Jobs and George Bush's Economy...
Your job: How scared should you be?
Perhaps plenty. New data shows employers are slowing down on hiring.
February 24, 2003: 5:26 AM EST
By Leslie Haggin Geary, CNN/Money Staff Writer
New York (CNN/Money) - The recovery in the job market isn't here yet.
That's the consensus of the most recent jobs survey by Manpower Inc., which found that employers nationwide are scaling back plans to add workers to their payrolls. The survey, released Monday, is the latest indicator that hiring has hit another roadblock.
That news will deal a blow to those who've lost jobs -- or those who worry they might join the ranks of the unemployed. Experts aren't mincing words. Their advice? Tighten your personal financial belt and be prepared for a bumpy ride ahead.
"We've been digging out of a recession from a labor perspective and now we've hit the second quarter of 2003 and companies are saying, 'I'm slowing down,' " said Manpower CEO and Chairman, Jeffrey A. Joerres. "The momentum they've been building has lost ground."
Employers scale back plans to hire
At first blush, the Manpower report offers a glimmer of an upturn: More employers plan to hire from April to June this year than the first quarter of the year -- or 22 percent versus 20 percent. Nine percent will lay off staff, down from 12 percent in the first quarter. And 63 percent of companies will hold staff levels steady, according to the survey.
But the first quarter of the year is always the slowest in terms of hiring, said Joerres. In other words, quarter-over-quarter hiring should be expected to rise between the second quarter and the first. The problem is that expectations are for such small gains.
A combination of factors may be to blame. Uncertainty over a war with Iraq doesn't help. But with little new demand for products and services, companies are generally holding staff levels steady, rather than increasing payrolls in expectation of rebounding performance.
In fact, as of March 2001, the official start of the recession, some 1.6 million jobs have been eliminated entirely. Today, national unemployment levels stand at 5.7 percent.
Unemployed for longer, many quit trying
Many who've received pink slips are still pounding the pavement for work. One in five individuals who are out of work - some 1.7 million job seekers - have been unemployed for more than six months.
"It's not getting better right now," agrees John Challenger, CEO of the outplacement firm Challenger, Gray & Christmas. "We've been thinking recovery is six months away for two years running now. But we may be in period of doldrums for a while."
A lingering cause of concern is the number of long-term unemployed, many of whom have simply given up and stopped looking for work.
"This isn't the highest level of long-term unemployment we've ever seen. In the early 1990's, there were lots of people out of work for a long time," said Ryan Helwig, economist at the Bureau of Labor Statistics. "But even with positive economic growth, we've seen a continued decline in payroll employment and an unemployment rate that hasn't begun to decline."
Regional recoveries
Certain industries and parts of the country are faring better than others, according to Manpower's survey.
Job seekers in the South have the greatest prospects to find work; 29 percent of industries there expect to hire while 7 percent expect layoffs. Conversely, employers in the Northeast - encompassing the Mid-Atlantic and New England states, as well as New York - show the weakest outlook. Some 11 percent will decrease staff levels in coming months while 21 percent hope to add workers.
Joerres says there are glimmers of hope. He points to the new hiring findings among makers of durable goods like heavy equipment, furniture, steel and computers. Nationally, 10 percent will hire in the second quarter, up from the 3 percent in 2001. That growth indicates that employment in the manufacturing sector, which has been heavily beaten down in the past two years, may be stabilizing after years of erosion
Experts are quick to note, however, that there's a big difference between stabilization and growth. In fact, companies who are replacing inventories of, say, computers or other durable goods are most likely replacing old equipment rather than gearing up for sustained growth.
Areas that have been doing well include health care, defense and security and real estate. Last week, the National Association of Home Builders reported that builders started to work on 1.85 million homes in January - a 16-year high.
Industries that continue to lag include telecommunications, technology and travel. Jobs in government also are losing ground. In fact, according to the Manpower study, hiring for government jobs will slip 2 percent from April through June.
That's the worst industry performance for the Manpower survey, but not surprising. While government workers are expected to retire in droves in coming years and there's been a demand for security workers, states and localities nationwide are grappling with stratospheric deficits. Some have watched their bond ratings get cut as a result of their fiscal woes. Others are trying to shore up pension plan funds and find money for Medicaid spending. And many are holding off on hiring.
Hedging against hard times
The best defense against uncertainty? Take steps to protect yourself by keeping adequate cash reserves and adjusting your investments to meet your risk tolerance and making sure you've got an ideal budget. (To create one, click here.)
Meanwhile, be leery of even good deals. Low interest rates have fueled home and car-buying sprees, but be sure you can afford them.
Warns Challenger: "Make sure you have money in the bank. This is the time to be cautious. Don't think the turn is right around the corner." |
