While announcements of job cuts, layoffs and
corporate belt-tightening have shaken consumer confidence,
economists say all the news does not spell gloom and doom.
Not conveyed, they contend, is that many cuts will occur
overseas or will come through attrition and retirement even over
"The implication is you can go tomorrow and find these people
walking the streets, and that doesn't necessarily happen," said
Lewis Siegel, a senior economist specializing in layoffs for the
Bureau of Labor Statistics.
Layoff notices rose to 142,208 in January the highest total in
the past eight years, according to Challenger, Gray & Christmas, a
private Chicago placement firm.
Appliance maker Whirlpool Corp. plans to make most of its
announced 6,000 layoffs in Latin America, Europe and Asia. Most of
the 300 North American jobs it wants to cut will be eliminated
through voluntary retirement.
DaimlerChrysler's plan to shed 26,000 jobs will occur over the
next three years and much of it through retirement programs,
attrition and some phased-in layoffs.
Nortel Networks had already cut 6,000 of the 10,000 jobs it
announced last month it would eliminate, and will minimize layoffs
by not replacing workers who retire or quit. Verizon Communications
said last month it expects to cut the equivalent of 10,000 jobs
this year mostly by not filling vacancies and cutting overtime
and the use of contractors.
For those 142,208 announced cuts in January, overall payrolls
increased that month by 268,000 new jobs, according to the Bureau
of Labor Statistics. The unemployment rate rose only slightly in
January to 4.2 percent from 4 percent in December the latest
Finding a new job is not the hard part for Mike Cook, 41, of
Levittown, Pa., laid off two weeks ago at U.S. Steel's Fairless
Hills plant where he worked as an electrician. He had only been
back on the job about a week after being laid off previously for
about 11 weeks.
Cook, a United Steelworkers of America union member, is hopeful
he will get recalled again this time before his 26 weeks of
unemployment compensation runs out. He worries about finding a new
job that can come close to his benefits and pay. An employee for 13
years, he was paid $18 an hour with a pension and good health and
He considered going to work for a contractor at the steel mill,
but was not offered any health care coverage or benefits. One of
his three children is a special education student who needs medical
care, so benefits are a must. His wife does not work.
"Most places want to have a no-strings-attached kind of
employee," he said. "There are not a lot of big industries left
in this country that are offering the kind of benefits and pay I'm
Theoretically, laid-off workers have employment opportunities in
the new jobs still being created. The services sector added 81,000
jobs in January, and hospitals and doctors' offices reported solid
gains. So did construction, real estate firms and mortgage banks.
Many companies still have "help wanted" signs posted. A survey
of second-quarter hiring plans by temporary staffing agency
Manpower Inc. showed that 28 percent will need additional staff in
the second quarter, while 8 percent plan cutbacks. The report,
based on a survey of 16,000 businesses nationwide, showed that some
59 percent expected their work forces to be unchanged, and 4
percent were uncertain.
A year ago, 32 percent said they would hire staff, while 6
percent predicted cuts. Some 58 percent expected no change and 4
percent were uncertain.
Despite the failure of many dot-coms, technology companies still
are hiring and expanding.
"The industry continues to grow, but just a lot more slowly,"
said Mark M. Zandi, chief economist for consulting firm
Economy.com. "There were so many open positions going begging
before the current problems, and now they're being filled."
Manufacturing in particular is seeing tough times. The sector
was the hardest-hit in January, losing 65,000 jobs the largest
decline in five months and bringing total factory losses to a
quarter-million since June.
Many of the layoffs being announced are in manufacturing. The
gloom tends to get cast over the entire economy, but much of the
bad news is relegated to one sector, said economist Ken Mayland,
president of ClearView Economics.
"These news items make splashy, perhaps even gut-wrenching
headlines, but those headlines aren't representative of what's
going on in the whole economy," he said.
The fastest-growing occupations through 2008, according to the
Bureau of Labor Statistics, include computer engineers, computer
support specialists, systems analysts, database administrators,
desktop publishing specialists, paralegals and legal assistants,
medical assistants and home health aides.