Why some jobs are gone, gone, gone

January 12, 2010 - 0 comments

New York -- The U.S. labor market is losing jobs it may have lost with or without a recession, which abruptly accelerated some long established trends, economists said.

As a relatively small example, the Labor Department said jobs in record shops had fallen 23 percent in November compared with 2007, while photofinishing jobs had declined 46 percent -- both victims of the digital age, not economic turmoil, The Wall Street Journal reported Tuesday.

On a larger scale, U.S. manufacturing jobs have been in decline since 1997.

In the housing boom that started roughly at that time, many laid off manufacturing personnel turned to construction jobs, which suddenly shed 1.6 million jobs beginning two years ago.

"That was a very unhealthy part of the economy," said Harvard University economist Lawrence Katz, who predicted many construction jobs will not return.

Similarly, New York University Stern School of Business economist Thomas Philippon said the financial sector was bloated before the recession hit.

The industry was about 20 percent over-sized, but has only lost 6.6 percent of its workforce -- almost 550,000 jobs -- since the recession hit.

Consequently, the financial sector could lose more jobs, Philippon said.