Nation's 'jobless recovery' ending with workers added in many sectors now Hiring

January 23, 1994|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Bureau of Labor StatisticsWashington Bureau

WASHINGTON -- The Clinton administration expects two million new jobs to be created this year, and Mayo A. Shattuck III will provide 200 of them at his booming Baltimore-based investment firm.

Another 400 will be added by Roland S. Boreham Jr., whose Arkansas-headquartered electrical company is defying the general downturn in manufacturing. John G. Adler will be recruiting up to 100 additional staff to help boost overseas sales of his Californian computer software, and Walter C. Minnick in Idaho needs 1,000 more workers this year for his specialty lumber company to keep up with exploding demand from the building industry.

The hiring plans of these company executives -- representing services, manufacturing, construction and high-technology -- could signal the waning of one of the most joyless periods of modern economic history, almost three years that, on average, have produced barely half the annual number of jobs needed just to keep pace with new entrants into the workplace.

"The 'jobless recovery' is no more," declared Allen Sinai, chief economist of Lehman Brothers, the New York investment house, in a recent newsletter to clients that was headlined "Light at the End of the Tunnel."

In his current economic analysis, headed "U.S. on a Roll?" he is even more bullish, increasing his estimate for nonfarm job growth this month from the 150,000-175,000 range to 175,000-225,000, and contradicting the naysayers who predict a slow-down in the first quarter of this year with this assertion: "At this time, the data do not suggest any abrupt reversal or tapering off in the pace of growth."

The Federal Reserve added its muted tones to the chorus of optimism last week. In the latest issue of its "Beige Book," a region-by-region survey of the economy between the end of November and Jan. 10, it reported: "Economic activity continued to expand with signs of acceleration in some sectors."

It noted more factory hiring and even found scattered labor shortages -- of skilled production workers and trades people in Chicago; of temporary workers in Dallas; and of construction workers in Atlanta, Kansas City and San Francisco.

Until now, job growth since the recession has been limited largely to three sectors -- retail trade, services and government. Retail trade and services are traditionally low-paying employment areas. Recruitment now appears to be spreading slowly to other better-paying industries.

But continuing to plague full recovery is the constant downsizing of major corporations, which will cost thousands more jobs. Just 10 days ago GTE Corp. announced cuts of 17,000 jobs over the next three years, following in the footsteps of several local phone companies, including Pacific Bell which recently announced -Z plans to reduce employment by 10,000 jobs over the next several years.

The impact of the slow job growth is evident: In the 33 months after the recession ended in March 1991, only 2.7 million jobs were created. That's just 2.5 percent of the national payroll compared with an average of 10 percent during the same period after the previous three major recessions.

There is no prospect of matching that historical rebound any time soon. But jobs should come on stream steadily enough this year to reduce the unemployment rate to between 6.4 and 6 percent this year from its average 7.4 percent in 1992 and 6.8 percent in 1993. That would represent gradual progress toward the ultimate goal of "full employment," which many economists judge to be an unemployment rate of 5 percent.

The best place to look for work currently is Florida, where employment is expected to grow 4.1 percent this year, according to a regional survey by economic analysts DRI/McGraw-Hill, of Lexington, Mass.

Other favorable spots for job hunters: Nevada, Vermont, Texas, Louisiana, Arkansas, Georgia, and Minnesota. The worst places: Alaska and California. Maryland, with a projected 1994 jobs growth of 1.9 percent, ranks 39th in the state-by-state analysis.

The industries that will be expanding most will be residential care for the sick and elderly, computers and data processing, health services, child day care, business services, and management and public relations, according to the Bureau of Labor Statistics.

A poll conducted for the American Business Conference of 100 chief executives of U.S. mid-sized growth companies found 25 percent expecting to hire new workers this quarter. Last fall, only 2 percent were ready to increase their payrolls.

"The last four quarters we found almost flat employment generation within our member companies," said Barry Rogstad, the Conference's president. "That was highly extraordinary at a time when their margins were improving and their sales and shipments were going up. But they were not going up sufficiently to warrant a permanent bet on this recovery. There has been a great deal of caution."

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