The shadow of the recession that began in 2007 finally seems to have passed. The economy has now replaced all the jobs lost during the downturn, and job openings are at the highest level in nearly seven years.
But the economy hasn’t gone back to the way it was, as it did following most other recessions of the past 60 years. The job market today looks considerably different than it did seven years ago, with some workers getting back to normal but large groups still on the sidelines. As the economy has healed, it has also undergone wrenching structural changes, creating new groups of winners and losers.
A breakdown of employment by age group, for instance, shows older workers represent a much larger portion of the labor force than they used to, while middle-aged workers, who ought to be in their prime earning years, are dropping out of the job market. Here’s a breakdown of how total employment has changed from December 2007, the first year of the recession, to now:
These numbers (which are different from another government survey showing total employment has overtaken its prior peak) show that workers over 55 represent virtually all the jobs that have been regained during the past several years. In a way that’s not surprising. Baby boomers have been aging into that group, naturally swelling its size. More people are working longer, to make up for lost or inadequate retirement savings. And some retired people have gone back to work to help pay the bills.
It’s troubling, however, that the number of middle-aged workers has fallen by roughly 5.5 million. Part of that is the aging of the workforce, as baby boomers move from one age group to another. But for every age group under 55, the percentage of people working has fallen significantly — especially for those between 35 and 55.
Breaking down the job totals by sector explains why. There are about 1.5 million fewer construction jobs now than at the end of 2007, and 1.6 million fewer manufacturing jobs. Those two sectors account for nearly half the 7.3 million jobs lost in four of the five age categories. The rest of the lost jobs are spread across sectors such as retail, information, finance and government.
Men are still down about 1 million jobs from 2007 levels, while women are ahead by about 540,000. That’s probably because more women work in stable fields such as healthcare and education, whereas men tend to work in more-cyclical businesses. Women have also been earning more bachelor's and graduate degrees, giving them better qualifications. And while construction and manufacturing have been adding jobs and will probably continue to, employment in those fields may not reach pre-recession levels for years.
College grads suffered the least during the recession, and there are now about 5 million more jobs for college grads than there were prior to the recession. That’s consistent with a complex information economy that rewards workers with the best skills. High school grads with no college, by contrast, continue to find it tough to get ahead, with three million fewer jobs than in 2007, much of that shortfall overlapping with the drawdown in manufacturing and construction.
There are still many ways to prosper in the U.S. economy, but the storm that arrived in 2007 rearranged the landscape and changed some of the pathways to success. Jobs that haven’t rematerialized by now probably never will.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
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