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Job seekers still waiting for the hiring to start

The recession may have ended more than a year ago, but the hiring has yet to begin in the Buffalo Niagara region.

While the local job market has started to stabilize, that means only that the firings and layoffs that have been the rule for the last two years have started to abate.

Decline is turning into stability, but local economists predict that it will be months before that trend transitions into a growth mode. Even then, the big question that economists can't answer is how strong that wave of hiring will be once the tide turns.

"The economy is in a rebuilding phase now," said John Slenker, the state Labor Department's regional economist in Buffalo. "It seems like we're trying to climb out of it."

But it's an uneven climb. The region has added jobs in five of the last eight months after snapping a 17-month skid of consecutive job losses. But the job growth has been tepid even during the good months, averaging only two-tenths to three-tenths of a percent.

One reason why the Buffalo Niagara region still isn't adding jobs is that its factory and financial services sectors continue to struggle, said Alan Berube, a senior fellow at the Brookings Institution.

The region has lost nearly one of every five remaining factory jobs since the recession started in October 2007, and the decline is continuing unabated. The financial services sector has lost 7 percent of its jobs during that same period, and while the pace of the losses has slowed to a crawl, the downward trend has not been reversed.

For jobless workers, that means the hunt to find new employment is taking far longer than usual. James Parrott, the chief economist and deputy director at the Fiscal Policy Institute, said the 22 weeks that a typical unemployed person will be out of work is twice that of the previous recession a decade ago.

That longer period of joblessness facing the average worker shows the severity of the current downturn and the sluggish nature of the job market.

"It's not a very bright economic outlook," Parrott said.

Still, Jaison Abel, a Buffalo-based economist for the Federal Reserve Bank of New York, said the region's job losses during the current downturn have been much less severe than they have been nationally.

One reason for that could be the local housing market, which has remained fairly stable throughout the downturn, after missing out on the big price spikes nationally leading up to the recession.

The local unemployment rate, which stood at 8.2 percent in December, is down slightly from the more than 20-year high of 8.3 percent in December 2009. It is a little worse than the statewide jobless rate of 8 percent and far better than the seasonally unadjusted national rate of 9.1 percent. Private-sector employment has grown for seven straight months, while government jobs continue to disappear.

One reason for the tight local job market is that existing workers are leaving the work force at a far slower pace than the region is producing graduates from local high schools and colleges, said Kathryn Foster, director of the UB Regional Institute.

Together, the region produces more than 30,000 high school and college graduates each year, but only about 10,000 workers retire annually. With job growth sluggish, that leaves a yawning gap that forces many of those graduates to look for work elsewhere and contributes to the region's brain drain, Foster said.

That likely will change dramatically 10 years from now, when the baby boomers begin to retire en masse. Foster estimates that, by 2020, about 20,000 local workers will be retiring each year, with the bulk of them coming from jobs in manufacturer, health services and education.

"If you're going to keep that educated group, the knowledge-based sector must grow," she said.

While the region has lost nearly one of every four factory jobs since 2001, several of its service sectors have been growing. Health services and employment at professional and business services firms have grown at a double-digit pace since 2001, while the leisure and hospitality, education and financial services sectors also have expanded.

Together, those five sectors account for nine of every 10 jobs that the Buffalo Niagara economy has created since 2001, Foster said.

The soft job market also has made a big impact on local wages. In 2009, the average job in Buffalo Niagara paid $39,225, up only a fraction from $39,018 in 2008 and $38,230 in 2007, when wages grew by 3.2 percent, according to state Labor Department data.

The key to finding a job today is perseverance, Slenker said. Companies continue to hire to replace retiring or departing workers, although they may do it more slowly in an attempt to save money in the interim.

"Keep looking. There are jobs out there," Slenker said.

Roughly 95 percent of the hiring is for replacement workers, and the competition for those vacancies is stiff. With competition for job openings so intense, it's essential that workers make sure their skills are up to snuff for the positions that are available today, Slenker said.

Improve your computer skills, upgrade your professional certifications, take college courses or get a GED if you don't have a high school diploma, he suggests.

State job projections, however, don't offer a cheery outlook in the years to come, with the greatest number of job openings forecast to come in generally low-wage occupations, from cashiers and waiters to customer service representatives.