The Washington Times
www.washtimes.com
Tight job market frustrates millions
Patrice Hill
THE WASHINGTON TIMES
Published 10/30/2002
Nikki Sorrel, a recent browser on the Monster.com job bulletin
board, has been looking for work for so long that she's
given up until next year. Washingtonian Carol J.T. has nabbed only one
job interview since she lost her software analyst job
in January 2001.
They are not the only ones. The weak economic recovery this year
has produced barely more than 150,000 new jobs -
less than the average number created in one month during the 1990s
economic expansion. With more than 8 million people
looking for work, long-term joblessness has become a significant problem
for many.
While unskilled and less-educated laborers often took the brunt of
layoffs in past recessions, this time around
joblessness is disproportionately hitting workers with skills and
education, from recent college graduates and airline pilots
to technology workers caught in the dot-com bust, and executives
dismissed from disgraced and bankrupt corporations.
The unemployment rate has stayed at historically low levels, below
6 percent despite the recession, but labor analysts
say that's partly because many workers have grown discouraged and
dropped out. The length of time it takes to find a new
job is at its highest in eight years.
"The recovery so far has been close to jobless," said Nariman
Behravesh, chief economist with the forecasting group
DRI-WEFA. Though the recession may be over, he said, businesses continue
to trim workers and hold off hiring to cut costs
and restore profits.
This painful "restructuring and renewal" stage of the recovery,
like the one in the early 1990s, is likely to persist for
months. But eventually it will produce the healthy earnings gains needed
for businesses to start growing and hiring again, he
said.
A survey by Watson Wyatt Worldwide found that more than half of
corporations cut staff in the last year even as the
economy was recovering and that nearly half imposed hiring freezes and
kept a lid on raises. As a result, a measure of
help-wanted advertising published by the nonprofit Conference Board last
month fell to a 38-year low.
But recent job cuts are only a small part of the problem for the
unemployed. During the recession, nearly 2 million jobs
were lost, according to the Bureau of Labor Statistics, so the meager
net gain in jobs since May has offered little hope to
those looking for work.
Job openings have gradually started to crop up in some fields,
particularly service areas such as health care, teaching
and temporary employment.
The revival of prospects in devastated industries such as
technology and investment banking could take years, however,
because of the speculative growth that drove both to excesses during the
turn-of-the-century boom, Mr. Behravesh said.
The good news is that cost-cutting by businesses has produced
strong productivity gains that enable the 131 million
workers who still hold jobs to enjoy solid income growth. That, in turn,
fuels steady growth in consumer spending and
supports growth in the overall economy, he said.
But for now, the void of job opportunities is creating a growing
angst not only among the unemployed, but among people
who have jobs and feel stuck in place with little opportunity for
advancement.
"It's amazing how difficult the market has become," said an
unemployed worker on one of the popular Internet chat
rooms sponsored by Monster.com. Hailing from North Carolina and calling
himself just "That Guy," he was one of dozens
who poured out their frustrations recently
"I'm honestly ready to just give up," he said. "I'm not even trying
to move up career-wise. I'm willing to take a $20,000 cut
in salary, don't care about benefits, and am willing to switch
industries. Yet I'm having more difficulty than I ever had before."
"Carol J.T." said she's had no luck finding a job in the Washington
area, despite her solid technology skills. She said she
would accept any "legal, reliable means of producing income," including
part-time, contract or temporary work but has
gotten no offers.
"Yankee Gal" said she lost her job a year ago, ostensibly because
of the downturn caused by the September 11 attacks.
But now she thinks "cheap employers used 9/11 as an excuse to freeze
hiring and simply dump more work onto already
overtaxed employees."
In a chat room for technology workers, an aerospace employee from
Southern California with 19 years' experience said
he has been out of work since May and is finding that employers won't
give him a chance because he's overqualified for the
positions they have.
A tech worker from Washington state advised him to play down his
strong technical skills by devising a "low-tech"
resume that emphasizes broader job skills such as writing and
customer-service experience.
By switching to such a low-tech resume, the Pacific Northwest
worker said he was able to land a customer-service job at
a department store. "At least I'm working again after spending six
months at home waiting for the phone to ring," he said.
Several tech workers said they've seen software support and other
desirable jobs moved offshore to India, where
workers are paid one-fifth as much as American workers. Because of that,
several said they don't expect to see job or
income gains in their field for years to come.
John A. Challenger, president of Challenger, Gray & Christmas Inc.,
a Chicago outplacement firm, said workers are
experiencing "a sequel to the jobless recovery" that lasted 15 months
after the 1990-91 recession.
But the pain level may be even higher this time around for those
who were once highly paid in technical and
management jobs, he said. Nearly half of those out of work for at least
six months today are high-income professionals, a
record for that category, he said.
Some unemployed workers have been hurting themselves by continuing
to have unrealistically high salary expectations
nurtured during the "bubble years" of the 1990s, he said. Dot-com and
other tech professionals, in particular, may have to
take salary cuts of 20 percent to 30 percent, he said.
Another source of job losses has been the massive wave of
bankruptcies, mergers and corporate scandals in the last
year, which is having "the greatest impact on the ranks of middle
management and support staff," Mr. Challenger said.
"Unfortunately, in this job market these categories of workers will
have the toughest time finding a job."
Adding insult to injury, laid-off workers are receiving drastically
less generous severance payments than they did just
three years ago, reflecting the urgency of cost-cutting by businesses,
he said.
The average length of severance pay has plunged by more than half,
to 10 weeks from 21.8 weeks in 1999, he said. And
the drop in pay occurred just as the length of time it takes workers to
find new jobs climbed to an average 18 weeks.
Most laid-off workers are entitled to unemployment benefits that
last about eight months after their severance pay runs
out. More than 3 million workers are drawing extended unemployment
benefits. But about 2 million are expected to run out
of benefits by the end of the year.
Some workers are prolonging their unemployment by refusing to
relocate to where the jobs are, Mr. Challenger said. It's
understandable, he said, that they want to stay close to their friends,
family and professional contacts. The "nesting" urge
has grown strong since the September 11 terrorist attacks.
www.washtimes.com
Tight job market frustrates millions
Patrice Hill
THE WASHINGTON TIMES
Published 10/30/2002
Nikki Sorrel, a recent browser on the Monster.com job bulletin
board, has been looking for work for so long that she's
given up until next year. Washingtonian Carol J.T. has nabbed only one
job interview since she lost her software analyst job
in January 2001.
They are not the only ones. The weak economic recovery this year
has produced barely more than 150,000 new jobs -
less than the average number created in one month during the 1990s
economic expansion. With more than 8 million people
looking for work, long-term joblessness has become a significant problem
for many.
While unskilled and less-educated laborers often took the brunt of
layoffs in past recessions, this time around
joblessness is disproportionately hitting workers with skills and
education, from recent college graduates and airline pilots
to technology workers caught in the dot-com bust, and executives
dismissed from disgraced and bankrupt corporations.
The unemployment rate has stayed at historically low levels, below
6 percent despite the recession, but labor analysts
say that's partly because many workers have grown discouraged and
dropped out. The length of time it takes to find a new
job is at its highest in eight years.
"The recovery so far has been close to jobless," said Nariman
Behravesh, chief economist with the forecasting group
DRI-WEFA. Though the recession may be over, he said, businesses continue
to trim workers and hold off hiring to cut costs
and restore profits.
This painful "restructuring and renewal" stage of the recovery,
like the one in the early 1990s, is likely to persist for
months. But eventually it will produce the healthy earnings gains needed
for businesses to start growing and hiring again, he
said.
A survey by Watson Wyatt Worldwide found that more than half of
corporations cut staff in the last year even as the
economy was recovering and that nearly half imposed hiring freezes and
kept a lid on raises. As a result, a measure of
help-wanted advertising published by the nonprofit Conference Board last
month fell to a 38-year low.
But recent job cuts are only a small part of the problem for the
unemployed. During the recession, nearly 2 million jobs
were lost, according to the Bureau of Labor Statistics, so the meager
net gain in jobs since May has offered little hope to
those looking for work.
Job openings have gradually started to crop up in some fields,
particularly service areas such as health care, teaching
and temporary employment.
The revival of prospects in devastated industries such as
technology and investment banking could take years, however,
because of the speculative growth that drove both to excesses during the
turn-of-the-century boom, Mr. Behravesh said.
The good news is that cost-cutting by businesses has produced
strong productivity gains that enable the 131 million
workers who still hold jobs to enjoy solid income growth. That, in turn,
fuels steady growth in consumer spending and
supports growth in the overall economy, he said.
But for now, the void of job opportunities is creating a growing
angst not only among the unemployed, but among people
who have jobs and feel stuck in place with little opportunity for
advancement.
"It's amazing how difficult the market has become," said an
unemployed worker on one of the popular Internet chat
rooms sponsored by Monster.com. Hailing from North Carolina and calling
himself just "That Guy," he was one of dozens
who poured out their frustrations recently
"I'm honestly ready to just give up," he said. "I'm not even trying
to move up career-wise. I'm willing to take a $20,000 cut
in salary, don't care about benefits, and am willing to switch
industries. Yet I'm having more difficulty than I ever had before."
"Carol J.T." said she's had no luck finding a job in the Washington
area, despite her solid technology skills. She said she
would accept any "legal, reliable means of producing income," including
part-time, contract or temporary work but has
gotten no offers.
"Yankee Gal" said she lost her job a year ago, ostensibly because
of the downturn caused by the September 11 attacks.
But now she thinks "cheap employers used 9/11 as an excuse to freeze
hiring and simply dump more work onto already
overtaxed employees."
In a chat room for technology workers, an aerospace employee from
Southern California with 19 years' experience said
he has been out of work since May and is finding that employers won't
give him a chance because he's overqualified for the
positions they have.
A tech worker from Washington state advised him to play down his
strong technical skills by devising a "low-tech"
resume that emphasizes broader job skills such as writing and
customer-service experience.
By switching to such a low-tech resume, the Pacific Northwest
worker said he was able to land a customer-service job at
a department store. "At least I'm working again after spending six
months at home waiting for the phone to ring," he said.
Several tech workers said they've seen software support and other
desirable jobs moved offshore to India, where
workers are paid one-fifth as much as American workers. Because of that,
several said they don't expect to see job or
income gains in their field for years to come.
John A. Challenger, president of Challenger, Gray & Christmas Inc.,
a Chicago outplacement firm, said workers are
experiencing "a sequel to the jobless recovery" that lasted 15 months
after the 1990-91 recession.
But the pain level may be even higher this time around for those
who were once highly paid in technical and
management jobs, he said. Nearly half of those out of work for at least
six months today are high-income professionals, a
record for that category, he said.
Some unemployed workers have been hurting themselves by continuing
to have unrealistically high salary expectations
nurtured during the "bubble years" of the 1990s, he said. Dot-com and
other tech professionals, in particular, may have to
take salary cuts of 20 percent to 30 percent, he said.
Another source of job losses has been the massive wave of
bankruptcies, mergers and corporate scandals in the last
year, which is having "the greatest impact on the ranks of middle
management and support staff," Mr. Challenger said.
"Unfortunately, in this job market these categories of workers will
have the toughest time finding a job."
Adding insult to injury, laid-off workers are receiving drastically
less generous severance payments than they did just
three years ago, reflecting the urgency of cost-cutting by businesses,
he said.
The average length of severance pay has plunged by more than half,
to 10 weeks from 21.8 weeks in 1999, he said. And
the drop in pay occurred just as the length of time it takes workers to
find new jobs climbed to an average 18 weeks.
Most laid-off workers are entitled to unemployment benefits that
last about eight months after their severance pay runs
out. More than 3 million workers are drawing extended unemployment
benefits. But about 2 million are expected to run out
of benefits by the end of the year.
Some workers are prolonging their unemployment by refusing to
relocate to where the jobs are, Mr. Challenger said. It's
understandable, he said, that they want to stay close to their friends,
family and professional contacts. The "nesting" urge
has grown strong since the September 11 terrorist attacks.
