CHANGING JOBS

There was good reason for the absence of celebration recently when it was announced that the number of jobs in Maine has finally returned to the June 2001 level. The reason is that the thousands of high-paying jobs that have been lost in recent years have been replaced by lower-paying ones, often without benefits.

Maine is not alone in this situation. Nationally, 81 percent of the total job growth in the last year has been in low-end occupations such as sales, maintenance services and transportation, according to Stephen Roach, chief economist for Morgan Stanley. “While there has been an increase in job creation over the past four months – an unusually belated and anemic spurt by historical standards – the bulk of the activity has been at the low end of the quality spectrum,” Mr. Roach wrote in a recent column in The New York Times.

A quarter of the recent job growth was in the sector comprised of restaurants, temporary hiring agencies and building services. Another 19 percent of the new hires were in clothing stores, courier services, hotels, grocery stores, hospitals, social work agencies, business support companies and laundry services. While there has also been increased demand for lawyers, engineers and bankers, Mr. Roach concludes that the contribution of new jobs in low-end industries has been twice that attributable to high-end industries.

The quality of the new jobs will have far-reaching effects. Many workers who lost good-paying jobs and are now employed in the service sector, for example, have not cut back on family spending. Borrowing against homes and credit card debt are at record highs. Many of the newly created jobs do not include retirement and health benefits comparable to the jobs that were lost. These differences will eventually place a drag on the national economy.

In Maine, 4,700 jobs have been added since November 2001. However, if job growth had kept pace with population growth, Maine would have gained about 10,000 jobs. The new jobs are primarily in the health care, social assistance, retail and hospitality services, as well as in government and construction. There has also been rapid growth among those who call themselves self-employed. This group includes many former manufacturing workers who have turned to entrepreneurial ventures not to fulfill a lifelong dream, but just to make money. Many of the lost jobs were in the manufacturing sector. Maine lost 21 percent of its manufacturing jobs in the last three years, the third highest rate in the country behind New Hampshire and Vermont.

The numbers show that without the governor’s efforts to maintain jobs at three paper companies that threatened to close their mills the situation would have been much worse. As it is, the Maine Department of Labor is re-training many laid off manufacturing workers, encouraging them to develop the skills to work in growing fields, such as biomedical technology. This approach of shoring up traditional industries, while also encouraging growth in burgeoning fields is a prudent one.