TOPICS > Economy

Realities of the Recession and the Changing Workforce

September 7, 2009 at 12:00 AM EST
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Paul Solman looks at the faces and places that illustrate the realities of the recession and Jeffrey Brown talks to experts about its impact on jobs.
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GWEN IFILL: That follows our Labor Day look at the bleak job market and the prospects for improvement.

Economics correspondent Paul Solman begins with this report.

PAUL SOLMAN: Almost 15 million Americans are out of work, five million of them for half-a-year or more, the average workweek at 33 hours, unchanged since April and lower than any time since the data started in 1964.

Since last fall, we have been looking at the numbers, faces and themes of the great recession, such as the jobless testing the limits of unemployment insurance.

How long have you been out of work?

JEFF GOLDSTEIN, advertising copywriter: It’s been about a year now.

PAUL SOLMAN: How long you have been out of work?

MAN: Two years.

PAUL SOLMAN: Two years?

MAUREEN LOCKWOOD, clerical worker: I’m out over a year now. Mine ends in September.

PAUL SOLMAN: The unemployment, you mean?

MAUREEN LOCKWOOD: Yes. Yes.

PAUL SOLMAN: Men have been hit harder than women, African-Americans and Hispanics harder than whites.

Black unemployment has been in the double digits for more than a year. For men over 20, it was back up last month to 17 percent. For those 16 to 19, more than one in three are still out of work.

We saw the problem in struggling and isolated East Saint Louis in the spring.

MAN: It’s about who you know. If you don’t know nobody, you’re not getting in there.

MAN: If I could get minimum wage, I would be happy. But there aren’t any jobs for a 63-year-old man, not in this are, that I can get.

PAUL SOLMAN: Since the recession began, some two million jobs have been shed in the manufacturing sector alone. In Elkhart, Indiana, due to stalled R.V. sales, whole families were unemployed…

WOMAN: I have been out of work for a little over a year.

PAUL SOLMAN: … or are woefully underemployed.

WOMAN: When it gets bad, I’m maybe down to five hours a week.

WOMAN: So, I got lucky and got a part-time job working with Lewis Bakery stocking bread. That’s a good thing. At least people still need to buy bread. So…

MAN: I went through a stretch where, from Thanksgiving to February, I didn’t work at all. And — and it looks now that we will probably be getting more — more time off in the future.

PAUL SOLMAN: Lucinda Gott had a job when we arranged this interview. But, by the time we set up our camera, she had lost it.

WOMAN: And Thursday was my last day.

PAUL SOLMAN: Her husband says his faith keeps him going, though he lost his job in April.

Looking?

MAN: Yes.

PAUL SOLMAN: Finding anything?

MAN: No, there’s nothing around here. There’s no jobs.

MAN: They have got a dollar store right down the road here pays $6.50 an hour. They’re not even hiring. So, there’s nothing out there at all.

PAUL SOLMAN: Since our interview, Ed Newfield did get hired as spokesperson for a green energy company that’s come to Elkhart in hopes of reviving the town. But, in August, another 63,000 factory workers lost their jobs.

The blue-collared haven’t been the only folks hammered, of course.

MAN: I’m going to have to get back to some hard — hard networking.

PAUL SOLMAN: Here’s a group of unemployed executives in suburban Chicago this summer.

MAN: I’m Chris Damao. I have been out of work since December of 2008. And I’m a senior financial executive.

MAN: My name is John Freck. I’m a senior audit executive from the banking industry. I have been in transition since January of this year.

MAN: My name is Barat Tolapa. I’m an I.T. infrastructure professional. And I have been looking since January of this year.

WOMAN: My name is Barbara Tomzhak. I’m a human resource leader. I have been in transition since February 2008.

Some jobs might not be recovered

Peter Cappelli
Wharton School
After the '80s, the layoffs are permanent. You lose your job, no expectation of being called back.

PAUL SOLMAN: Over 1.5 million jobs have been shed in professional and business services since the start of the recession, another 22,000 in August.

Historically, those jobs invariably returned with growth, but not anymore, the Wharton School's Peter Cappelli told us.

PETER CAPPELLI: A generation ago, when people got laid off, the assumption was all layoffs were temporary. The U.S. government didn't even bother tracking permanent job loss until the mid-'80s, because the assumption was, you would be recalled as soon as business comes back. After the '80s, the layoffs are permanent. You lose your job, no expectation of being called back.

PAUL SOLMAN: And more so than ever these days. No wonder productivity soared in the second quarter of the year, fewer workers, more output, higher productivity.

And fueling that process may be the more than nine million Americans now working part-time not even included in the official unemployment numbers, people like John Lapatta and John Freck.

MAN: I worked with the U.S. Census from March until May. And I typically averaged about 30 to 35 hours a week in that period of time.

PAUL SOLMAN: Were you looking for full-time work at that point?

MAN: I was still looking for full-time work.

PAUL SOLMAN: And what about you, John?

MAN: I was able to secure an adjunct teaching professor opportunity. I'm averaging about 15 hours a week with that assignment and looking for full-time work at the same time.

PAUL SOLMAN: Barbara Tomzhak has freelanced since losing her job.

WOMAN: I'm an independent contract worker.

PAUL SOLMAN: In a related trend, not only are workers working harder, but many who did hang on to full-time jobs agreed to cuts in pay, benefits and hours, in order to share the pain and thus avoid mass layoffs, like the workers at instrument maker Conn-Selmer.

CEO John Stoner:

JOHN STONER, CEO, Conn-Selmer: We felt pretty comfortable that the -- with everything else going on in the Elkhart community, knowing people and neighbors are losing jobs, that they would say, I would rather have a job even four days a week than not having a job.

PAUL SOLMAN: With layoffs and a wage freeze for higher-paid salaried workers, some 25 jobs have been saved in a factory of 125 line workers, one of whom is Ryan Poursilias, fiddling here with a flugelhorn.

MAN: This way, more people get to work. You know, I'm not a selfish guy. I don't mind giving up a little for the greater good, the whole, you know?

PAUL SOLMAN: Stephanie Artley agreed.

WOMAN: Well, it's kind of like who gets in the lifeboat, who doesn't get in the lifeboat. So, I think it's all better if we all get an oar and just kind of paddle along to keep each other afloat.

PAUL SOLMAN: Even amid signs the storm may be over, American workers still seem to be up the creek, with unemployment rising to 9.7 percent last month. The job loss was less than predicted, but try telling that to the 216,000 people who lost their jobs in August.

GWEN IFILL: Now Jeffrey Brown discusses some of the big changes that are happening in the American workplace and the consequences.

JEFFREY BROWN: And, for that, I'm joined by Katherine Newman, a sociologist at Princeton University. She's the author of several books on the work force, including "Chutes and Ladders," Jeff Joerres, CEO of Manpower, a staffing firm that works with businesses around the country, Tia Edwards, deputy executive director of Louisiana's Workforce Commission, which works with employers and employees, and Carl Van Horn, director and founder of the Heldrich Center for Workforce Development at Rutgers University.

Katherine Newman, I will start with you.

When you look at the current downturn and longer trends, do you get a sense that the job market is changing in some fundamental ways?

KATHERINE NEWMAN: Well, it looks terrible, of course. And it's changing in all of the negative directions that we have come to know from this recession.

I think most profound is what's happened to middle-aged workers, who are really taking this in the -- in the throat, and who have a lot of family responsibilities because of the way our households have been changing. They have younger children to take care of. And, so, the combination of our changing demography and the bad news in the job market is really a problem for American families.

JEFFREY BROWN: Carl Van Horn, you have just done a study called "The Anguish of Unemployment." Tell us what you found.

CARL VAN HORN: Well, what we were struck by in that study of unemployed Americans who lost their job in the last 12 months was how widespread the -- they reported their depression, anxiety, stress, and even anger was.

And it was really an equal opportunity. When you look at the demographics, whether it's by gender, race, income, age and so on, we find, across the board, people are really expressing profound personal catastrophes as a result of this recession.

JEFFREY BROWN: And, Tia Edwards, I guess you have to deal with real practical, immediate problems. What are you seeing?

Retooling, retraining the workforce

Tia Edwards
Louisiana's Workforce Commission
So, the emphasis is retooling, retraining to get those who have been dislocated back into the work force.

TIA EDWARDS: Well, in Louisiana, we -- the recession basically hasn't hit us. It came a little bit later for us in Louisiana.

So, many of our -- our workers and our employers are looking at the opportunity to retool the skill sets of our -- of our workers. How do we get retraining and opportunities to look at competencies and skill sets of those individuals who are coming out of those industry sectors that are on the downturn?

So, the emphasis is retooling, retraining to get those who have been dislocated back into the work force.

JEFFREY BROWN: And Jeff Joerres, general terms, what are you seeing when you're talking -- what are you hearing when you're talking with employers and -- and working with employees?

JEFF JOERRES: Yes, we -- we are in a difficult environment, because, actually, everything that's going on now was going on before. It's just been accelerated and exaggerated.

So, the individual challenges of having to be really adaptable to environments and companies always looking for different ways to compete, all those things were happening. The size of the downturn and the length of the downturn has taken these environments and just ratcheted them up and accelerated them.

So, we were planning on all of this. The challenge now is, is that it's so much and in such large numbers in front of us, that governments, companies and individuals are really in a tough spot right now. So, that's really what the challenge is.

JEFFREY BROWN: Well, so -- so, tell us a bit more, Mr. Joerres. What are -- what do employers say now to you when they're thinking about -- or are they changing their thinking about who they hire, when they hire, what they hire for?

JEFF JOERRES: Yes, no doubt. They have always been down this quest of, how can I do more with less? How do you get this environment where -- where I have got the exact right specific skills so that I can compete?

So, now what's happening is, is their demand is down, so they can be more selective. They're still hiring. And, in fact, our outplacement business is seeing that -- that companies are hiring, but they're being so selective, that individuals are saying, why not me? I thought I was qualified for this.

And what they're seeing is, is that companies have really narrowed their aperture for what they're looking for. And they have been able to do that because they're doing it in a more exact way.

JEFFREY BROWN: Katherine Newman, what do you make of what -- what Mr. Joerres just said about the mix of what we're seeing now, due to the recession, vs. longer-term trends? How does -- how does all that come together in what you see in the job market?

KATHERINE NEWMAN: Well, I think we do see a real premium on skill and very firm specific skill.

And what worries me about this is that our training system, which relies very heavily on public sector institutions, like junior colleges, is overwhelmed by demand, and the resources to fuel it are declining. The states are cutting their budgets in higher education at exactly the time when the work force needs to be able to return to skill up in exactly the way we just heard.

So, it's -- it's worrisome that we may not be able to meet that demand if we are relying on public institutions to do that training, as we usually do.

JEFFREY BROWN: Well, Ms. Edwards, why -- why don't you jump in there, from Louisiana? Working in state government, how do you -- how do you -- how do you deal with that?

TIA EDWARDS: You know, I -- that is exactly.

We're looking at in Louisiana huge cuts to our higher education system. And, so, it is truly -- truly a challenge. And more so now business and industry having to take the lead, really looking at customized training opportunities, looking at the private sector having to -- to come in, take the lead in developing training programs, are doing the, you know, on-the-job training, because there is a shortage, a cut, in those state dollars, federal dollars.

You look at the Workforce Investment Act, the work force dollars that many of our departments of labor have -- have so relied on, those dollars are being cut. So, the emphasis now is on, how do employers utilize customized training, on-the-job training to train their workers?

JEFFREY BROWN: Well, Mr. Van Horn, what do you see? I mean, what are the implications then for not only who does the training, but what kind of training we're -- we're preparing people for?

Demand for long term training

Carl Van Horn
Rutgers University
There's some increase in training dollars available through the federal government under the stimulus package, but the question is, for what are people being trained?

CARL VAN HORN: Well, it's an important point, because, actually, there's some increase in training dollars available through the federal government under the stimulus package, but the question is, for what are people being trained?

And a lot of that money is available for short-term training. And, in fact, I think people are going to need training in education for a longer period of time. And, again, we found in our survey -- and we have been tracking this for over 10 years now -- that, over time, as the structural problems go on, and then they get exacerbated during a recession, people, especially older workers, who are well-educated, have lots of skills, find themselves out on the street.

And, so, their optimism is taking it in the chin. And they don't really know where to turn. And there -- there aren't any easy answers with any sector of the economy at this point. There's, of course, a little bit of growth in education and health care. And that will probably continue.

But, when you look around at a lot of other places, there are not -- there's no automatic way to cushion yourself from this particular downturn.

JEFFREY BROWN: So, Mr. Joerres, what are the implications, then, for workers in terms of their -- their expectations, their -- their mobility, their -- even their viability, to be part of the work force? What do you tell people?

JEFF JOERRES: Yes.

It's a great question. And it's one that can't be answered simply, because this kind of change that has occurred is actually a great change for a small segment of the population, the higher-skilled, the ones who are adaptable, mobile and flexible.

But we're really talking about a small part. So -- so, when we get into this, you have this large swathe of middle class that is really having a difficult time. And when we go through and talk to those people, one of the things that we are seeing is the energy associated with intellectual curiosity, the kind of environment where someone says, I know I have to be an industry migrant. I used to work in the automotive industry. That's not available for me anymore.

The passion and the way they go at this is so important. And the challenge, as -- as recently referred to, is -- from the last speaker -- is they're really in a down state. So, somehow, they need too pick themselves out of this, accept some responsibility, knowing it may not have been their fault, and really go after the training that's available by the work force investment boards and some of the other things to try to create that industry migration into some other field.

JEFFREY BROWN: Katherine Newman, well, I mean, that raises another interesting point here, as Mr. Joerres just said, that it -- this is a great change in a way for some small sector of the population.

Now, does that suggest widening gaps, or different groups being hit in different ways?

KATHERINE NEWMAN: Well, different groups are being hit in different ways.

But, for a long time now, the high-skilled workers have been on the -- on the up side of our economy. That's a secular process that's been ongoing for the last 30 years or so. But, under recession conditions, high-skilled workers do better than others do.

That said, our research shows that high-skilled and well-educated workers are more vulnerable now than they were before. So, they're less vulnerable than working-class or blue-collar workers, but the risks to them are much greater than they used to be.

And I think that's where a lot of the fear comes from. If you can look at college-educated workers who are standing on the unemployment lines and ask yourself, as a high school graduate, "Well, then what is there for me?" there's a terror factor that comes from seeing even the best-placed people more vulnerable than they were before.

JEFFREY BROWN: Well, Tia Edwards, how do you weigh the different impacts on different groups like that, whether it's better- or lesser-educated men vs. women? I mean, there are all kinds of different ways of looking at this.

TIA EDWARDS: Well, the major point that we are stressing in Louisiana is, when we look at our backbone industries in our state, is career pathways and career ladders and career lattice.

Of course, being a skilled worker -- and, you know, in Louisiana, our emphasis had been for so long on the college-educated worker. And -- but the focus needs to be on how we develop career pathways, on how do we get an entry-level worker to move from that entry level into a higher skilled worker, so that, in case there is the opportunity for there to be a downturn in a particular industry sector -- for example, in our state, advanced manufacturing -- how, then, can we move that individual from transferability, I guess, of skills?

So, the emphasis needs to be more on career pathways, career lattices, career ladders. And, so, that's where we're placing a lot of, how do we get our training and how do we get our individuals who have been laid off or who have lost their jobs, been dislocated workers, into some training that will allow them to move from one industry sector to another?

Difficult to be optimistic

Jeff Joerres
Manpower
Employers, we are seeing, are starting to tick up. The optimism is -- is slightly there. But we need demand. We need demand for products and services.

JEFFREY BROWN: Well, Mr. Van Horn, to the extent that economic history is full of churning and ups and downs, are -- you look at a moment like this and you look ahead, are there any positive signs that you can take out there from what we're seeing that might be hopeful in the coming years in terms of for employers or employees?

CARL VAN HORN: History tells us the recession will end and most of these people will get jobs. But, in the short run, it's difficult to be optimistic.

I think that there are -- with 15 million people unemployed, that's not a small swathe of the economy. That's huge, and certainly nothing like it in 35 years, as the jobs report showed, came out on Friday of last week.

And the positive thing that you can get out of this, perhaps -- and we see this in the way our respondents react to our questions, especially in their verbatim responses -- Americans are perseverant and they're resilient. And they keep coming back, or they keep trying.

And, in fact, two-thirds of them, or more than two-thirds, said they were willing to take a cut in pay. Now, that -- that shows you how they're flexible. Thirty-four percent said they're willing to move. And the vast majority said they will try another career.

So, they're willing to go with the changes if they can find a job. But, again, when demand is down, it's -- it's hard for them to find a place. There's no safe haven. So, the optimistic news is really in short supply, except American workers still remain very resilient and determined to try to get back. They really don't have any other choice, but they do come across as very strong-willed people to us.

JEFFREY BROWN: Mr. Joerres, you're working with employers that clearly want to take the long term. I mean, what -- are there some positive trends that -- that you see that you can offer them?

JEFF JOERRES: Oh, there's no doubt about it.

I mean, what we're seeing in companies is -- is, they want to hire. But they're also knowing that they can't get their expenses ahead of their revenues. So, they're being very practical. They also are hearing and getting all the data, saying, where is this really going?

And, as long as there's these challenges in here, you really get that employer stuck. And the employer is stuck, because the employer is -- is knowing that they have got to do some cost things, but at the same time worried about their employer brand. And they're frustrated, having to make hard decisions that are saying that I need to have furloughs, I need to have these environments, very frustrating, because they know that they're hurting themselves in the future.

But they can't do anything, because they really need some cash flow right now. So, employers, we are seeing, are starting to tick up. The optimism is -- is slightly there. But we need demand. We need demand for products and services, because you can have no false economy. It has to be a real economy to hire people.

JEFFREY BROWN: All right. We will leave it there with a little bit of hope out there.

Katherine Newman, Jeff Joerres, Tia Edwards, and Carl Van Horn, thank you all very much.

KATHERINE NEWMAN: Thank you.

CARL VAN HORN: Thank you.

TIA EDWARDS: Thank you.

GWEN IFILL: Over on our Web site, find more of Paul Solman's reporting on the realities of the recession and read his answers to your questions on jobs and the economy on The Business Desk. That's all at NewsHour.PBS.org.