`Jobless recovery' is permanent; may kill rebound

"All of the services, nationwide, are going to India now."

Theresa Ruf, a medical transcriptionist

Theresa Ruf is facing a career change. A medical transcriptionist for years, she has seen the Oregon job she loved go to India, making her two-year, US$8,000 college degree suddenly useless.

"Even if I get another job tomorrow, I'm going to have to leave the medical transcription field because there's no guarantee a job will last ... All of the services, nationwide, are going to India now," the 35-year-old said.

"I wasted my education for nothing."

Ruf, married and planning a family, wept when she learned she was just one of 93,000 Americans laid off last month. The steep drop in payrolls last month brought the number of jobs lost since the 2001 recession's end to 1.1 million -- the worst "jobless recovery" on record.

And more and more white-collar work flowing overseas, experts worry it may be tough to retrain workers quickly enough to avoid derailing an economic recovery that has only now begun to gain steam.

A recent study by the Federal Reserve Bank of New York found job cutbacks in many industries are permanent, and warned that the time it takes for job-seekers to switch careers and obtain new skills may stifle a rebound in the labor market.

"The task of finding such jobs, difficult and time-consuming under the best of conditions, is likely to be even more complicated now, when financial market weakness and economic uncertainty prevail," the report said.

Forrester Research predicted last year that companies would move 3.3 million service jobs out of the country by 2015.

A career healthcare worker, Ruf is ashamed to admit that until she was told transcription could be done for US$0.02 a line in India -- compared to US$0.12 in America -- she had no idea so many white-collar jobs were being sent overseas.

"When I went to school they said jobs were guaranteed -- `They're always going to need medical transcriptionists' ... I was kind of ignorant," she said.

While service sector absorbed many factory workers whose jobs began going abroad in the 1970s, there is no such white-knight industry on the horizon to rescue highly-educated, white-collar workers who now fatten unemployment rolls.

US George W. Bush, whose re-election bid next year could be spoiled by rising unemployment and the export of jobs, has said jobs growth should resume later this year.

President Bush is not alone in his optimism. Numerous signs suggest the economy is finally growing strongly, and many analysts believe it is only a matter of time before employers begin re-hiring -- even, perhaps, those workers whose jobs were sent overseas.

"We won't know whether the jobs are coming back until we see a sustained period of stronger growth," said Peter Kretzmer, senior economist at Banc of America Securities.

"And my view is that while this trend is somewhat worrisome, let's wait a few months at least and watch," he said.

"Given the strong growth that we're seeing this quarter -- probably about 4.5 percent annualized ... we think that job growth will get underway," Kretzmer said.

But for the unemployed, the picture remains bleak.

Ruf had just one job interview in the two weeks since being laid off, despite 15 years' experience in health care and myriad technical skills.

She cannot imagine going back to school to train for a new career.

"A degree in another field isn't necessarily going to guarantee me anything either, so I don't want to take that kind of chance again," Ruf said.