LITTLE ROCK — The Arkansas work force in August continued to shrink at a much faster rate than the nation’s, as state unemployment inched up to 7.5 percent.
There were 27,300, about 2 percent, fewer people in the Arkansas civilian labor force last month as compared with August 2009.
The U.S.labor force shrank by 0.2 percent during the same period.
A work force, consisting of those with jobs or seeking employment, often shrinks during economic downturns. Job-seekers get discouraged and quit looking for work or retire. Still others go back to school. A state’s labor pool can also get smaller if workers move away.
Economists in Arkansas are unsure why the state’s labor force is shrinking faster than the nation’s.
“The best explanation that we can give is we do have a contingent of discouraged workers who are showing up as dropping out of the labor force,” said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville, said a shrinking labor pool can portend good and bad things.
Record enrollment at the University of Arkansas and the state’s smaller laborpool are directly related, she said. Enrollment at the university at Fayetteville jumped by 1,557 students this fall, the biggest increase in 64 years and almost 8 percent higher than a year earlier, school officials said this month.
“That ... in the end will make us as a society richer and more productive,” Deck said. “What’s bad is the alternative narrative: We might have somebody who gets laid off at 52 and never works again. Those kind of folks leaving the labor force is not a good thing.”
Nationwide, the joblessness rate for people 55 and older more than doubled to 7.3 percent since the most recent recession began, The New York Times reported this week, adding that experts fear that such workers could be less self-sufficient in retirement than if they’d been able to continue work.
Kimberly Friedman, a spokesman for the work-force services department, said Arkansas doesn’t track the percentage of older unemployed workers.
Some people new to the labor pool are directly related, she said. Enrollment at the university at Fayetteville jumped by 1,557 students this fall, the biggest increase in 64 years and almost 8 percent higher than a year earlier, school officials said this month.
“That ... in the end will make us as a society richer and more productive,” Deck said. “What’s bad is the alternative narrative: We might have somebody who gets laid off at 52 and never works again. Those kind of folks leaving the labor force is not a good thing.”
Nationwide, the joblessness rate for people 55 and older more than doubled to 7.3 percent since the most recent recession began, The New York Times reported this week, adding that experts fear that such workers could be less self-sufficient in retirement than if they’d been able to continue work.
Kimberly Friedman, a spokesman for the work-force services department, said Arkansas doesn’t track the percentage of older unemployed workers.
Some people new to the labor pool also aren’t having an easy time finding work.
Chad Sievers, 28, of Conway, who graduated in May with a master’s degree in social work, hasn’t found a job in his field since beginning to look in Little Rock around February.
Sievers, who moved to Arkansas after his wife was hired at Arkansas Children’s
Hospital, wants to work at a nonprofit organization focusing on advocacy or policy issues. But many nonprofit organizations have cut positions since the recession began, and Sievers said he finds himself competing against candidates with Ph.Ds.
FARING BETTER
The state’s job market in many respects is faring better overall than in the rest of the country, economists say. Arkansas’ joblessness rate, which increased by onetenth of a percentage point in August as compared with July, remains more than 2 percentage points lower than the nation’s, which rose to 9.6 percent in August from 9.5 percent.
Arkansas has the nation’s 16th-lowest unemployment rate. Nevada reported the highest rate, at 14.4 percent, that state’s highest since comparable numbers began being reported in 1976. North Dakota had the lowest rate at 3.7 percent.
Although the job market nationwide has continued to be sluggish over the past year, the National Bureau of Economic Research on Monday said the nationwide recession is over, dating it from December 2007 to June 2009, the longest recession after World War II.
The increase in joblessness was Arkansas’ first since March.
Nonfarm payroll employment fell by 3,400 jobs in August compared with July.
Pakko said the August jobs report for Arkansas “indicates a slowdown in the pace in economic recovery, but I don’t see any reasons to believe it’s anything more than a temporary setback.”
Deck said she wasn’t surprised to see employment suffer last month.
August was “a month of great malaise, when folks were really worried again about double-dip recession,” Deck said.
Housing reports, she said, were hurt by the end of a federal tax credit of up to $8,000 for homebuyers. The nation also “saw a number of revisions downward” in reports of economic growth.
SECTOR CHANGES
Compared with August 2009, nonfarm jobs rose by 3,100 last month, and the unemployment rate was unchanged.
Five industry sectors have more jobs than a year ago, but jobs for six sectors fell.
Educational and healthcare services gained 4,600 jobs, with growth coming in the health care and social assistance.
Manufacturing jobs rose by 4,500 over the year, and construction jobs increased by 2,100.
Leisure and hospitality saw the biggest loss, down 3,100 jobs versus a year earlier.
Government jobs declined by 700 compared with August 2009 because of losses at the local level.
The mining and logging sector lost 800 jobs over the year, which Deck believes is because of fewer people being employed in work related to the Fayetteville Shale.
“During the early part of the downturn, mining and logging provided one of those few sectors that we could kind of count on to hold out,” Deck said.
“There were still jobs being added ... because of the Fayetteville Shale.”
However, lower naturalgas prices have meant that the shale is not being developed as quickly as it would have otherwise, she said.
The trade, transportation and utilities sector is down 1,900 jobs compared with a year earlier. Deck said consumers will have to start spending more before consistent job gains are seen in the sector, which includes retail trade.
Arkansas has lost 43,500 nonfarm payroll jobs since August 2007.
Front Section, Pages 1 on 09/22/2010