TIME: Almanac 1993/TIME Almanac 1993.iso/time/021191/0211202.000

Text File | 1992-10-19 | 6.2 KB | 138 lines

                                                                                BUSINESS, Page 66

Where Do They Go from Here?


Before it's over, the recession is likely to put as many as 2
million people out of work. And benefits are running low.

By JANICE CASTRO -- Reported by Gisela Bolte/Washington and
Deborah Fowler/Houston


    -- For her talent in teaching social studies, Cathy Nelson,
37, was named Minnesota's Teacher of the Year last October. But
she is not teaching anyone right now, because she lost her job
in a budget cutback.

    -- After 21 years with Quaker Oats, Mike Krause, 50, was
running the European operations of the company's Fisher-Price
toy subsidiary when Quaker decided to sell the business last
spring. Krause, one of 1,300 employees whose jobs were
eliminated, has been looking for work ever since.

    -- Tommy Darnell, 29, was a skilled sheet-metal cutter at
General Dynamics until he was laid off last month along with
3,500 other Fort Worth workers. Says he: "I guess I might have
to write off 10 years of experience."

    Since last August, more than 800,000 Americans, from
steelworkers and autoworkers to clerks and bankers, have lost
their jobs in the most serious burst of unemployment since the
1982 recession. During January alone, as business braced
against the harrowing uncertainties of a recession overlaid
with war, 232,000 people lost their jobs. The government
reported last week that January's jobless rate rose to 6.2%,
up from 6.1% the previous month and 5.3% in June. All told, 7.7
million Americans were unemployed in January. "The job loss last
month was immense," says Allen Sinai, chief economist for the
Boston Co. Economic Advisors. "The findings really blow out of
the sky any notion of a short and shallow recession."

    Among the hardest hit workers have been those in
manufacturing, where 454,000 jobs have been lost since last
August, and construction, which has declined by 362,000. In the
auto industry, 19 of the Big Three's 51 U.S. assembly plants
are temporarily closed. Altogether, 65,000 auto jobs have
disappeared. Almost the only part of the economy to escape the
pain of the recession is the health-care industry. During the
past year nearly 600,000 health-care jobs have been created,
bringing total industry employment to 8.4 million.

    If there is any good news, it is that the harshest phase of
the layoffs may be over. Companies have reacted to this
downturn more swiftly than usual with deep pre-emptive cuts.
Still, economists expect that as many as 1 million more
Americans may lose their jobs before the recession's effects
fade next fall -- and that forecast assumes that the war ends
within a few months. The Commerce Department reported a seeming
indicator of strength in the economy last week, announcing that
orders for durable goods climbed 4.4% during December. But only
limited segments of the economy benefited, since considerably
more than half the increase was attributable to orders for
military goods.

    Even if the recession is relatively brief, many workers will
be hard pressed to find jobs anytime soon. Well before the U.S.
slipped into recession last fall, business was downshifting in
the wake of the Reagan expansion. Corporations were eliminating
slices of middle management and the layers of clerical and
professional staff supporting them. Says Roland Stichweh, a
senior partner at the Towers, Perrin, Forster & Crosby
benefits-consulting firm: "Organizations under stress are
finding that they must abandon their traditional sense of
loyalty to these employees."

    At the same time, companies have been replacing many of the
stars who led them during the boom years with more conservative
managers. Says Paul Ray Jr., an executive recruiter: "Instead
of doing deals, now the emphasis is on cost control." On Wall
Street during the past two years, more than 60,000 jobs have
been lost as merger mania ended and the bull market stalled.
Largely as a result, big accounting and law firms that served
the merger makers have slashed their partnership rolls. Last
month the accounting firm Peat Marwick abruptly dismissed 300
of its 1,875 partners, protecting profits by chopping highly
compensated senior talent.

    While losing a job is always a wrenching experience, most
senior managers can count on reasonable severance as well as
personal savings to cushion the blow. But for legions of
workers whose prospects of finding a place in a shrinking job
market are bleak, the money is fast running out. More than 2.2
million people used up all six months' worth of unemployment
benefits last year, a 16% increase from a year earlier. Worse
still, a study released in December by Mathematica Policy
Research, a consulting firm, found that 60% of unemployed
workers were in the desperate position of still being jobless
10 weeks after their benefits expired.

    In several past recessions, Congress and the states
responded to widespread joblessness by allocating extra money
to unemployment trusts so they could extend worker benefits for
a few additional months. But during the past few years the
Federal Government and the states have tightened eligibility
for such benefits. Only Alaska and Rhode Island are currently
expanding the assistance. And with everything from the gulf war
to the savings and loan bailout competing for scarce federal
funds, Congress is not eager to press such a move. For the
moment, once they exhaust the standard benefits period, the
jobless are on their own.


_______________________________________________________________
OUT OF A JOB


                            Total               Net number
    Industry             employment           of jobs lost
  (nongovernment)       (Aug. 1990)        (Aug.-Jan. 1991)

    TOTAL U.S.           92,320,000*            793,000*

    Construction          5,194,000             362,000
    Manufacturing        19,084,000             454,000
    Autos                   814,000              65,000
    Electronics           1,689,000              47,000
    Real estate           1,352,000              13,000
    Retailing            19,846,000              78,000


* Seasonally adjusted.