Waning era of 'now hiring'

Mounting layoffs lead to a shift in attitude on the shop floors of America.

Just a few short months ago, the US economy was a worker's paradise: nearly unlimited overtime, signing bonuses for new hires, and perks such as stock options and free food.

But now as the economy starts to slow, it's beginning to look like Paradise Lost.

Companies are eliminating worker enticements, a new round of layoffs is sending everyone from hard hats to dotcomers to unemployment offices, and a lot of those ubiquitous "Now hiring" placards are slipping from front windows.

All these signs probably mark an end to one of the greatest periods of job growth in modern US history.

For the past three years, the US economy has created nearly 8 million new jobs. Virtually anyone who wanted to work could. This has benefited everyone from prisoners to welfare recipients to high school graduates.

But now, "the strongest period of job growth is behind us," says economist Mark Vitner of First Union Bank in Charlotte, N.C.

One of the first signs that this is happening came on Friday, when the government reported

that payrolls in December climbed a tepid 105,000, while unemployment remained at 4 percent. One measure of the economy's distress: The total number of hours worked fell 0.7 percent, an indication that business is trying to reduce labor costs by eliminating overtime.

With order books shrinking, more layoffs are coming. Mr. Vitner expects the jobless rate to hit 4.5 percent by midyear.

Rust Belt redux?

The hardest hit segment of the economy is manufacturing, which lost 54,000 jobs in December. Companies have already announced plans for another 134,000 layoffs.

"It's the heaviest since we began tracking the numbers in 1993," says John Challenger of Challenger, Gray & Christmas, an international outplacement firm.

In another indication of changes in the labor market, the Conference Board's Help Wanted Index shows companies are placing far fewer ads to find workers. Even so, Board economist Ken Goldstein cautions that this is partially because there are fewer workers to hire, so firms have reduced their advertising.

Still, there does seem to be at least a shift in psychology on shop floors. Businessman David Walters of CR Metals says he's still hiring people at his family's metal-fabrication firm in St. Louis. But workers at the plant perceive a change is taking place. "People are saying 'we better stop complaining and buckle down for a while,' " he says. "For a number of years, the employees felt they were in the driver's seat."

A more tangible shift appears to be taking place in some of the traditional Rust Belt areas. In the Ohio Valley, for instance, Santo Santoro, a staff representative of the United Steel Workers (USW) in St. Clairsville, says there are no jobs in the area other than "working at McDonald's or some other hamburger joint."

Similarly, layoffs in Decatur, Ill., are making it hard for some 400 unemployed Bridgestone-Firestone workers to find new work. Roger Gates, president of the local USW, says his workers have lost jobs paying $14 to $20 per hour. "Even though they have real good work habits, it's hard to find other similar jobs," he says.

It's not just the pay that's lower for skilled workers, but also the benefits. In August, Matt Means, a fourth-generation steel worker, got laid off from Gulf States Steel Corp. in Gadsden, Ala. It took him 3-1/2 months to find a new job teaching at a local vocational school. Although he got feelers from Florida and Iowa, he didn't want to relocate. So he now pays $150 a month for his health and dental plan. "I've cut back on my spending," says Mr. Means.

Even high-tech employees sense some distress, despite claims of a 600,000-worker shortage in the industry. "A year ago, workers were so hard to get in high technology that companies had a policy of not letting anyone go, period," says Sung Won Sohn, chief economist at Wells Fargo Banks in Minneapolis.

It's not hard for Mr. Sohn to find an example of the shift. While studying software engineering at Harvard University, his daughter got a job at $6 an hour. Then, another company offered her $40 per hour. Now the firm has made her a part-timer.

Slow retail registers

The ranks of the unemployed are also growing because of slow times in retailing. In recent weeks, Bradlees and Montgomery Ward have gone into bankruptcy, eliminating more than 37,800 jobs. Last week, Sears announced another 2,400 layoffs.

Ann & Hope, a regional discount department store, is closing four Massachusetts stores and will eliminate 1,400 jobs by May 1. At one outlet in Watertown, Mass., employees seemed unprepared for the news last week. Only hours after the company announcement, a "Now Hiring" sign was removed from the front entrance like a leftover Christmas decoration.

One employee, Jay Morton, says he's not sure if he'll look for a new job right away. He may start taking full-time computer classes at a local college.

That may be a good instinct. Lydea Monahan, a manager at Staffmark, a job-placement firm in Lexington, Mass., suggests people with retail experience bone up on software skills before returning to the market.

Indeed, specialists believe retail workers should still be able to find good jobs - provided they're willing to look in other industries. "The key here is: If a person is looking to go from a Bradlees and stay in the same type of market, that may be a little more difficult," says Anne Chace of Boston Career Link.

Samar Farah contributed to this report from Boston.

(c) Copyright 2001. The Christian Science Publishing Society

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