NECN: Jobs recovery fizzles
As originally appearing in NECN

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(NECN: Peter Howe, Boston) – With a blast of bad jobs and economic data Thursday, economists are bracing for the U.S. Labor Department to report on Friday morning weak job growth in May – and no change in the 8.1 percent national unemployment rate.

Payroll processor ADP said its monthly study found private-sector employers added just 133,000 jobs in May, well below projections, and the Commerce Department lowered its estimate for first-quarter economic growth from 2.2 percent to 1.9 percent. Weekly claims for new jobless benefits, a key barometer, jumped by 10,000 to a seasonally adjusted 383,000.

All in all, what was a good winter for job creation in New England and America has turned to a sputtering spring, and a major new regional survey released Thursday morning by the New England Economic Partnership suggested this may be the new normal for the next three to five years: Growth, but very slow growth, maybe at best 3 percent for the economy overall each year and 2 percent in the number of jobs.

NEEP also made a state-by-state forecast of where it expects jobless rates to go in the future. Following are the current April unemployment rates, in percent, followed by what NEEP is predicting to be the annual average monthly unemployment rate in 2014, by state from north to south:

State: April 2012/Projected 2014

  • – Maine:  7.2/6.6
  • – New Hampshire:  5.0/4.4
  • – Vermont: 4.6/4.6
  • – Massachusetts:  6.3/6.2
  • – Rhode Island:  11.2/8.7
  • – Connecticut:  7.7/6.7

In many states, local forecasters say unemployment rates are unlikely to budge much because as the economy gradually improves, more and more people who have given up looking for work and are counted as “discouraged” workers who are no longer members of the labor force will resume looking for work and thus resume being counted in the labor force. Even if jobs increase, if the number of officially-counted workers does too, that keeps the unemployment percentage rate from dropping.

Why does NEEP see such sluggish growth? Gittell said it’s largely because of the size and intractability of problems weighing down on economic recovery and growth like the European fiscal and debt crisis; the seemingly endless depression in U.S. housing markets and foreclosures; and the fiscal fiasco gripping Washington with massive battles looming over tax rates and spending cuts in a volatile election year.

“Those fundamentals in the macro economy, in the global economy, make it difficult for the New England regional economy to buck that trend and to really grow at a faster rate, and we’re still kind of stuck in that,” Gittell said. “The forecast really is we don’t see that changing over the course of the next three- to five-year period.”

What makes it even worse: At a day-long forum at the Federal Reserve Bank of Boston cosponsored by The New England Council, many NEEP members said more and more businesses are saying they have jobs to offer — but they can’t find the right people in New England with the right skill sets to fill them.

“There are an awful lot of employers, medium-sized and even large-sized businesses, throughout New England, that have called The New England Council to say: We have openings, but the applicants that we’re looking at do not have the skills,” said Council CEO James T. Brett.

“There’s this mismatch between the needs of growing industries and the skill level of the workforce,” said Gittell, a former University of New Hampshire economics professor who now serves as chancellor of the state’s nine-college community college system. “How do you better align education — and in particular higher education — with the needs of employers and in particular those employers which are growing, which are highly competitive and which could add workers.”

Gittell said he’s struck by hearing from businesses that it’s not just “hard skills” they find lacking among candidates – in particular, science, technology, engineering and mathematics skills – but even “soft skills,” such as person communications skills, teamwork and basic issues around showing up for work and dealing with the boss.

It’s an indication of what makes a recession as deep and long as this one so insidious: So many people 2009 or 2010 or 2011 never got the kind of entry-level job that enables them to get their second job or third job and launch a career, and the longer they go without that experience, the harder it is for them to get a foot on the job ladder.

With videographer Daniel J. Ferrigan.

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