- WASHINGTON (Reuters) -- After
a bloodletting that cost 2.8 million jobs in just over three years, U.S.
factory payrolls are expected to soon start inching higher, economists
believe. But many manufacturing jobs may never come back.
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- "The declines are just about over," said UBS
economist Jim O'Sullivan. He predicted the first rise in factory employment
since July 2000 could come as early as next week, when November payrolls
are released, or perhaps one month later.
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- While employment outside of manufacturing has begun to
grow after a long jobless recovery from the recession, factory jobs have
remained elusive -- particularly in rust-belt states which could be key
to President Bush in the 2004 election.
-
- But the pace of factory layoffs has finally begun to
ease. During the slump, job cuts averaged 134,000 a month. Since August,
that has dropped to just 30,000, and October's 24,000 decline was the smallest
in nearly three years.
-
- Factory data also suggest jobs are poised to expand,
with the Institute for Supply Management's employment index hitting 47.7
in October -- inches from the break-even mark of 47.8. O'Sullivan said
payrolls tend to rise when the index is above 47.8 and fall when it is
below.
-
- But just try telling that to an unemployed factory worker.
-
- Kerry Battles, 51, was laid off from his job at a Boeing
Co. aircraft plant in Wichita, Kansas, in May 2002 after 12 years with
the company.
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- His wife, Mary, an electrical panel assembler at competitor
Raytheon Co., worried she too, would lose her job. The factory cut costs,
and six months ago the couple began to hope Mary had escaped the massive
layoffs devastating the industry. But this month the ax fell, and Mary
was laid off too.
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- "It's not getting better, it is getting worse. It
is definitely getting worse," said Kerry Battles. "All three
of the aircraft companies here in town are still laying off, still sending
work out of the country. It's not good."
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- A DYING SECTOR
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- Economists agree most of the factory jobs lost during
and since the 2001 recession are gone for good and warn that no one should
expect a huge rebound in employment even when the layoffs finally come
to an end.
-
- Goldman Sachs economist Andrew Tilton said while about
a million jobs have gone to cheaper overseas labor markets, most layoffs
can be chalked up to a 12.8 percent gain in productivity in the last three
years, allowing employers to eliminate more than a tenth of the factory
work force.
-
- "Nearly two-thirds of the jobs lost did not 'go'
anywhere; they simply disappeared as more efficient production processes
reduced the labor needed to produce a given amount of goods," Tilton
said.
-
- O'Sullivan believes factories will rehire long enough
to allow businesses to restock depleted inventories, boosting payrolls
for a few months into early 2004. But in the long run, he warned, jobs
will remain hard to come by.
-
- "I think it's like farming -- where over time, a
smaller and smaller share of the population are in manufacturing, even
though output continues to grow rapidly, helped by stronger productivity,"
O'Sullivan said.
-
- The decline of the factory sector is not lost on Kerry
Battles. After his layoff, he returned to school to study computer science
and will soon have a degree. In the meantime, he's found a short-term job
with the Machinists Union helping newly unemployed workers grapple with
retraining options.
-
- "Every day, all my clients are laid-off aircraft
workers, and there's thousands of them. Probably after the first of the
year, or maybe even before then, we're going to have so many people we're
not going to be able to take care of them," he said.
-
- "And if they don't turn things around soon, this
whole town's just going to be nothing."
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- http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=3908671
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