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Vanishing jobs
Structural change in the economy means many jobs are never going to come back.
January 9, 2004: 9:15 AM EST
Leslie Haggin Geary, CNN/Money staff writer

New York (CNN/Money) If Smokestack America has a geographic center, it may be Kannapolis, N.C. That's where locals used to produce sheets, towels and other linens at the Pillowtex manufacturing plant.

That was before this past summer, when Pillowtex went bankrupt, shuttered 16 plants and eliminated 5,500 jobs in North Carolina.

The closing made the town of Kannapolis a community of some 39,000 souls and birthplace of NASCAR legend Dale Earnhardt -- home to the biggest single job loss at a U.S. textile plant ever. It was also the most sweeping layoff in North Carolina history.

Kannapolis's job losses may cut wide and deep, but it's not the only community that's witnessed job losses in recent years.

Since 2001, some 2.9 million private sector jobs have been lost, according to the Bureau of Labor Statistics.

Many of those jobs won't ever return, even as the economy recovers, say experts. What's more, this isn't just true for blue-collar workers at places like Pillowtex.

"It's starting to happen in high-tech professions which we felt were 'ours,'" says Nariman Behravesh, chief economist at Global Insights, a consulting firm. "That's what's shocking people."

Automated? Outta here

An August Federal Reserve study estimates that as many as 79 percent of jobs are in industries where jobs have been lost forever, a phenomenon Fed economists call "structural change."

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Another estimate by Forester Research goes into more specifics. Forrester estimates that by 2015, some 3.3 million service-sector jobs will be shipped overseas or rendered obsolete by technology. Forester analyst John McCarthy says jobs that are most at risk require fewer skills, are automated or are highly portable.

Those include computer programming and software engineer jobs, that have long been leaving the country. By 2015, 26 percent of those jobs will be gone, says McCarthy.

Clerical jobs, like accounts receivable and payable, financial research, data-entry and various administrative services also are vulnerable since their tasks are either becoming automated or can be performed by less-expensive workers somewhere else.

 

Even government jobs are getting farmed out, albeit far more slowly, says Gartner Group's government analyst Rashid Sood.

"Off-shoring is a political hot potato," notes Sood.

Hot, but not verboten.

In Washington, for example, the state's Health Care Authority recently awarded a $3 million job to contractor Health Access, which outsourced computer-programming jobs to India.

The HCA needed to upgrade a computer system used to track participants in the state's insurance program. It wanted $5.4 million to get the job done but state lawmakers granted a budget of $3.6 million for the task, said agency spokesman Dave Wasser.

"They were the lowest bidder that met all the criteria," Wasser said. "Going overseas was part of what got them the bid lower."

Manufacturing still feels most pain

While things may be tougher for white-collar workers, it's still the men and women in manufacturing jobs who are most affected by structural change. Of the 2.9 million private-sector jobs that have been lost since 1991, a full 2.56 million are from manufacturing.

Robert DuPree, vice president of government relations at American Textile Manufacturers Institute, contends that inexpensive imports from China are to blame for the demise of American textiles. "We're in a fight for survival, and it's not getting better," he says.

(In fact, political pressure over jobs recently prompted the Bush administration to impose punitive tariffs on certain Chinese products. Click here to read more on that subject.)

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One out of every three textile jobs, like those at Pillowtex, that were filled back in 1997 when some 656,000 workers were employed by the industry is now gone, according to Labor Department figures. This year alone, the industry shed 49,500 jobs.

Things aren't much better for the men and women who make clothing. Even that quintessentially American company, Levi Strauss, closed its last U.S. production plant this September.

It's not alone. Since 1994, the apparel industry has shrunk by 35 percent from 848,800 jobs to 550,900 jobs today, Labor Department figures show.

The future doesn't look bright, either. "These apparel textile jobs aren't coming back," says Mark Levinson, chief economist at UNITE, the trade union for apparel and textile workers. "Once they're gone, they're gone."  Top of page




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.