Missouri Job Market Heals Slowly From Recession

Missouri has yet to reach its pre-recession employment levels, missing that number for 65 straight months and counting.

The state had 105,300 fewer jobs in May than at the beginning of the recession, according to a database provided by the Economic Policy Institute. The database findings reflected the nation’s struggles to heal the economy. Although state and national economic experts analyzed the Missouri’s numbers differently, they agreed that the state’s job growth has been disappointing, caused by big drops in certain key sectors.

Missouri suffers “jobs deficit,” weak post-recession growth

Missouri continues to suffer from a “job deficit,” or the the difference between the current number of jobs in Missouri and the number it needs to recover to its pre-recession unemployment rate, according to the Economic Policy Institute, a Washington, D.C. think tank.

Doug Hall | Photo courtesy of the Economic Policy Institute
Doug Hall | Photo courtesy of the Economic Policy Institute

To erase the deficit, Missouri would need to gain about 216,000 jobs over the next three years to both recover jobs lost during the recession and to keep up with the state’s population growth, EPI projected.

“Missouri hasn’t shown particular strength in terms of employment growth,” Doug Hall, director of EPI’s Economic Analysis and Research Network, said. “There’s not a whole lot of positives going on there.”

Missouri’s job growth demonstrated the weakness of its economic recovery compared to six other Midwestern states, including North Dakota, South Dakota, Nebraska, Minnesota, Iowa and Kansas.

The employment number in Missouri has been the lowest in the region since October 2009, according to EPI’s dataset. During that time, its pace of job growth lagged behind the other six states. The other states seemed to show upward trends starting in early 2010 while Missouri stayed relatively flat in employment growth, Hall said.

It is notable that the six states included in the dataset comparisons happened to be states that weren’t hit as hard by the recession, according to Peter Mueser, professor of economics at the University of Missouri. Most of the states have been boosted by strong energy or agriculture industries.

Construction, manufacturing shed most jobs 

Photo courtesy of Creative Commons
Photo courtesy of Creative Commons

The construction sector in Missouri was hit hardest by the recession, losing about 25.5 percent of jobs compared to the beginning of the recession, according to EPI’s dataset.

Missouri’s loss in construction since December 2007 was larger than the U.S. figure by 3 percent, but the construction sector in Missouri fared better in the short term compared to the rest of the nation. The state gained 3.7 percent construction jobs in May year over year, whereas the rest of the U.S. gained 3.4 percent.

Similar differences between Missouri and the U.S. appeared in manufacturing. The sector suffered the second-biggest employment decrease for both the state and the U.S. since the beginning of the recession. Missouri lost 47,000 jobs, or about 16 percent, in manufacturing compared to December 2007.

“Historically, Missouri had a relatively high proportion in the automobile industry,” Mueser said. “In 2008, some of the major companies, including Chrysler, had dramatic layoffs in the state.”

Missouri ranked No. 1 in terms of over-the-year decrease in average weekly initial claims due to mass layoffs, according to a June 21 Bureau of Labor Statistics news release. Initial claims represent  the number of individuals who file notice of unemployment to request eligibility for compensation, or for a subsequent period of unemployment.

Missouri’s ranking was a good sign, Mueser said. He attributed it to factors in certain industries and the weather.

“Manufacturing, automobile and aerospace industries are doing relatively well,” Mueser said. “Construction could be delayed by the snowstorms in March and the cold spring, so growth in April and May could be making up for that.”

Because Missouri saw a spike in initial claims and mass layoffs in May 2012, the weekly numbers this year might not be representative for understanding what’s going on in the Missouri economy, Hall pointed out. BLS data shows that since early 2011 the 12-month average for mass layoffs has remained fairly steady.

State sees shift in types of employment

The data also indicated that Missouri is moving away from the old industry structure, which was characterized by bigger proportions of manufacturing and construction, Mueser said. Companies in the old structure tend to be slow in rehiring after a recession.

“Technological changes happening in these industries made firms more efficient,” Mueser said, “but the changes required less labor so this is harder for workers.”

On the other hand, the education and health sectors gained back 7.4 percent jobs since December 2007 in Missouri while the U.S. added 11.3 percent. The employment growth in the state year over year was 1.4 percent, or 0.4 percent less than the rest of the country.

Missouri saw a 0.4 percent drop in employment in the education and health sectors compared to April, which may have been partly caused by cutbacks in federal support for state Medicaid programs, Mueser said.

In general, Missouri’s recovery pace from the recent economic recession reflected the national trends though it bounced up and down. “This is one of the slowest recoveries in the post-war era,” Mueser said. “The ongoing hope in the past three years was for faster recovery, but it has not happened.”

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