller employment — a path that could take several years to traverse. The housing market remains moribund, the auto industry is anemic and the Middle East is in turmoil, sending oil prices upward. Worries about government fiscal stress and about future health-care costs persist. And federal stimulus money is tailing off.
Debate has swirled over whether the country will return to pre-Recession rates of economic growth and unemployment, or whether a “new normal” will emerge, as has been suggested by executives at Pimco, a huge investment-management firm with deep expertise in bonds. This post-recession world would be marked by slower growth, higher unemployment and greater odds of systemic shocks.
But Tony Crescenzi, a Pimco strategist, thinks a “new normal” will be felt in some key industries, notably housing and autos.
“The construction industry lost 2 million jobs in the recession, during a period when housing starts fell from 2 million, annualized, to half a million,” he said. He expects starts to remain close to that reduced level.
“That means most of the 2 million who lost those jobs lost them for good,” Crescenzi said.
The auto industry, which lost 500,000 jobs during the recession, has seen some stabilization but sales remain significantly below peak levels.
While corporate America’s cautious shift to a hiring mode has trimmed the number of jobs lost in the recession by about 14 percent in the past year, the nation is still short some 7.5 million private-sector jobs.
And much of the job growth has been in industries that tend to be lower paying, among them temp services, health care, food service and retail, according to an analysis by the National Employment Law Project, a worker-advocacy group. Manufacturing saw gains too, though off a deep trough.
Looking ahead, a survey of 18,000 employers by Manpower Inc. indicates increased willingness to hire in the second quarter, with 16 percent saying they plan to add staff, up from 14 percent in the first quarter.
Hospitality, professional services, manufacturing and retail were among the most-optimistic sectors.
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