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US task: Put jobless into jobs

With biggest job losses since 1974, Obama plans massive public works.

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Still, many workers may find they have to change professions or locations to find work. "One thing we have learned is that you need a lot of flexibility and capacity to move around geographically and occupationally," says Don Grimes, senior research specialist at the Institute for Research on Labor, Employment, and the Economy at the University of Michigan at Ann Arbor.

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In addition, says Mr. Grimes, citing the experience of past recessions, most people who find new employment will take a pay cut. "That is almost universally true," he says.

In past recessions, certain industries, such as the steel industry, have been decimated. "Tens of thousands of them ended up retiring," he says. "Some ended up working at Home Depots or Wal-Marts and ended up with a lower quality of life than they were expecting."

For the most part, Grimes says, job-retraining programs have also not worked. "I know some [programs] were running in Michigan for laid-off auto workers," he says. "But as soon as the auto industry turned around, they went back to their jobs, short-circuiting their training."

Some jobs may be lost permanently, says economist David Wyss of Standard & Poor's in New York. For example, some jobs in finance and real estate may not return. "There are probably too many real estate brokers," he says. "They are reemployable and can usually get a new job once they get the training."

Finding new jobs for people involved in retail and some parts of the service sector could be more difficult, Mr. Wyss says. "People are not buying goods, and those that are go to Wal-Mart, who hires fewer employees."

Sometimes in the past, small businesses have absorbed workers. But those jobs, too, are disappearing, says Richard DeKaser, chief economist at National City, a Cleveland bank, which surveys Midwest business. "We're finding small business has trimmed its hiring plans," he says.

Some areas that are still hiring may not help those being laid off. This includes healthcare. Even in November, the Department of Labor reports that this sector added 34,000 jobs. "It's pretty recession-proof, especially for doctors and nurses," says Wyss.

For others, it may just be a matter of time for the economy to begin to respond to stimulus, says Sung Won Sohn, an economics professor at the Smith School of Business, California State University.

"There is no short-term fix," says Mr. Sohn. "The fastest thing you can do is ask people to show up for work, and the government will find make-work projects like cleaning streets or building houses and bridges."