Hiring at McDonald’s; Wireless Networks’ Job-Killing Effect; One Machine Doing The Work of Three
By Justin Lahart and James R. Hagerty
Wall Street Journal, July 12, 2011
There are many reasons U.S. companies give for their lack of robust hiring—from weak consumer spending to uncertainty over the direction of government policies on debt and spending.
But a closer look at hiring provides a more nuanced picture. Some industries have significantly boosted employment over the past year while others continue to shed workers. To be sure, even those adding jobs are hiring far fewer than would be needed to put America’s 14.1 million unemployed back to work.
Private-industry employment remains a mixed picture across key industries.
The economic recovery began in June 2009, but many sectors of the economy have continued to shed jobs. See which sectors have lost of gained the most jobs cumulatively since the recovery started.
Manufacturing has been adding jobs since the start of 2010 due in large part to the sharp rebound in automobile production at General Motors Co., Ford Motor Co. and Chrysler LLC that has filtered to suppliers. On the flip side, just about anything to do with housing, from furniture makers to hardware stores, remains depressed. Homebuilder Toll Brothers Inc., of Horsham, Pa., plans to bring its total employment to 3,300 by Oct. 31. But that is less than half of its peak of about 7,000 in 2005.
“It’s very incremental and deliberate re-hiring,” said Jon Downs, senior vice president of human resources for Toll. “We aren’t in a wholesale hiring mode.”
Over the past year, private employers have added 1.7 million jobs, but the net result of 659,000 cuts in government jobs—about a half of them temporary Census workers—mean total U.S. payrolls were up by only 1 million in that span. That leaves the country with 7 million fewer jobs than when the recession started in late 2007.
Here’s what it looks like on the ground in some industries that are among the biggest job gainers and losers over the past year:
Restaurants and bars
More than 9.3 million Americans work in restaurants, about one in every 10 employed, and the industry has been one of the few bright spots in an otherwise bleak hiring environment. Food service has added nearly 216,000 jobs since December 2009, when the industry’s employment bottomed out in the recession. The 2.1% job growth that restaurants have experienced in the year ending June from a year ago is more than twice the nation’s 0.9% job growth rate.
Bloomberg NewsRestaurants, tech and metal fabrication are hiring standouts. Above, applying for work in Chicago on Friday.
Of course, restaurants continue to hire even as the overall economy remains dismal because the work tends to be low-paying, either minimum wage and part-time, or both. Consider McDonald’s Corp. The burger giant hired more than 62,000 people on a national hiring day in April. “McDonald’s and its franchisees continue to receive applications and hire thousands of people every day, whether for short-term work experience or a life-long career,” said Danitra Barnett, Vice President of Human Resources for McDonald’s USA.
The job growth is expected to continue: Industry estimates suggest the sector will add 1.3 million jobs in the next decade.
Companies that cut and shape metal for cars, airplanes and other products generally have had a rebound in jobs and orders over the past year. Robert Akers, chief operating officer of the National Tooling and Machining Association, said orders have been particularly good from aerospace and medical equipment makers. Employment is up 77,800, or six percent compared to a year ago, according to the Labor Department. Some metal-fabrication companies also are scrambling to replace baby boomers who retired during the recession. In a recent survey of association members, about 45% said their order backlogs had increased since this year’s first quarter, while 20% were down.
Growing investments by oil, gas and other energy-producing companies have fueled orders at General Carbide Corp., a maker of tungsten carbide parts and tooling in Greensburg, Pa.
Mona Pappafava-Ray, president of the family-owned company, said her work force is up by about 60 people, or 40%, since 2009. But Ms. Pappafava-Ray has noticed a slowing in orders recently-she isn’t sure whether it’s just a summer lull or a real drop in demand. “At some point there is going to be a pullback.”
—James R. Hagerty
Corporate investment in new technology have produced decent job growth in key areas of the tech sector over the past year. Jobs in computer systems design, which includes professionals who design, install and program computer systems, rose by about 70,000 between June 2010 and June 2011.
In June alone, the category added almost 6,000 professional jobs, one of the largest increases of any area.
Accenture PLC, which puts together computer systems for global corporations, said it is on track to hire some 5,000 people in the U.S. this year out of 66,000 global hires.
“We are anticipating and planning for similar results next year,” said John Campagnino, head of global recruiting for Accenture, whose fiscal year ends Aug. 31.
Many startups are on a hiring tear as they receive large infusions of venture capital in the latest tech boom. Foursquare, which raised $50 million in June and makes a wireless application for smartphones, said it would add 25 employees this year to its 75, mostly software engineers.
—Spencer E. Ante
The U.S. has bled telecom jobs as cell phones have transformed the way people communicate. Americans are relying less and less on the hard-to-maintain copper lines that link homes to the national telephone network, and more on mobile phones and fiber-optic connections, which are easier to keep running.
Telecommunications employed 869,900 people in June, 28,400 fewer than a year before and about 560,000 fewer people than a decade ago, according to the Labor Department. At Verizon Communications Inc., for example, 11,900 wire line employees took buyouts in 2010—a year when its number of wired access lines dwindled to 26 million, compared to 31 million at the end of 2008.
“There’s going to be, hopefully a stabilization period where we’re now back to a stable employment base that we can continue to grow,” said Marc Reed, Verizon’s executive vice president for human resources. “But at this point in time, there is a disconnect between the legacy of where we’ve been over many, many years versus the competitive realities of the marketplace.”
Printing jobs have continued to dwindle, off 4.5% from a year ago, in part because digital competition has reduced demand for newspapers, magazines and books, said Ron Davis, chief economist for Printing Industries of America, a trade group based in Pittsburgh. The business of printing labels, wrappers and packaging remains strong, he said, and direct-marketing, catalog and brochure work has been resilient.
But the printing companies that have survived tend to be very efficient and need fewer workers
“Business is better but it’s not back where it was,” said Ralph Moore, owner of Commercial Printing Co. in Raleigh, N.C., which prints office stationery, newsletters, booklets and other items. He has kept his staff level at 22 and figures he could expand his output as much as about 25% without new workers. Using digital printers, the company now can do some jobs with one person that used to require two or three. Mr. Moore invested about $150,000 earlier this year to install a faster digital printer.
—James R. Hagerty
In building construction, slight job gains in commercial and industrial construction are being swamped by losses in residential, where foreclosures, tight credit and depressed prices have taken a toll. In June, residential and commercial building companies employed 1.2 million workers, down 15,900, or 1.3% from a year earlier, according to the Labor Department.
“We’re down about as skinny as we can get and are focusing all of our efforts on increasing sales and completing construction for the buyers that are out there,” said Brent Anderson, vice president investor relations at residential home builder Meritage Homes. “It is tough to add people when our sales aren’t increasing,” he said. Meritage expects to build between 3,500 and 4,000 homes this year, down from a peak of 10,000 homes in 2006.
Source: Wall Street Journal