Many American workers idled by the 1.9 million layoffs this year are trying to re-enter a shrinking pool of jobs. It won’t be easy for them.
There are 3.3 unemployed individuals available for every vacancy — a ratio that likely will worsen as the recession deepens.
Research suggests that workers let go during a recession face job hunts that last at least four months, and when they do find work, they accept a 20 percent to 30 percent pay cut, on average.
Unemployment insurance is cushioning the blow for some, but many states’ reserves are dwindling. Since June, Congress twice has authorized extensions of the 26 weeks of benefits, tacking on additional weeks in states with high unemployment.
Downturns tend to winnow jobs that would have hung on longer in flush times. For many workers, this rapid shakeout “will plausibly lead to a kind of downward mobility,” said David Autor, a Massachusetts Institute of Technology economist. To climb back to their former wage level, some workers must not only find another job but also retrain for a new occupation.
They generally won’t find that help at the almost 3,000 “One Stop” career centers run by states and municipalities. Rather than vocational and technical training, the centers provide career counseling, access to computers and job listings. Some have classes in office skills and English as a Second Language.
“Essentially what we have now is job-search assistance, which has been found to be effective, especially for workers who haven’t prepared a resume or haven’t gone on a job interview in many years,” said Alan Krueger, an economist at Princeton.
Community colleges do a considerable amount of vocational training, through courses that lead to certifications for positions such as paralegal, medical-office clerk or computer-network technician. For the past four years, the U.S. Department of Labor has awarded $125 million annually in Community-Based Job Training Grants, most of which goes to community colleges.
Unions also play a role, working with companies to create retraining programs. However, “the challenge is, ‘training for what?”‘ said Jane McDonald of the AFL-CIO. “We don’t want to make federal investments in training programs for low-wage…jobs. We want those training programs to lead to good jobs.” Enrolling in a one- or two-year certification program isn’t an option for job seekers who need to find work quickly. Tuition also is a hurdle for some newly laid-off workers, whose recent earnings make them ineligible for financial aid. In addition, while many schools offer placement assistance, they can’t guarantee every student a job in the field for which he or she has just prepared.
Confronted with the choice of training for a future job or returning to work right away — even at a lower wage — many are signing on with temporary-help firms. For decades, staffing companies were seen by many as repositories for dead-end jobs. That perception has changed as firms have expanded to include higher-paying positions, many in specialized services such as health care, law and accounting.
“Temporary” is a relative term in staffing. In 2001, Agapito Soto, an Irvine, Calif., information-technology consultant, signed on with Sapphire Technologies, a temp agency that specializes in high-tech work. The agency placed the 55-year-old Mr. Soto in a full-time slot with the Orange County Sheriff’s Department, which continues to this day. Mr. Soto says he has notched on-the-job learning in his seven years at the Sheriff’s Department.
He has even passed up permanent jobs that would match his salary because he figures those positions would be vulnerable to cuts that don’t affect temps. “With the current climate, employers are looking at spending less,” he said.
Many companies use staffing firms to screen applicants, trying out several workers in succession and then offering a permanent job to one. About 60 percent of temps who sign on with Manpower Inc., one of the nation’s largest staffing agencies, get a permanent assignment through the company, said Chairman Jeffrey Joerres.
Most large staffing firms provide temporary workers benefits such as health insurance and vacation pay. They also offer a form of training through online and classroom courses on computer skills, project management and other subjects. In a 2006 survey by the American Staffing Association, more than 88 percent of the roughly 13,000 current and former temporary workers polled said their stints as temps — with firms that are members of the trade association — made them more employable. Twenty percent of all workers surveyed said they improved their skills with training provided by the staffing firm.
But there are limits to what a short-term job can provide. While temp workers may be the first to be hired when business heats up, they are also the first let go when it slows. Employment at temporary-help agencies in November fell 15.4 percent from a year earlier to 2.2 million, according to the Bureau of Labor Statistics. That’s far steeper than the 1.3 percent decline across the economy.
Overhauling unemployment and training programs will be a challenge. President-elect Barack Obama backed the most recent extension of unemployment benefits and said his economic stimulus package will be the administration’s top priority. The package’s emphasis on creating jobs through infrastructure projects evokes New Deal-era programs. Some of those programs included not career counseling but training workers — an aspect ready for revival.
