Quick economic turnaround could save white collar jobs
Economists see serious storm clouds ahead for the nation's white-collar workers. So far, unemployment figures show that white-collar workers -- from administrators to secretaries and technicians -- have not been as affected by the recession as blue-collar workers. From March to June, white-collar unemployment rose from 3.3 to 3.7 percent, while blue-collar joblessness soared from 8 percent to 11.5 percent during the same period.
But Dr. Lester Thurow of the Masasachusetts Institute of Technology (MIT) notes that one of the first signs of rough times ahead in the white-collar sector are the dwindling number of new job openings.
Dr. Thurow says reports are increasing that high school and college graduates are having a more difficult time finding white-collar niches than in previous years.
"The national outlook [from a recent survey] showed a sharp decline in anticipated hirings for July, August, and September," says Elly Pick-Jacobs, chief spokesman for Manpower Temporary Services, Inc., the national employment agency widely respected for its forecasts.For instance, in the "durable" goods retailing area -- appliances, autos, radios -- the survey found that 25 percent of the employers anticipated more layoffs while only 15 percent said that they would be hiring people.
"Typically, in a recession, white-collar workers are not laid off as quickly as blue-collar workers," Dr. Thurow says. But he adds that business and industry "will lay off white-collar workers in greater numbers" during this downturn in the nation's economy.
The reason, he says, is because the recession is gaining momentum without any immedate prospect of a tax cut or other recession-fighting tool, hence there "is apt to be a very slow recovery from it," which would tend to prolong its effects.
Dr. Thurow, who worked for candidate Jimmy Carter in the last presidential race, says he is not taking sides this time around, even though he faults the administration for the high unemployment rate. More than 2 million white-collar workers are out of work.
Alan Murray a vice-president and economist of Citicorps, the parent company of Citibank of North America, the nation's second-largest bank, also believes that the out-look for white-collar employment is gloomy, even though most attention is focused on the plight of the nation's blue-collar workers.
However, he is more optimistic than Dr. Thurow that the economic horizon "will be on the way up again early next year."
White-collar unemployment now is not that far away from its high point during the last decade. In May 1975 there were 2.36 million white-collar workers unemployed, compared to the 2 million currently.
The experts are divided on which way the economy will go next year. The Carter administration is forecasting an upturn also and is prepared to call for a tax cut as a last resort.
But the pinch on white-collar labor already is being felt in the retail industry. Dr. Murray, for one, finds "the severity of unemployment in the retail sector unusual" for any recent recession.
Economists say that many thousands of retail clerks, who are at the lower end of the white-collar salary scale, have been thrown out of work because of depressed store sales this spring and summer.
Some experts blame the credit crunch, which started with the Federal Reserve Bank tightening the nation's money supply this spring on top of the recession for the high unemployment in the US retailing industry.
As of May, demand in the stores was down by 5 to 10 percent from the previous year, according to Joseph Elas of the New York brokerage firm of Goldman, Sachs & Co. But for some stores, demand is off by 25 points.
"What you hear about are the layoffs of auto workers and the steel workers but the white-collar worker without a job is equally hurt," says Phillip Rowes, an unemployment analyst for the US Bureau of Labor Statistics.