Posted by: Michael Mandel on April 04
This morning’s employment report leaves no doubt that we are in a recession, with less-educated workers being hardest hit so far. Private sector employment has fallen for four straight months, since November (which will turn out to be the beginning of the recession…see my post here). The private sector decline of 300K since November is concentrated in construction, manufacturing, retail trade, and temp services—mostly industries which tend to employ less educated workers, on average.
Still staying strong are education and health care. Education has a lot of educated workers, not surprisingly, while health care has a fairly even mix of high-end and low-end workers The combination of private and public education, private health care services, and private social assistance have added 239K jobs since November. Employment in professional and technical services is up as well, adding 44K jobs. Without these areas, the economy would be in a steep decline.
Given the industries which are slumping and those which are still expanding, it makes sense that the unemployment rate has soared for less-educated workers since November, while actually falling for college-educated workers. For example, the unemployment rate for high school grades rose from 4.5% to 5.1%, while the unemployment rate for bachelor’s degree and higher fell from 2.2% to 2.1%
The question now is whether the layoffs on Wall Street will end up hitting educated workers hard enough to change this equation. Finance and insurance employment is only down by 13K since November, but surely more is coming.
I’m going to do more analysis of the jobs report later in the day (Update: As of Sunday, not yet)
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.