RECESSION AND THE NEW REALITY

Education, adaptability crucial for workers wanting to be successful in new economy

Getting a job and working till retirement is no longer the model for post-recession generation

By Bill Strother 331-4265 | bstrother@heraldt.com
May 2, 2012

Although the recession is finally easing, Hoosiers are not out of the woods.

That will require rethinking the relationship between worker and job — replacing an outdated formula with one that addresses the 21st century, according to IU economist Jerry Conover.

The problem is that the old work ethic is ingrained in the Hoosier psyche. “It’s a multi-generational thing,” Conover said, especially in cities with a high concentration of auto manufacturing plants. “People were pretty sure that once they got out of high school, they’d know somebody at the factory and get on there — and 40 years later, or even 30, retire with a good pension. … A vacation home someplace and a boat on the lake.”

HOUSING, UNEMPLOYMENT DATA: Chart average home sales in Monroe County and unemployment rates by any county in the country and more on our special recession project page

Today, many of those factories are vacant, with their production moved overseas in search of cheaper labor. And those manufacturers that remain need a different kind of worker. Today, the old way of doing things just doesn’t work so well.

“You don’t need as many people — and the people you need, they have to do more than just weld something — or just screw something on,” Conover said.

Increased worries

Bloomington and area counties have lost large manufacturing operations over the past two decades, including auto suppliers, a large electrical manufacturing plant, the Otis elevator plant and the Thomson television plant, which when it was RCA was the city’s biggest employer for a time. GE, one of the largest remaining manufacturers here, once employed more than 3,000 in high-paying manufacturing jobs. It now employs about 600.

And while most of such local cutbacks came before the recession, the past several years have continued to eat away at the U.S. manufacturing base, which has provided huge numbers of generally highly paid blue-collar jobs.

“I think the number of manufacturing jobs lost in this country (in the recession) is more than were lost in the Great Depression, in percentage terms,” Conover said.

Positives and negatives

Despite such losses, Bloomington and Monroe County, and to some extent adjacent counties that supply workers to employers here, are doing better than other areas of the country. Those places do not have the good fortune of being home to a major university that is the area’s largest employer. This area also is home to a growing biomedical industry, one that began in the 1960s with the genius of one man, Bill Cook, who parlayed a start in an apartment on East Second Street into an international medical device manufacturer that has meant billions for his adopted hometown.

But there also are nagging issues, as pointed out in last fall’s benchmark report by the Indiana Business Research Center at IU’s Kelley School of Business on the economic health of the city and county.

Commissioned by the Bloomington Economic Development Corp., the report pointed out that the average annual wage for all jobs in the county in 2009 was more than $4,000 below Indiana’s average, which is itself significantly lower than the national average. In fact, the county’s annual wage per job was about $11,500 lower than the U.S. average in 2009, and there is evidence that the gap is widening.

But the report, which compared Monroe County with 11 similar city/counties across the country, also had some good news. While the countyhas lost jobs since 2007, that loss has been less severe than for most of its peer group and for all of the Indiana cities that were part of the study. “We can make similar ‘it could be worse’ statements for unemployment rates, house prices and foreclosures. So while Bloomington did not dodge the recession, it has weathered it comparatively well,” the authors wrote in the report’s conclusion.

Education lags

Education is key to translating such a positive assessment into individual success, Conover said.

“It’s a very sharp and dramatic trend — those who have finished high school have a much higher rate (of employment) than those who have not.”

And as education attainment rises from high school to college to graduate school, that pattern persists.

“Education — formal or informal — is key to keeping a job and finding new jobs,” Conover said.

“Indiana is certainly below the national average in terms of education. We’re down in the bottom quartile of the states. … A lot of Hoosiers never expected to go to college,” he said, and as a result, the state and its workforce are being left behind.

IU professor Sabrina Sullenberger, whose research examines aspects of poverty, said that one effect of recession is that her own students now worry about being left behind, even with a college degree.

“Young adults now have their high school years and their college years informed by the recession,” she said. “They have an awareness of how the economy can change. … They ask different questions now.”

Adaptability key

Despite such doubts, education remains the key, according to John Whikehart, chancellor of Ivy Tech Bloomington.

His campus covers a six-county area, he said, and the tradition of moving on from high school to higher education is not so strong in some of those counties or among some groups of students. “Part of that is because we’ve had jobs in this area of the state that historically may not have required special education and training levels,” he said.

A high school graduate might instead have gone from graduation straight to work in the quarries or in a factory with no additional formal training.

“Those aren’t the times anymore and not the situation we face anymore,” Whikehart said.

He remembers that when he graduated from high school in 1965, he could have gone to work in his hometown of Kokomo immediately after high school at Continental Steel, which made nails and fencing, and then waited for a job to open up on the line at Chrysler or Delco.

The steel company closed forever in 1985 after 75 years in business, and Chrysler and Delco, now Delphi, have greatly reduced presences in Kokomo.

“What companies need today are individuals who are prepared to communicate well and to think critically,” he said. And adaptability is also necessary. “(The worker of the future) will probably make three career changes in their lifetime and may end up with seven jobs in those careers.

“Young people, students in school, just need to understand that it’s going to require more education and training than just completing high school,” Whikehart said. “We have to move past that. That’s absolutely critical.”

Sign of recovery

Last week, Columbus-based Cummins Inc. announced it will expand its Seymour high-horsepower engine plant, investing $219 million and hiring almost 300 workers to add to the more than 500 already employed there. Company officials said the expansion is possible because of the expanding global market for the engines produced in Seymour.

Stewart Moon | Herald-Times

Copyright: HeraldTimesOnline.com 2012