Job losses slow in April, but the toll is still heavy
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The decline in the numbers of manufacturing jobs lost in April may be a sign of even worse news: The country is running out of manufacturing jobs to lose.
The nation's economy shed 539,000 nonfarm jobs in April, with 149,000 of those in manufacturing. That loss was less than the 180,000 manufacturing jobs lost in March, but Dean Baker, an economist with the Center for Economic and Policy Research in Washington, said that is not good news.
"Most of the job loss that can plausibly take place has already taken place," Mr. Baker said. In addition to the job losses in the automobile industry and associated sectors, he said the American textile industry, which provided 1 million jobs in the early 1990s suffered huge losses of the remaining jobs.
From April 2008 to April 2009 the number of U.S. jobs in mills that make textiles and those that make products from textiles dropped by half, from 307,000 last year to 153,200 last month.
There was some room for optimism, though. The Bureau of Labor Statistics said that unemployment increased in April by four-tenths of a percentage point, from 8.5 percent in March to 8.9 percent. But the number of jobs lost, 539,000, was the lowest since October. Economic forecasters had been expecting upward of 620,000.
Still, the toll on manufacturing has been heavy.
"Manufacturing is just being wiped out, there's no other way to describe it," said Auggie Tantillo, the executive director of the American Manufacturing Trade Action Coalition, a corporate lobbying group. The sector lost 5.2 million jobs in the last decade, from April 1999 to April 2009.
While Mr. Tantillo's organization represents manufacturing companies, his comments were practically echoed by Leo Gerard, the president of the United Steel Workers International, the nation's largest manufacturing union.
"This recession is crushing manufacturing," Mr. Gerard said. "Manufacturing jobs are essential to a true and sustained recovery. No real economy can be based on just 'service' sector minimum wage Wal-Mart jobs and an unregulated Wall Street 'finance' sector that will bubble and burst. America must produce goods that add real value to the economy."
Both Mr. Tantillo and Mr. Gerard said government policies, such as tariffs that encourage off-shoring jobs, have weakened the manufacturing base in the United States.
"Manufacturing is key to our economic revival," Mr. Gerard said.
In the first four months of 2009 the nation lost nearly 500,000 manufacturing jobs. By contrast over 12 months, from April 2008 to April 2009, the financial industry including banks, credit companies and insurers lost 352,000 jobs.
He noted that while a "Buy American" provision in the stimulus bill has been watered down, the bank bailout is only for banks headquartered in the United States, pointing out that protectionism in the financial industry is palatable, but not in manufacturing.
"The financial industry has more political influence," Mr. Baker said.
Mr. Baker, who was the first to predict the end of the housing bubble, said the value of the dollar in the world markets has to drop to become competitive with other currency. That, in turn, will spark manufacturing in the United States, he said, because it is implausible that the country will be able to sustain itself as a service economy.
The manufacturing decline also affected retail employment, which showed a decrease of 47,000 jobs in April, 9,000 of those jobs lost being at automobile dealerships. Employment in department stores dropped by 14,000 in April.
Construction employment was down by 110,000 last month with losses in all portions of the sector, which includes buildings, civil engineering projects and specialty trade contracting.
Drops in building and contracting saw a retail component as well: Stores selling building materials and garden supplies dropped 8,000 jobs this past month.
Since there were less manufactured goods to move, the people moving them weren't as needed: 16,000 fewer people were employed in truck transportation and 8,000 fewer people were working in warehousing and storage in April than in March.
Health care jobs were a ray of good news for the economy. Employment in the sector rose by 17,000 for April. The Labor Department said the sector has averaged growth of 17,000 a month for 2009, which is down from an average growth of 30,000 jobs a month in 2008.
The federal government also was hiring in April, adding 66,000 jobs which was mostly attributable to the hiring of temporary workers for the 2010 U.S. Census.
The Bureau of Labor Statistics of the U.S. Department of Labor also reported yesterday that 5.7 million jobs have been lost in the recession since it began in December 2007.
The numbers released yesterday showed a disparity between unemployment rates for adult men, who saw an increase in their unemployment rate from 8.8 percent in March to 9.4 percent in April, and adult women, for whom the unemployment rate of 7.1 percent held fairly steady.
In the racial breakdown of unemployment, the rates for whites (8 percent) and Hispanics (11.3 percent) were steady, according to the government figures, but the rate for blacks rose from March when it was 13.3 percent to 15 percent in April.
First Published May 9, 2009 12:00 am