The economy isn’t so strong after all. That’s what comes to mind after reading the Bureau of Labor Statistics latest report on workers who lost their jobs because of business closings and failures– many of whom held those jobs for quite a while.
From 2013 to 2015 (five years after the recent Great Recession ended), some 7.4 million Americans lost their jobs and that includes many who had held down the same job for multiple years. While that number was down by 2.1 million workers from the previous three years, that’s a significant number of people who –no fault of their own –lost their ability to provide for themselves and their families. Just under a third (3.2 million) of these displaced workers are long-tenured displaced workers.
Displaced workers are adult workers (aged 20 or older) who lost or left jobs because their plant or company closed or moved, there wasn’t sufficient work for them, or their position or shift was eliminated. These are purely hardships that occurred because the company or plant they worked for suffered losses. Long-tenured displaced workers had a steady job for quite a while (three years or more), but one day found the economic rug yanked from under them.
The good news is that two out of three long-tenured displaced workers were reemployed, but a third remained unemployed or have dropped out of the labor force.
Not too surprisingly, of the industries that shed long-tenured displaced workers the largest percentage most were in manufacturing (17 percent), followed wholesale and retail trade. Professional and business services, education and health services round out the top five industries.
The state of displaced workers during the Obama economic recovery point to how the economy and the President’s policies put so much pressure on companies that they had to fire workers at best or shut down at worse. The industries noted above have been the target of added regulations. According to the Competitive Enterprise Institute "Ten Thousand Commandments," the so-called hidden tax imposed by the regulatory state has reached $1.88 trillion.
Beyond that our entire economy has been held back by the government intervening in the worker-employer relationship through higher taxes, ObamaCare ($27.2 billion in total private sector costs plus and more than 159 million paperwork hours on local governments and affected entities), and, more recently, overtime regulations (costing employers $1.5 billion).
Displacement of workers continues to push hardship in real lives such as this Milwaukee woman, who after 11 years working at a beef slaughterhouse plant was let go, and joins the ranks of displaced workers:
“We were shocked. One day we had a job, and the next we didn’t.”
[Donna] Jones worked 35-40 hours a week as a bagger on the kill floor at the slaughterhouse, at 1915 W. Canal St., for three years. Like most of the employees — some of whom had been there for decades — she had no inkling that her job had run its course. More than 600 jobs would eventually be lost.
Like Jones, Beatriz Hernandez, who worked for 11 years in Cargill’s parts department, remembers the intense emotions she and others felt after losing their jobs.
“We didn’t know what to do with ourselves,” Hernandez recalled. “‘Now what?’ we were all asking.”
Jones and Hernandez were among 438 displaced Cargill workers seeking out services through the Hire Center at Employ Milwaukee. According to Julie Cayo, director of policy and fund development for Employ Milwaukee, 2338 N. 27th St., services include help applying for unemployment, remedial math and reading, transportation, childcare assistance, resume writing, job training and job search.
To help displaced workers, President Obama pumped a significant $1.4 billion into retraining programs as the solution. Federal job retraining programs may be well-intentioned and may help some workers, but as the Department of Labor found a few years ago that such programs yielded “small or non-existent” benefits for laid-off workers. As the New York Times reported in 2009, the Labor department study found little difference in earnings and the chances of being rehired between laid-off people and those who had been retrained and those who hadn’t. Some of the reasons:
Many workers who have lost their jobs are older and had spent their lives working in one industry. In need of a job right away, many pick relatively short training programs, which often have marginal benefits. Job retraining is also ineffective without job creation, a point made by several economists who have long cautioned against placing too much stock in it. Finally, workers trying to pick a new field cannot predict the future of the labor market, especially in a time of economic upheaval.
“I can’t tell you with any degree of certainty, and I’ve been doing it for 20 years, what the hot jobs are going to be,” said one of the authors, Kenneth R. Troske, an economics professor at the University of Kentucky.
This is not an easy issue because it involves helping Americans develop the skills and knowledge for jobs that are not just “hot” today but those that will be around tomorrow. Given how technology has changed our economy in just the past few decades, it’s hard to tell what those jobs will be. At play is a fundamental shift in our economy that will require workers to potentially leave their past careers beyond to pursue something different.
While job creation is welcome, it’s not enough to say every month that because we add 150,000 jobs, the work of our nation’s leader(s) is done. This data challenges us to ask tough questions. How do we grow the economy to ensure there are ample opportunities for displaced workers? (Hint: It doesn’t start with more regulations.) How do we ensure that future workers will have the skills needed to stay relevant even as the economy changes? (Hint: It won’t just take throwing federal money around and hoping for the best either.)