Economists have seen this type of structural change, which happens over the long term but is accelerated by a downturn, many times before.
“This always happens in recessions,” says John Schmitt, a senior economist with the Center for Economic and Policy Research. “Employers see them as an opportunity to clean house and then get ready for the next big move in the labor market. Or in the product market as well.”
Economists like Erica Groshen at the Federal Reserve Bank of New York have argued that bigger structural job losses help explain why the last two economic recoveries were jobless — that is, why job expansion lagged far behind overall growth.
But there is reason to think restructuring may take a bigger toll this time around. The percentage of unemployed workers who were permanently let go has hovered at a record high of over 50 percent for several months.
Additionally, the unemployment numbers show a notable split in the labor pool, with most unemployed workers finding jobs after a relatively short period of time, but a sizable chunk of the labor force unable to find new work even after months or years of searching. This group — comprising generally older workers — has pulled up the average length of time that a current worker has been unemployed to a record high of 33 weeks as of April. The percentage of unemployed people who have been looking for jobs for more than six months is at 45.9 percent, the highest in at least six decades.
And so the question is what kinds of policy responses can help workers like Ms. Norton who are falling further and further behind in the economic recovery, and are at risk of falling out of the middle class.
Ms. Norton has spent most of the last two years working part time at Wal-Mart as a cashier, bringing home about a third of what she had earned as an administrative assistant. Besides the hit to her pocketbook, she grew frustrated that the work has not tapped her full potential.
“A monkey could do what I do,” she says of her work as a cashier. “Actually, a monkey would get bored.”
Ms. Norton says she cannot find any government programs to help her strengthen the “thin bootstraps” she intends to pull herself up by. Because of the Wal-Mart job, she has been ineligible for unemployment benefits, and she says she made too much money to qualify for food stamps or Medicaid last year.
“If you’re not a minority, or not handicapped, or not a young parent, or not a veteran, or not in some other certain category, your hope of finding help and any hope of finding work out there is basically nil,” Ms. Norton says. “I know. I’ve looked.”
Of course, just as there is a structural decline in some industries, others enjoy structural growth (the “creative” part of “creative destruction”). The key is to prepare the group of workers left behind for the growing industry.
“You can bring the jobs back for some of these people, but they won’t be in the same place,” says Thomas Anton Kochan, a professor of management at the Massachusetts Institute of Technology.
The White House has publicly challenged the idea that structural unemployment is a big problem, with Christina D. Romer, the Council of Economic Advisers chairwoman, instead emphasizing that stronger economic growth is what’s needed. Still, the administration has allocated dollars for retraining in both the 2009 stimulus package and other legislation, largely for clean technology jobs.
Ms. Norton, for her part, may be reluctant to acknowledge that many of her traditional administrative assistant skills are obsolete, but she has tried to retrain — or as she puts it, adapt her existing skills — to a new career in the expanding health care industry.
Even that has proved difficult.
She attended an eight-month course last year, on a $17,000 student loan, to obtain certification as a medical assistant. She was trained to do front-office work, like billing, as well as back-office work, like giving injections and drawing blood.
The school that trained her, though, neglected to inform her that local employers require at least a year’s worth of experience — generally done through volunteering at a clinic — before hiring someone for a paid job in the field.
She says she cannot afford to spend a year volunteering, especially with her student loan coming due soon. She has one prospect for part-time administrative work in Los Angeles — where she once had her own administrative support and secretarial services business, SilverKeys — but she does not have the money to relocate.
“If I had $3,000 in my pocket right now, I would pack up my S.U.V., grab my dog and go straight back,” she says. “That’s my only answer.”
With so few local job prospects and most of her possessions of value already liquidated she has considered selling her blood to help pay for the move. But she says she cannot find a market for that, either; blood collection agencies, she said, told her they do not buy her blood type.
“Sometimes I think I’d be better off in jail,” she says, only half joking. “I’d have three meals a day and structure in my life. I’d be able to go to school. I’d have more opportunities if I were an inmate than I do here trying to be a contributing member of society.”