Pushed by recession, millions make dramatic job changes

The automotive industry was the only life Ed Wozniak knew. As a teenager, he would take apart vintage cars, soup them up and put them back together in a weekend. His father was a machine repairman, and Wozniak got an apprenticeship doing similar work for Chrysler.

But in late 2007, after he took a buyout to avoid his second layoff in five years, the 17-year veteran had enough. At 35, he started classes at a Michigan university and is now an intensive care nurse earning about $55,000, far less than his former annual pay of $80,000.

"I thought it was always going to be a struggle from here on out, with people cutting back and foreign automakers coming in," says Wozniak, of Royal Oak, Mich. "It was time to move on."

Millions of Americans are making dramatic career turnabouts in this withering recession as a range of industries — including those involving cars, finance, real estate and construction — are shedding hundreds of thousands of jobs, many of which analysts say likely won't return for years, if ever. Meanwhile, fields such as health care, clean energy, computer science and the government are expected to grow robustly in coming years.

The reshuffling has workers in shrinking sectors racing to retool for spots in expanding fields. Transitions can be arduous, often forcing the unemployed to spend thousands of dollars to acquire new skills and take pay cuts in their new slots. And there's no guarantee of a job.

Such structural shifts in employment are common in economic downturns. Some industries cut positions permanently by becoming more efficient or less vibrant. That's what happened to railroads in the early 1980s downturn and communications in the slump of 2001.

A 2003 study by the Federal Reserve Bank of New York found permanent job losses rose sharply in the past two recessions compared with the previous four.

It blamed overexpansion during boom times, efficiency gains and the growing use of overseas and temporary workers. Study co-author and New York Fed economist Erica Groshen says permanent job cuts are likely even greater in the current slump because of widespread layoffs in sectors such as autos and finance.

Permanent losses

About 45% of the 6.5 million Americans who joined the jobless rolls in this downturn lost their positions permanently, according to the Labor Department. The rest included people on temporary layoffs and those who quit jobs. By contrast, people who lost jobs permanently made up about 35% of the unemployed in the 1990-91 and 2001 recessions.

The realignment is touching off a scramble that's turning auto industry veterans into clean-energy pioneers, Wall Street highfliers into math teachers and construction workers into aviation mechanics. According to a CareerBuilder survey this year, 71% of workers who were laid off and haven't found work said they're looking for jobs outside their fields.

The shift will keep the 9.5% jobless rate high for a longer period, perhaps over 6% even after an economic recovery, some economists say. Many workers will take years training for new jobs and then finding them. Still others lack the skills to reinvent themselves.

"There'll be a great skills mismatch that persists into the recovery," says Bruce Kasman, chief economist for JPMorgan Chase.

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