Uneven Labor Market Recovery

August 14, 2014

This week’s Chart of the Week examines how total employment has changed by sector since the beginning of the recession. Recently, nonfarm employment recovered the total net jobs lost during the recession, but as the chart shows not all industries have fared equally during the recovery. It comes as little surprise that construction and manufacturing have been among the hardest hit, dropping about 20% and 12% respectively, for a combined loss of 3.1 million jobs. Additionally it should be noted that this does not account for population growth, making these losses more significant.

When the overall landscape of the economy changes so dramatically multiple issues can arise. First and most importantly, workers who lost jobs in sectors hit hardest have not seen their jobs return. As a result they must change careers and find work in a different industry, or risk being unemployed for the long-term. However, even if they are willing to make this career change they might not have the skills necessary to find a job in another industry. Similarly, expanding sectors may have difficulty finding qualified workers for their newly created positions. Both of these issues are inefficiencies that cause a drag on economic growth.