The Joyless Recovery
By EDMUND L. ANDREWS
ROCKFORD, Ill. -- THE stock market is surging and the economy appears to be booming, but Judith Pike is getting out of business. "I'm finished; I'm out of here," said Mrs. Pike, owner of Acme Grinding, whose customers have been vanishing and whose work force has shrunk from 40 to 4. Two days before Christmas, Mrs. Pike sold her business and more than 40 machines used to grind and finish metal parts. "It will be for pennies on the dollar," she said. "Less than what it cost to buy just one of these machines."
Considering that nearly every scrap of data suggests that the American economy has finally climbed out of the doldrums and is humming at its fastest pace in at least four years, Mrs. Pike's timing may seem unfortunate. But here in Rockford, and in the nation as a whole, factory owners like her have seen their worlds turned upside down. And their struggle goes a long way toward explaining why this continues to be such a joyless recovery.
More than 11,000 jobs have disappeared in and around Rockford in the last three years, and many of those are not expected to return. Motorola shut down a big repair plant not far from Mrs. Pike's company last year, eliminating more than 1,000 jobs, even as it invested $1.9 billion in a new electronics factory in China. Textron is closing several factories that make metal fasteners. And industrial parks are swimming in "for sale" and "for lease" signs.
"We've been through downturns before, but this time it's different," said Malcolm Anderberg, owner of Dial Machine Inc., which does contract manufacturing. "This time, the work is leaving the country, and it's not coming back."
In part, this is an old story - and one not unique to Rockford. Manufacturers have been shedding jobs in the United States for decades, moving plants to low-wage countries or squeezing ever more production from fewer workers at home. But the process accelerated recently, with manufacturers trimming a whopping 2.8 million jobs over the last three years alone. A study published in August by the Federal Reserve Bank of New York concluded that more than half of those job losses stemmed from structural changes and were likely permanent.
History leaves little doubt that new jobs will eventually replace the old, and that workers' incomes can still rise. But the outlook for the short and medium term remains grim. This is the second "jobless recovery,'' the first having occurred after the slowdown in 1990 and 1991. Before then, factories in cyclical industries had tended to be the biggest source of employment gains once the economy began to revive. Now the bounce has to come from other areas. And this time, even those sectors have been less than gung-ho about hiring. ...
<http://www.nytimes.com/2004/01/04/business/yourmoney/04econ.html?pagewanted=all&position=>
Carl
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