Despite January gains, troubled job market has long way to go

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Despite January gains, troubled job market has long way to go
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  • Job applicant fills out forms at Missouri Career Center
  • Job applicants fill out forms at Missouri Career Center
  • Job applicant fills out forms at Missouri Career Center

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Mary Thomas paid a visit last week to a venue she'd happily managed to avoid over nearly three decades of continuous employment - a state benefits office.

"It's a big change," said Thomas, 51, as she waited in line last week at the Missouri Career Center in Florrisant.

She had been laid off at the end of December, when the Smurfit-Stone Container Corporation moved the payroll position she'd held for 12 years to a location in Georgia.

Thomas's story wasn't captured in January's unexpectedly strong employment figures. The news raised hopes on Main Street as well as Wall Street that Americans might soon get beyond the point where 28-year professionals have to collect small checks from state bureaucracies. But as jobseekers and economists can attest, even strong gains continue to leave millions of out-of-work Americans on the sidelines.

National unemployment, at 8.3 percent, hit a three-year low last month. Mass layoffs are in decline. And the GDP, up 2.8 percent in the fourth quarter of 2011, indicates the economic downturn is loosening its choke hold on consumer spending, a key driver of job creation.

Yet the crisis that at one point displaced 14 million American workers -- and resulted in more than 60,000 jobs lost in St. Louis -- is far from over. 

In her analysis of the January jobs numbers, Economic Policy Institute economist Heidi Shierholtz emphasized that the U.S. began the new year with fewer jobs than existed a decade ago, in 2001.

More troubling, a record 43.7 percent of today's unemployed workers are taking more than six months to land another job.

Those who are finding work often have to make compromises. Brittney Nicholson, 24, learned last week she had dodged the lingering humiliation of long-term unemployment.  

A resident of downtown St. Louis, Nicholson arrived Wednesday at the Florissant career center with "exciting news" - an offer to work as an administrative assistant for a financial services corporation.

Nicholson, who lost her job at a national bank branch in October, confessed the job isn't even remotely connected to the bachelor's degree in criminal justice she earned last year at Harris-Stowe University.

Still, with unemployment near 15 percent for people aged 16 and 24, Nicholson will take what she can get while working toward her objective of one day serving in the U.S. Marshals Service.

Nicholson views the administrative assistant position, which eventually will offer education benefits, as a step in that direction.

"In this economy, you just have to keep applying yourself," Nicholson said. "A bachelor's is OK. But everyone is looking for a master's now."

Unfortunately, the employment market Nicholson encounters upon receiving a graduate degree may not look entirely different than it does now.

Shierholtz, in her jobs outlook, estimated that the U.S. needs 84 consecutive months of payroll growth at the January level - when 234,000 jobs were added - to drop the unemployment rate below 5 percent, generally considered full employment.

Howard Wall, director of the Institute for the Study of Economics and the Environment at Lindenwood University, says employment simply isn't growing in step with the expansion of U.S. population.

"The payroll numbers (for January) show one good month which follows several terrible months," said Wall, a former regional economics adviser with the Federal Reserve Bank of St. Louis. "And it really wasn't that good of a month, which shows you how far we have to go."

December unemployment in St. Louis stood at 8.5 percent.

When Wall applies a formula that adds discouraged workers who've stopped looking for a job to the mix, the "true unemployment" number locally jumps to 10 percent.

A month into her job search, Thomas is dispirited by the shortage of full-time opportunities in corporate payroll departments.

The hesitation to add full-time payroll reflects a sense of caution among employers emerging from a brutal recession and an equally tough recovery.

"We're seeing companies trying to keep costs in check and to pay down their debts, just as a family would," said Gary Thayer, the chief macro strategist with Wells Fargo Advisors in St. Louis. "This basically means there is a reluctance to take on a lot of new employees until they are confident the recovery will be sustained."

Echoing the findings of other economists, Wall cites post-recession evidence that hiring is no longer solely a reflection of employer optimism in the economy.

Instead, he said, many businesses have turned to technology to replace the jobs held by human beings prior to the downturn.

For the unemployed, diminished hiring opportunities pose yet another setback an agonizingly slow recovery, exposing them to the harsh reality of supply and demand.

Simply put, companies are loathe to hire when consumers are loathe to spend.

"Unfortunately, it can be a vicious cycle," said Thayer. "We need to cross the threshold where (consumer) confidence comes back. And in a slow-growth economy, it takes longer."

Aggravating factors have added to employer reservations, including the uncertain outcome of the presidential election, the still-struggling housing market and worries over how small business will be affected by the impact of the 2014 rollout of the National Health Care Act.

Still, some hiring sectors are showing improvement.

Thayer believes the steady uptick of jobs in the health field bodes particularly well for job-seekers in St. Louis.

Heather Tolen of Moline Acres certainly hopes so.

Out of work since losing her job as a cashier with a big box retailer six months ago, Tolen, 26, recently completed course work certifying her as a pharmaceutical technician.

The first dividend was an interview with Express Scripts.

Poring over websites at the state career center in Florissant last Wednesday, Tolen had no intention of sitting idly by while waiting for Express Scripts to call back.

"I'm really putting myself out there," she said. "In this economy, you really have to be ambitious. You need to look out for yourself, because nobody else is looking out for you."

Steve Giegerich covers the manufacturing and employment for the Post-Dispatch. He blogs on STL JobsWatch. Follow him on Twitter @stevegiegerich and the Business section @postdispatchbiz.

Copyright 2012 stltoday.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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