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Jobs Grow, Optimism Shrinks in Wisconsin

Displaced workers find new employment, but they're earning less in a service economy.

August 09, 2004|Warren Vieth | Times Staff Writer

GREEN BAY, Wis. — For several months, the city known as "Titletown" -- for its football prowess -- has been earning recognition of a different sort. Green Bay was the nation's fifth-fastest-growing job market in June. The previous month, it tied Laredo, Texas, for first place.

But Steve Anderson sees little to celebrate.

"Supposedly there's a whole mess of new jobs being created, but they're not jobs we can live with," said Anderson, a 50-year-old factory worker whose career in manufacturing will come to an end today.

"Look at this," he said, leafing through a stack of recent job postings. "They're paying $9 an hour. Five years ago, it would have paid maybe $18.... This one is paying $12.... Here's one for $8.75.... These are the great new jobs that are opening up in Green Bay."

Anderson's frustration reflects a characteristic of the current recovery. Yes, the U.S. economy is creating new jobs. But to some of the workers who have been displaced during the downturn of the last three years, the new jobs look a lot worse than their old jobs.

Since December, Wisconsin has recovered all of the jobs it lost over the previous three years, turning a 76,000-job deficit into a net gain of 700.

But not all jobs are created equal. Although the lion's share of Wisconsin's losses were in the high-paying manufacturing sector, most of the gains have been in service industries with widely varying pay scales, some quite low.

In effect, the state has been swapping well-paying factory jobs for positions in restaurants, hotels, casinos, hospitals, banks, insurance firms and temp agencies.

The tectonic shifts within Wisconsin's labor force help explain why some workers are still feeling grumpy, despite six months of job growth. In manufacturing-intensive swing states such as Wisconsin, where George W. Bush trailed Al Gore by a mere 5,708 votes in 2000, the issue could pack a punch in this year's presidential race.

"The pain and suffering is a little more acute here," said Dennis K. Winters, vice president of NorthStar Economics in Madison, the state capital.

Nationwide, employers have added 1.5 million jobs since last August, restoring more than half of the 2.6 million lost during the first 2 1/2 years of President's Bush's term.

But new Labor Department figures released Friday called into question the strength of the recovery and returned job creation to the forefront of the election debate.

Employment growth slowed to an anemic 32,000 new payroll positions in July, and June's gain was revised down to 78,000 -- far short of the 295,000 average of the previous three months.

The new numbers also brought attention to the nagging question of job quality: As the nation struggles to recover from the longest employment slump since World War II, are the new jobs as good as the jobs that were lost?

Democratic challenger Sen. John F. Kerry refers to statistics suggesting that most of the job growth has been in industries such as leisure and hospitality that pay below-average wages. One study cited by his campaign concluded that jobs in the growing industries pay on average $9,160 less per year than jobs in contracting industries.

The president and his supporters insist the new jobs are as good or better than the old jobs. They offer their own set of statistics suggesting that the majority of the jobs created over the last year are in occupations paying above-average wages, such as management, education and healthcare.

Mark Zandi, chief economist of in West Chester, Pa., has crunched the numbers that both the Kerry and Bush campaigns use. He is convinced that the quality of jobs has declined.

"We lost a large number of very highly compensated jobs. That was unique to this downturn," Zandi said. "The jobs that are being created now, at least over the past year, are still predominately lower-paying." Some analysts said the shift helped explain why workers' average hourly earnings failed to keep pace with inflation in recent months.

The issue of job quality is a growing concern in Green Bay, which may be a harbinger of workplace changes coming to other factory towns.

Employers in the Green Bay metro area, which has a population of 235,000 and a labor force of 146,000, added 6,100 jobs during the 12 months ended in June. Of those, 1,300 were in higher-paying manufacturing and construction, and 4,800 in services with varying pay scales.

The biggest increase in the services sector -- 2,200 jobs -- was in the leisure and hospitality fields, which paid its workers an average of $9 an hour last year, less than half the $18.55 average for all Green Bay employees.

"As the mayor, I'm trying to promote the higher-wage job ... but we do our share of food service here," said James J. Schmitt. "When you lose some high-end, union paper-making jobs, I'll admit, it is difficult to replace that dollar for dollar."

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