If you’re a recently-sent-on-gardening-leave financial professional bemoaning your fate – take heart. Yours is not the only sector in turmoil.
Michael Mandel at BusinessWeek’s “Economics Unbound” blog points out that engineers, networking/IT/software workers and ‘creative’ types are also feeling pretty terrible right now.
Citing data from the US Bureau of Labor Statistics, Mandel notes “the stretch since Lehman went bankrupt has been absolutely horrible for most professionals,” with the exception of education and health care, “and perhaps legal”.
He says:
Since Lehman went bankrupt, there’s been a complete labor market collapse for many professional occupations. Over the last year, professional employment is down -0.7% (the average of the three months ending April 2009 compared to the average of the three months ending April 2008).
That’s bad enough, but that number is boosted by growing employment in education and healthcare occupations. Other professions are disaster areas.
The devil is in the (depression-inducing for those affected) details: engineering occupations registered a 10 per cent decline in eight months; in computer and mathematical employment, that number was more than 9 per cent over the same period.
For ‘creatives’ – designers, actors, reporters (gulp), athletes and similar – the decline was almost 12 per cent, Mandel says.
Why is this significant, beyond the obvious knock-on effects of rising unemployment? For Mandel, the key is that all of these groups are producers of what he calls “intangible investments”:
That is, engineers, scientists, computer software engineers, artists, designers, and so forth all create long-lived intellectual property which has the potential to contribute to the economy. This includes new software programs, new products, new pieces of art and so forth. Writers produce written works of various degrees of usefulness, but in the aggregate are beneficial.
With the exception of software, the government statistics for GDP pick up very little of these intangible investments. That is, they pick up the part of spending which supports current consumption, but not the part which benefits the future.
Mandel’s post is worth reading in full, not least because of the abundant chart porn.
The Economist, via the Free Exchange blog, also weighs in the subject:
It is certainly a bad time to be a “creative” professional, but the decline among engineers and computer professionals (9.3%) is even more troubling. These are the traditional innovators that propel growth.
Still, the Free Exchange bloggers see some green shoots in the gloom:
Perhaps a weak job market will encourage more entrepreneurial activity. The American labour market currently has lots of under-used talent. If professionals can use their skills flexibly and creatively, that may pave the way for recovery
Related links:
All roads lead to the Valley – FT
Mapping the unemployment crisis, US edition – FT Alphaville
Tech recruiting clashes with immigration rules – NY Times
A hiring bind for foreigners and banks – NY Times