The News Is In -- Re-invent Yourself
by Paul McGoldrick
The nearly official news came a couple of days ago: It was news that many
of us have been muttering for some while, but now those who measure and
study confirm our dread fears -- the jobs lost during this last turn-down
in business are not coming back…
The news is nearly official because the Federal Government doesn't accept that the opinions expressed in "Has Structural Change Contributed to a Jobless Recovery" are necessarily those of the Federal Reserve Bank of New York for whom the authors work, in the Research and Market Analysis Group.
The report's timing coincided with the news from the Bureau of Labor that unemployment increased by 93,000 in August 2003, but the unemployment rate remained unchanged at 6.1%. The no change in the rate is attributable not to the fact that 93,000 is mathematically less than 0.05% of the total number of people in the workforce, but that a lot of people have just disappeared from the count: Either because they are no longer receiving unemployment insurance, or they have just given up on ever finding employment again.
In most previous recessions the recovery has been accompanied with re-hiring. That is not happening from this 2001 down-turn (which the report emphasizes is over, agreeing with the NBER [National Bureau of Economic Research] that the end of the recession was in November 2001) and it also indicates that jobs are still being lost in "communications, electronic equipment, and securities and commodities brokers." Curiously, even during the turn-down jobs were still increasing in nondepository financial institutions -- which includes mortgage brokers -- and are still being added.
While the GDP (gross domestic product) was, in June 2003, higher than before the turn-down started where have the jobs gone?
The report blames restructuring of organizations and it saw the trend -- but not as severely -- following the turn-down in 1991-1992. Both indicated that employers took the opportunity of making changes that dramatically (on this occasion) increased the productivity of the workers who were left. Presumably it is rather difficult not to accept extra tasks when your colleagues are shown the door, tomorrow it might be you, but the report also proves that the unemployed majority were permanently let go with no expectation of re-hiring. That is a major swing from previous down-turns where employers have even been known to help laid-off workers obtain their unemployment benefits, in the hope that they could ride out the situation without looking for another job.
One cause for the structural changes is given by the report as over-investments in some industries in the 1990s with competitive pressures finally forcing shrinkage through this recession. They also suggest management changes took advantage of the down-turn by incentivizing manager payrolls, JIT deliveries, and outsourcing.
Ah, yes, outsourcing. We sure know about that in the electronics industry, don't we! From design centers in places like India, to packaging and test in countries like Indonesia, Malaysia, etc, to fabrication and assembly in Taiwan and the Peoples' Republic of China. We can even bemoan the H-1B visas that we still see in abundance even though there are legions of unemployed engineers just dying to work. But one thing we have to accept is that this is a tide we cannot control.
After the 1990 - 1991 recession it was nearly two years before the real gains in employment started to happen. If the same story is true of this recession then we may not see any real job recovery until the very end of this year. But that doesn't mean that the new jobs will come from previously-expected sources, the ones that have restructured. In the period of March 2002 to April 2003, this report tells us, half-a-million people declared themselves as newly self-employed. Maybe some of them will succeed and need employees themselves, or maybe other factors will create employment opportunties if riskier investments come back in vogue. For the restructured companies any need for additional labor will be handled using contractors, easily disposable if things get tough again.
But if you are in the market for a job you also need to be realistic. Even the employers who are hiring (and in our field I know of at least one that didn't stop hiring design engineers through the complete period) are not paying relocation; heck they're not even looking at resumes that suggest relocation might be needed. They're not hiring the very experienced -- they're too expensive except in very special cases -- and they're not hiring the unexperienced. But is there any way that you can re-invent yourself?
A lot of people have, and the majority of those that I have seen -- me
included -- are actually happier for it. Financially there might be less
coming in when you look at yourself from a different perspective; You might
just find something there that is more valuable than previous employers
ever saw. Re-invent or not, the report from the Federal Reserve Bank of
New York may not be officially sanctioned, but we really know it is fact.