U.S. Blue-Collar Economic Recession

Posted by: Ishwar Khatiwada

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-     Photo Courtesy: tutor2u.net

The U.S. lost 5.13 million payroll jobs over the past 16 months (December 2007 through March 2009). Nationwide, 28 million 16 and older (the size of Nepal’s population) are either unemployed, underemployed or are hidden unemployed, desiring a job but not actually looking. None of the business, economic, and labor market indicators yet point when this ongoing recession will end. In comparative perspective, of the eleven economic recessions that occurred in the U.S. after the end of World War II, job losses in the current recession are the largest ever in both absolute and relative terms. There are some important facts about this economic recession that are not covered well by the international, local and national U.S. media. The media are not being informative on addressing who are losing jobs and which industrial sectors and occupational groups of workers have been mostly affected by this prolonged economic recession. Let the facts be presented. Men in the non-college end of the occupational distribution were very hard hit in this economic turmoil. In addition, job loss occurred in the blue-collar/construction/production/clerical/retail sales and other lower level white collar occupations. Of the total 4.47 million payroll jobs lost over the January 2008 through February 2009 period, men lost 3.43 million jobs, accounting for 77% of the entire jobs lost over the past 16 months. (Table 1). Over the December 2007 through March 2009 period, payroll job loss as a percent of December 2007 employment (the peak month of economic activity) was 3.2%. During the same period, job losses as a percent of December 2007 employment were 5% for men versus only 1.5% for women. Thus, the vast majority of job losers were men.

Table 1:

Total Payroll Job Losses and Men’s Share in the Total Payroll Job Losses, U.S., December 2008 through February 2009 Period

Group

December 2007 Employment Level (In ‘000)

Cumulative Payroll Job Losses Over the January 2008 through February 2009 Period (In ‘000)

Cumulative Payroll Job Losses as % of December 2007 Employment

All

138,152

-4,470

-3.2

Men

70,834

-3,427

-4.8

Women

67,318

-1,043

-1.5

% of Men

51.3

76.7

Source: U.S. Bureau of Labor Statistics, author’s tabulations.

Note: As of this writing, the BLS has not published March employment statistics for gender group.

The current economic recession has been particularly severe for men in production, construction, manufacturing, transportation, and warehousing occupations. The media have generally highlighted layoffs in the financial services and management service sector. In fact, there are no net job losses in management occupations in this recession. Yes, firms are laying off management workers, but it is also true that elsewhere firms are hiring workers in professional and management occupations. As a result, there are no significant NET job losses in these high level professional occupations. It is the blue collar, production, construction, and low level white collar jobs that have been destroyed at the highest pace in the current recession. These jobs accounted for almost the entire job losses in this current recession. (Table 2). We should note that more than 56% of all employed in the U.S. are employed in blue-collar, construction, productions and other low level white collar occupations.

The number of unemployed in blue collar, production, construction, and low level white collar occupations are extraordinarily high in this recession. In the month of March, of the 13.2 million unemployed, 10.2 million or more than 77% of the unemployed were in blue collar, production and low level white collar occupational group. The unemployment rate was nearly 13% in production/blue-collar, and low level white collar occupations versus only 4% in professional and management occupations. The only economic recession after the World War II in which the unemployment rates of workers in the blue collar and low level white collar occupational group reached such a high level was 1982 (peaked at 13%). With the worsening of current economic situation, the unemployment rates are expected to go even higher.

Table 2:

Absolute Change in the Civilian Employment Level* of Working-Age Persons (16+) Over the October-December 2007 to January-March 2009 Period, U.S.

Occupation

Absolute Change

High Level, Professional, Management, and Technical Occupations

-281,000

Construction/Blue-Collar/Production/Low Level White Collar Occupations

-6,828,931

Total Employed in All Occupations

-7,109,869

Share of Construction/Blue-Collar/Production/Low Level White Collar Occupations

96.0%

Note: * Not seasonally adjusted.

Source: Monthly Current Population Survey (CPS), U.S. Census Bureau for U.S. Bureau of Labor Statistics, public use files, author’s tabulations.

Workers in blue-collar/construction/production and low level white collar occupations are characterized by fewer years of formal schooling. Hence, another way of showing the socioeconomic impacts of this economic recession is by examining the unemployment rates of the labor force by their educational attainment level. More than 88% of workers in blue-collar/construction/production and low level white collar occupations do not have four-year college degrees and 57% percent of those in these occupations do not have schooling beyond high school. The less educated are the most adversely affected by this recession. Those without schooling beyond high school had the highest unemployment rate of 13% while those with a four-year college degree had an unemployment rate of only 4%. It is true that the impacts of the current economic recession is spreading across all the socio-economic groups, but it has been most costly for men, workers in blue-collar, production/construction and low level white collar occupations, and for those without a four-year college degree. It would be desirable for the international, national and local U.S. media to focus on these key aspects of the current economic downturn on worker level.

U.S. Blue-Collar Economic Recession was last modified: May 5th, 2009 by Ishwar Khatiwada

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