The economy has been growing for nearly two years since the bottom of the recession, yet employment problems remain. The 275 metropolitan areas in the United States had a total loss of 533,000 jobs from August 2002 to the same month this year.
As serious as this sounds, the total loss was only 0.3 percent for the year. In addition, while 61 percent of the metro areas (168) did lose jobs, 103 metro areas added jobs and four remained unchanged.
Let's look at this current situation in more detail. The major decrease in employment was in manufacturing, where 420,500 jobs were lost -- a 3.7 percent decline.
At the same time, education and health services showed a 223,000 increase in employment, a 1.7 percent gain.
These changes reflect an ongoing shift in the economy. First, manufacturing is subject to competition from abroad. Second, new equipment continues to replace workers increasing productivity. Which results in the third factor, a better return for stockholders who increasingly demand performance or the heads of corporate executives.
Education and health services are, to date, not subject to foreign competition and seem to use new technology as a complement to labor in the face of increasing demand. In addition, education and health services are not as driven by Wall Street pressures as manufacturing.
Other losing sectors include information (telecommunications, broadcasting, data processing, publishing) where the decline in employment was 97,100 (3.3 percent). This represents a retrenchment from the 1990s. Transportation and utilities also had a significant decline (93,800 jobs, 2.4 percent) that represents a mixture of reaction to the decline in manufacturing and a consolidation of the industries involved.
Among the winners were small gains in financial services, leisure and hospitality, and retail trade. These three sectors together accounted for 79,200 additional jobs.
The bright spots for the Midwest were three metro areas in the top ten of the nation. These were Elkhart-Goshen, plus Green Bay and Madison in Wisconsin. Elkhart-Goshen ranked second in the nation with a 3.9 percent job gain.
Only one other metro area in Indiana managed to gain jobs in the past year. That was Muncie, which ranked 27th with a 1.5 percent increase. The remaining nine metro areas in the state declined, with eight of those ranking 229th or lower in the nation.
Lafayette and Kokomo both had losses in excess of 3 percent. The Indianapolis MSA lost 19,600 jobs (2.2 percent of its total).
But manufacturing was not the undoing of the state. Professional and business services dropped 13,800 jobs (-6.5 percent) with 9,400 of those jobs lost in the Indianapolis metro area. Manufacturing employment did fall by more than 2,000 jobs in the Gary, Indianapolis, and Fort Wayne metro areas respectively, but increased by 3,800 jobs in Elkhart-Goshen.
The net loss of manufacturing jobs for Indiana was 5,800, or 1.5 percent, well below the nation's 3.7 percent decline in the same sector.
The mixed picture that these numbers provide is consistent with a turnaround in the employment situation. With the economy expanding, we may expect to see more employment bright spots in the future.
Morton Marcus is an economist at the Kelley School of Business, Indiana University. His column solely represents the opinion of the writer and not necessarily that of The Times.
Email This Page!