CHAPTER 2
THE CHANGING AMERICAN WORKFORCE

A WORKPLACE IN TRANSITION

Throughout most of the 1990s the rapid increase in the labor force (those working part- or full-time or unemployed but actively looking for a job) put a severe strain on the economic system to produce more jobs. At the same time, multinational companies shifted many tasks overseas, worldwide competition became more intense, and significant economic activity became international. American companies responded to these changes in many ways:

• Greater use of technologically advanced machinery designed to replace human workers;
• Greater pressure on workers to limit wage and benefit demands (especially for new entrants into the job market), or to "give back" already existing benefits;
• Management programs designed to accomplish more per worker so that the economy could remain competitive with international economies (which often have considerably lower standards of living);
• Employee reductions through layoffs or early retirement;
• Increased attempts to become part of an international economy.

Downsizing the labor force to become more competitive in the international market became the management style of many companies in the late 1980s and early 1990s. Many companies laid off older workers to cut expenses. Many of these laid-off workers, however, returned to their firms as contract workers. Some began working for less money than they had earned when they were direct employees. Even if the firm pays the contract worker at the same rate, the companies do not have to pay for health or retirement benefits.

In 1997 and 1998 a booming economy led to the creation of hundreds of thousands of new jobs. This led to a tight labor market in which there was a demand for workers. Earlier in the decade, workers worried about losing their jobs and tended not to ask for raises. The changing economy, with many areas having a shortage of workers, changed some workers' outlooks on job possibilities and wage increases. College graduates at the end of the 1990s were finding jobs more easily than in the past, and many received signing bonuses.

At the same time the economy was producing many thousands of jobs, the U.S. Conference of Mayors, in its survey of thirteen cities, feared a shortage of low-skilled jobs. For example, in 1997 Detroit officials estimated that more than 93,000 people, including welfare recipients participating in workfare, would compete for a projected 18,447 jobs. The problem, however, was that most of the low-skilled jobs were in the suburbs, and many of the people in need of low-skill jobs were in the inner cities. Public transportation between the two places was not always available.

According to the Bureau of Labor Statistics (BLS), through the 1990s the average unemployment rate gradually declined from a decade-high 7.5 percent in 1992 to 4.0 percent in 2000 ("Employment status of the civilian noninstitutional population, 1940 to date," online, http://www.bls.gov/cps/cpsaat1.pdf, accessed July 7, 2004). With a weakening economy in 2001, the average unemployment rate rose somewhat to 4.8 percent. The September 11, 2001, terrorist attacks on the United States in New York City and Washington, D.C., further affected the weakening economy and unemployment rates. At mid-2002, the rate (unadjusted seasonally) stood at 5.9 percent. By June 2003 the unemployment rate had risen to 6.4 percent, the highest point since 1992, accounting for 9.4 million people who were receiving unemployment benefits and actively seeking work. In February 2004 the rate of unemployment was measured at 5.6 percent, based on 8.2 million individuals actively receiving unemployment benefits.

SERVICE ECONOMY

The American economy has moved away from producing goods to providing services. From about 1970 to 2003, the service-producing sector has accounted for an increasing proportion of workers. In 1960 for every goods-producing worker, there were about 1.8 service-producing workers. By 1970 the ratio was one goods-producing worker to every 2.2 service-producing workers, and by 2003 it was nearly one to five. (See Table 2.1.)

From 1992 to 2001, construction was the only industry in the goods-producing area that consistently employed more workers each year. In 2002 this number dropped slightly, but the upward trend returned in 2003. The number of employees working in natural resources and mining has fallen significantly in the past two decades. In 2003 the number reported (571,000) was less than half of the fifty-year high for the industry, which was set in 1981 (1.2 million). The number of workers in manufacturing was roughly the same in 2000 as it was in 1970, but a significant decline can be seen since 2001. In 2003, manufacturing

employees (15.4 million) were at their lowest number in the preceding fifty years. In addition, the proportion of manufacturing jobs fell from 34 percent of all jobs in 1951 to just 11.7 percent in 2003. (See Table 2.1.)

In 1945, at the conclusion of World War II, services industries accounted for 10 percent of nonfarm employment, compared with 38 percent for manufacturing. In 1982 services surpassed manufacturing as the largest employer among major industry groups. By 1996 the services industry accounted for 29 percent of nonfarm employment, and manufacturing, at 15 percent, was actually somewhat smaller than retail trade. (See Figure 2.1.) Note that a new industry classification system and new population controls were used for the data in this figure, so the numbers in it are not strictly comparable to the numbers in Table 2.1.) In 2003 the services industry accounted for 45.4 percent of nonfarm employment (See Table 2.1.)

Service-producing industries include jobs in transportation, wholesale and retail trade, services, finance, public service (government) and more. Within the service-producing industry, service industry jobs are found in legal services, hotels, health services, educational services, and social services, among others. However, all jobs within the service industry are not necessarily service occupations. For example, while hotels are part of the services industry within the service-producing sector, they not only employ workers who are in service occupations, but also secretaries, managers, and accountants whose occupations are not considered service occupations.

The largest category of service-providing jobs is found in the group of trade, transportation, and utilities occupations (23.4 percent in 2003). Federal, state, and local government jobs accounted for nearly 20 percent of the total service-providing jobs in 2003. About 21.6 million persons (about 9 percent of the nonfarm working population) worked in government positions in 2003. (See Table 2.1.)

Because average wages are higher in manufacturing than in services, some observers view the apparent shift in employment from goods-producing to service-providing as a change from "good" to "bad" jobs. In "The Services Industry in the 'Good'Versus 'Bad' Jobs Debate" (Monthly Labor Review, February 1998), Joseph R. Meisenheimer II found that many service industries equal or exceed manufacturing and other industries on measures of job quality, while some service industries could be viewed as less desirable by these measures.

Meisenheimer stresses the importance of examining more than just average pay when assessing the quality of jobs in each industry. Within each industry, there are jobs at a variety of different quality levels. The quality of service-industry jobs is especially diverse, encompassing many of the "best" jobs in the economy along with a substantial share of the "worst." Thus, employment shifts away from manufacturing and toward services do not necessarily signal deterioration in overall job quality in the United States, although, in many cases, they certainly can.

HOW LONG DO AMERICANS WORK?

Between 1990 and 1995 the United States stood out among all nations as a country with an advanced economy that had the longest work year. The average length of Japan's work year, however, declined during that time period. The United States has a long work year, due in part to a lack of legally mandated, employer-paid vacation time. Such paid vacation time is common in many countries in Europe.

In 2003 almost 76 percent of nonfarm American laborers were working full-time (thirty-five hours or more), while the remaining 24 percent were working part-time (less than thirty-five hours). The average worker labored thirty-nine hours per week (average hours of part-time and full-time), while the average full-time employee worked 42.9 hours per week. Women had a higher proportion of part-time workers (32 percent) among their population in the workforce than did men (17 percent). As a result, men worked an average of 41.7 hours per week, and women worked an average of 35.9 hours per week. (See Table 2.2.) Almost 18 percent of all nonfarm workers spent more than forty-nine hours a week on the job. More than one-third (36 percent) of agricultural workers labored more than forty-nine hours per week. (See Table 2.3.)

Studies vary in assessing Americans' work hours over time. A study in the BLS Monthly Labor Review, July 2000, indicates that data from the Current Employment Statistics (CES) program showed a long-term decline in the number of hours worked per week from 38.7 hours in 1964 to 34.5 hours in 1999, an 11 percent reduction over that period. Reflected in these figures is a large decrease in hours for certain industries, particularly retail.

Some occupations require more time than others. Transportation and material-moving workers labored 40.5 hours per week (43.9 hours for workers on full-time schedules). Executive, administrative, and managerial people averaged about 41.1 hours (44.1 hours a week for full-time). (See Table 2.2.)

According to another report, "Trends in the Hours of Work Since the Mid-1970s," that was published in the BLS Monthly Labor Review, April 1997, the average number of hours worked each week has changed little since the mid-1970s, but the proportion of people working very long work weeks has risen.

From 1976 to 1993 average hours at work increased only one hour, from forty-one to forty-two hours, for men, and two hours, from thirty-four to thirty-six hours, for women. These increases can be partially attributed to the changing age profile of the American workforce. Table 2.4 shows this calculation as if the age distribution of those at work had remained unchanged between 1976 and 1993. After removing the effect of age, as the table also reports, the work week for men was virtually unchanged and women's average weekly hours rose by only a single hour.

By 1993 baby boomers—those born between 1946 and 1964—had all moved into the middle working ages of twenty-five to fifty-four. Meanwhile, younger and older workers made up a declining share of the workforce.

Workweeks typically are longer for workers age twenty-five to fifty-four, and part-time employment is more common among younger and older workers. This pattern continued in 1995, with men working 42.1 hours overall, but men in the twenty-five to fifty-four age category worked 44.1 hours. (See Table 2.5.)

Many employees are working longer hours by skipping or shortening their lunch breaks. The National Restaurant Association reported (in "What's for Lunch? A Survey of Full-Time Employees," 2002) that 40.6 percent of the surveyed workers said they did not leave the office for a lunch break. Forty-five percent reported they had less time for lunch than they ever had. Many workers say they stay on the job to get things done because they fear being downsized. Fewer workers often mean those remaining have to do more.

Who Is Working the Longer Work Weeks?

The growth in the share of workers reporting very long work weeks is often attributed to a shift in employment toward high-hour occupations, such as managers, professionals, and certain sales workers (See Figure 2.2.) This may reflect the considerable responsibilities associated with many of these types of jobs. In addition, employers are often not required by law to pay overtime premiums to workers in these occupations, as they must for most hourly paid workers.

The changes in number of hours worked varies in different employment sectors. For example, between 1964 and 1999, mining, construction, and manufacturing jobs increased in the number of hours worked weekly. The service-producing industries, including transportation, all decreased the number of hours worked. Retail trade had a dramatic decrease in hours worked weekly. (See Table 2.6.)

In 1997 many trade organizations reported that their members were working a lot of overtime because of economic expansion. Professional Secretaries International (Kansas City, Missouri) found that the proportion of its 27,000 members putting in forty to forty-four hours per week rose from 64.7 percent in 1992 to 68.4 percent in 1997. According to the National Restaurant Association, its members increased their average hours from 51.2 in 1992 to 56 hours in 1997. The BLS reported that the weekly hours for temporaries rose from 27.1 in 1982 to 32.3 in 1997. Manufacturing jobs reached a high of 41.7 hours worked per week in 1999. The figure for mining jobs was even higher, at 43.8 hours per week. (See Table 2.6.)

Part-Time Work

People work part-time for various reasons. In 2003 nearly 15 percent of part-time workers took part-time work due to economic conditions. These economic reasons, usually caused by employers' circumstances, included slack work, material shortages, or the availability of only part-time work. Most workers (86.3 percent) who usually worked part-time did so for noneconomic reasons. They did not want to work full-time or were unavailable, perhaps because they were going to school, were taking care of children, or had other family or personal obligations. (See Table 2.7.)

MULTIPLE JOBS

In 2002 and 2003, 5.3 percent of workers held multiple jobs. The proportion of women holding more than one job (5.6 percent) was slightly higher than that of men (5.1 percent). Single women (6.4 percent) and widowed, divorced, and separated women (6.7 percent) were most likely to have more than one job in 2003. Married women (4.8 percent), single men (4.6 percent), and divorced, widowed, or separated men (4.6 percent) were the least likely. (See Table 2.8.)

CONTINGENT WORKERS AND ALTERNATIVE WORK ARRANGEMENTS

According to the BLS, even though most formal studies have found no change in workers' overall job tenure, media reports and personal experience of corporate down-sizing, production streamlining, and the increasing use of temporary workers have caused many workers to question employers' commitment to long-term, stable employment relationships. There is also a growing sense that employers, in their attempts to reduce costs, have increased their use of "employment intermediaries," such as temporary help services and contract companies, and are relying more on alternative staffing arrangements, such as on-call workers and independent contractors/freelancers. Permanent workers sometimes fear they will be replaced by these alternatives.

Workers may take employment in a nonstandard arrangement, such as working for a temporary agency, for a number of reasons, including inability to find a permanent job, wanting to work fewer hours when they have a young child at home, or wanting to learn about a number of different jobs or fields. In addition, some nonstandard work arrangements, such as consulting or contracting, may provide workers with relatively more flexible and lucrative employment opportunities.

Contingent Workers

The BLS defines contingent work as any job in which an individual does not have an explicit or implicit contract

for long-term employment. This includes independent contractors, on-call workers, and those working for temporary help services. The February 1995 Current Population Survey estimated that between 2.7 and six million workers (2.2 to 4.9 percent of total employment) were in contingent positions. In February 2001 BLS data indicated few differences since the benchmark survey in 1995.

The reason the estimates ran from 2.2 percent to 4.9 percent of total employment is due to alternative definitions. For "Contingent Work in the Late 1990s" (Monthly Labor Review, March 2001), Steven Hipple used three different methods for estimating contingency rates. Estimate 1, the narrowest estimate, included wage and salary workers who had held their jobs for one year or less and expected to be employed for an additional year or less. Estimate 2, the middle estimate, added the self-employed and independent contractors. Estimate 3, the broadest estimate, dropped the time limit on wage and salary workers and included any worker who believed his or her job was temporary. (See Table 2.9.)

Contingent workers were more likely to be in professional specialties; administrative support; service; and

farming, forestry, and fishing; and less likely to be in executive, administrative, and managerial; technical; or sales occupations. (See Table 2.9.) It might seem surprising that contingent workers appear to be overrepresented in professional specialty occupations. However, this category includes teachers, who had an above average rate of contingency.

Colleges and universities use many adjunct or temporary teachers with short-term contracts. College and university instructors have, according to a 2001 BLS report, the highest contingency rate (29 percent) of all workers in the professional specialty category. Other professionals with high rates of contingency are physicians (12.3 percent), biological and life scientists (11.8 percent), and photographers (9.1 percent). Those with the highest rates of contingency in the administrative support category include library clerks (24.1 percent), interviewers (19.2 percent), general office clerks (14 percent), and receptionists (8.9 percent).

In February 2001 the BLS reported that between 51.7 percent and 55.4 percent of all contingent workers were employed in the category of services. Between 11.6 percent and 14.1 percent were in retail trade occupations. The ranges vary based on the application of alternative definitions of "contingent workers," as described above. (See Table 2.10.)

CONTINGENT WORKER CHARACTERISTICS.

Black and Hispanic laborers were more likely to be contingent workers, whereas whites were more likely to be noncontingent workers. Those laborers between the ages of twenty and twenty-four years were more than twice as likely to be contingent workers as noncontingent workers. BLS data covering trends in contingent worker characteristics between 1995 and 1999 suggest that contingent workers were also more likely to be enrolled in school but not have a high school diploma than noncontingent workers. (See Table 2.11.) The data also demonstrate that contingent workers are more likely to be employed full-time (51 percent to 58 percent) than part-time (49 percent to 41 percent). (See Table 2.12.)

Alternative Work Arrangements

Employees in alternative work arrangements are individuals whose place, time, and quantity of work are potentially unpredictable or individuals whose employment is arranged through an employment intermediary. By 1999 these included workers such as independent contractors (6.3 percent of total employed), on-call workers (1.5 percent), workers paid by temporary help firms (0.9 percent), and workers whose services are provided through contract firms (0.6 percent). (See Table 2.13.)

Some of the alternative arrangements have been in existence for decades; however, there is a lack of data analyzing the number of workers in these arrangements. The ranks of independent contractors include construction workers and farmhands whose working situations did not change much in the twentieth century. Similarly, on-call workers such as substitute teachers, registered nurses, and performance artists did not see much change in the manner of obtaining work. However, temporary help agencies can only trace their widespread existence in the United States to shortly after World War II, and there is evidence that providing employees to fulfill the administrative or business needs of other companies is a spreading phenomenon.

By 2001 the BLS found that approximately 12.5 million persons, or 9.3 percent of the workforce, fell into at least one of four categories. The largest category was independent contractors, with 8.5 million, followed by on-call workers (two million), temporary help agency workers (1.6 million), and contract company employees (633,000). (See Table 2.14 and Table 2.15 for selected characteristics of workers in alternative work arrangements.) According to a February 2001 news release from the BLS ("The Employment Situation, January 2001"), independent contractors numbered 8.6 million (6.4 percent of the workforce) in early 2001. Other alternative work arrangement categories similarly remained at 1999 levels.

TEMPORARY WORKFORCE.

In its 1997 survey, the National Association of Temporary and Staffing Services (NATSS) found that many of those who enter the workforce for the first time see temporary work as an "entry level transitional form of employment." One-fifth (21 percent) of those who became temporary employees had been students prior to their employment.

The survey asked the respondents why they became temporary workers. Three-quarters (74 percent) saw working as a temporary employee as "a way to get full-time work," and 73 percent wanted additional income. Two-thirds (64 percent) wanted to improve skills and have flexible work time. Only one-fifth (19 percent) worked at temporary jobs because they could not work full-time.

NATSS projects an increase in hiring temporary workers in industrial, construction, technical, and professional worker categories as businesses reduce staff. According to the U.S. Census Bureau (Service Annual Survey: 1997, Washington, DC, 1999), in 1993 office support temporary workers accounted for 37 percent ($10.7 billion) of total receipts for temporary help agencies. By 1997 office support receipts were 35 percent ($18.0 billion) of the total revenue, the biggest proportion of the receipts to the temporary agencies. Industrial and construction temporary employees brought in 19 percent ($8.0 billion) of the total revenue in 1993; by 1997 they were 24 percent ($12.3 billion). The temporary employment of technical and professional workers increased as well. Total revenues more than doubled from $6.7 billion in 1993 to $15.5 billion in 1997.

The hiring of temporary workers has steadily increased in the overall job market. Temporary jobs accounted for about 0.5 percent of all jobs in 1983. That rose to nearly 3 percent of jobs in 1999, according to the BLS data. Following the terrorist attacks on the United States on September 11, 2001, observers noted a reduction in the size of the temporary workforce. Then, as in prior years, size and growth in the temporary workforce were seen as indicators of economic growth or stagnation. Since 2003 the temporary workforce has been increasing once again. A BLS report in February 2004 noted that 215,000

temporary jobs had been added to the U.S. employment market between April 2003 and January 2004.

AT-HOME WORK

Between 1960 and 1980 the number of Americans working at home steadily declined, largely reflecting a drop in the number of family farmers who gave up farming. In addition, many professionals, such as doctors and lawyers, left their home offices and joined group practices or larger firms in office buildings. This trend was reversed by 1990 according to data from the U.S. census of that year, which showed a dramatic increase in the number of people who worked at home, up 56 percent from 1980 to 3.4 million people in 1990. In 1992 the U.S. Census Bureau reported that of 17.3 million small business in the United States, 49.5 percent were home based. (See Table 2.16.)

In 1985, 16.9 percent of 106.8 million workers surveyed reported that they performed at least some of their employment tasks at home. In 1997 this percentage remained fairly steady, at 17.8 percent. There is no differentiation in these figures between those who work exclusively (or primarily) at home, and those who work elsewhere but also perform work tasks from home. The American Housing Survey of 1999 reported that of 118 million workers surveyed, 3.28 million (2.7 percent) reported "home" as their usual place of work. (See Table 2.16.)

Work at Home As Part of Primary Job

In May 2001 the BLS reported that more than nineteen million persons did some work at home as part of their primary job. While the number of persons reporting they worked at home is approximately the same as it was in 1991, there was a sharp increase in the number of persons who were paid for working at home. In 2001, 3.4 million wage and salary workers—about 2.6 percent of all wage and salary workers—were paid for the work they did at home. In 1991 only 1.9 million wage and salary workers—1.9 percent of the total—were doing work at home for pay.

More than half (52 percent) of those working at home were wage and salary workers who were not paid expressly for their time. About 17.4 percent, however, were wage

and salary workers who were paid for the hours they put in at home. Virtually all the remainder were self-employed workers. (See Table 2.17.)

Of the 3.4 million wage and salary workers doing paid work at home, more than 80 percent were in white-collar occupations. Nearly a million of these workers were in professional specialty occupations, while 880,000 were executives and managers. A large number of paid home workers were in sales and administrative occupations. Almost half (47.1 percent) of those doing paid work at home were in the services industry. More than half a million in manufacturing were paid for work at home. (See Table 2.18.)

The BLS went on to report that about 11.1 million workers were simply "taking work home from the office" (wage and salary workers who were not being officially compensated for the work they did at home). As with those who were paid, persons not paid for the work they did at home were overwhelmingly employed in white-collar occupations. Teachers were especially likely to do unpaid work at home: 2.8 million teachers reported doing so in 1997.

From an industry perspective, half (51.5 percent) of the unpaid home laborers worked in services (6.1 million), followed by manufacturing (1.5 million). About 6.5 million of self-employed persons did some work at home in May 1997, more than half of all the self-employed who

were at work during the survey reference week. More than 4.1 million of the self-employed indicated that they were working in home-based businesses.

Telecommuting

As of 2002 the BLS has figures for workers who are paid for work done at home, but does not currently track numbers specifically for telecommuting workers. However, there is a trend in some work sectors for employees to work one or more days per month at home, during regular work hours, communicating with the office through the Internet, fax, and telephone. The fall 2000 Occupational Outlook Quarterly, published by the BLS, notes certain types of jobs that work well for telecommuting. Service industries have by far the most telecommuters, particularly in the professional specialties. Executive and managerial, sales, and clerical support positions also have telecommuters.

FLEXIBLE SCHEDULES

In May 2001 about 29 percent of full-time wage and salary workers had flexible work schedules that allowed them to vary the time they began or ended work. The increase in flexible work schedules was widespread across demographic groups, occupations, and industries. Whites (30.0 percent) were more likely to work flexible schedules than blacks (21.2 percent) or Hispanics (19.8 percent). (See Table 2.19.) Parents (29.8 percent) were somewhat more likely than workers with no children under eighteen (28.2 percent) to work a flexible schedule.

In 2001 about 45.5 percent of executives, administrators, and managers and 40.7 percent of sales workers were able to vary their work hours. However, fewer than one-quarter of those employed in administrative support roles or as service workers had such flexibility. Operators, fabricators, and laborers, as well as workers in precision production, craft, and repair, were also less likely to have flexible work schedules. (See Table 2.20.)

Among private-sector employees, the proportion of workers with flexible schedules was much higher in service-producing industries (33.3 percent) than in goods-producing industries (23.1 percent). In the public sector, flexible schedules were more common among federal government employees (34.4 percent) than workers in state (29.7 percent) or local (14 percent) government, which includes public elementary and secondary schools. (See Table 2.20.)

SHIFT SCHEDULES

According to the BLS, in May 2001, among full-time wage and salary workers, more than 85 percent were on regular daytime schedules. Many of the alternative schedules that were in effect included evening shifts, employer-arranged irregular schedules, night shifts, and rotating shifts.

Shift work was most common among workers in service-oriented occupations, such as protective service (which includes police, firefighters, and guards) and food service, and among those employed as operators, fabricators, and laborers. It was lowest for managers and professionals and those in administrative support occupations.

WORKER DISPLACEMENT

Displaced workers are persons twenty years and older who lost or left jobs because their plant or company closed or moved, there was insufficient work for them to do, or their position or shift was abolished. According to the BLS's Worker Displacement During the Late 1990s, August 2000, a total of 3.3 million workers were displaced between January 1997 and December 1999 from jobs they had held for at least three years.

Of the nearly four million workers displaced between January 1999 and December 2001, 63.6 percent were reemployed and 21.2 percent were unemployed. Table 2.21 shows the reemployment rate highest for workers twenty to twenty-four, with 68.7 percent working again. The reemployment rates for older workers age fifty-five to sixty-four and sixty-five and older were 50.9 percent and 19.8 percent, respectively. There were 65.2 percent of men working in a new job, compared with 61.6 percent of women. Among those not reemployed at the time of the survey, women were slightly less likely (19.3 percent) than men (22.8 percent) to be unemployed. The proportion of displaced women who left the labor force (19.1 percent) was higher than that of men (12 percent); leaving the workforce means that a worker is no longer actively seeking work or receiving unemployment benefits. (See Table 2.21.) These reemployment figures reveal that significantly more displaced workers in 2001 had difficulty becoming reemployed than did workers surveyed by the BLS between January 1997 and December 1999.

Industry and Occupation

Manufacturing continued to account for the largest proportion of displacements in 2001 (33 percent). Approximately 65.4 percent of these losses occurred among workers

in the durable goods manufacturing industries. These industries tend to be among those most affected by cyclical changes in economic conditions. About 55.7 percent of workers displaced from manufacturing were reemployed at the time of the survey; the reemployment rate in 1999 was nearly 73 percent. In 2001, 70.3 percent of the workers displaced from the services industries were reemployed, as were 62 percent of the workers displaced from construction. (See Table 2.22.)

Managerial and professional specialty employees (30.2 percent of all displaced workers) and technical, sales, and administrative support (28.5 percent) accounted for nearly 59 percent of the displaced workers by occupation. More than two-thirds (68.2 percent) of the managerial and professional specialty group and 67.1 percent of the technical, sales, and administrative support force were employed at the time of the survey, spanning displacement between 1999 and 2001. However, only 49.4 percent of the machine operators, assemblers, and inspectors were working again. In fact 20 percent of this occupation had left the labor force. (See Table 2.23.)

JOB SECURITY

The Society for Human Resource Management (SHRM; 1996 Job Security and Layoffs Survey, Alexandria, VA, August 1996), surveyed its members on the issues of layoffs and job security. About 65 percent of the businesses responding reported that their employees felt very secure, secure, or somewhat secure. Smaller firms were more likely to report secure employees than were larger firms.

Firms that had not had layoffs since 1994 were also more likely to report that their employees felt secure (86 percent) than did firms who had laid off workers since that time (47 percent). Companies planning future layoffs reported that 61 percent of their employees felt very insecure, insecure, or somewhat insecure, while only 9 percent of firms who did not plan layoffs reported such insecurity among their workforce. The SHRM report concluded that the majority of survey respondents thought their employees felt secure in their jobs. About one-third believed their employees felt insecure and agreed that the employees' views were justified.

Almost half of all the responding companies (49 percent) reported that employees felt more insecure since January 1, 1994. Only 14 percent reported that employees felt more secure, while 37 percent reported no change. Again larger firms reported more feelings of insecurity than did smaller companies.

Following the terrorist attacks on New York City and Washington, D.C., on September 11, 2001, the BLS reported significant disruptions to local economies and an increase in layoffs, particularly in the last quarter of that year. (See Table 2.24.) The rate of layoffs tapered off by the first quarter of 2002 to lower than 2001 levels. Beyond the initial effects of layoffs directly related to the tragedies, certain job sectors continue to suffer. The travel industry, particularly the airlines and hotels, have experienced greatly reduced business, due in part to a reluctance among Americans to travel overseas.

A weakening economy in 2001 and 2002 also resulted in numerous mass layoffs (a mass layoff is considered to be a layoff of 50 or more employees). The BLS reported more mass layoffs in May 2002 than in any May since 1995, when the data were first gathered. More than 180,000 workers were laid off in May 2002. After remaining steady throughout the remainder of 2002, layoffs spiked somewhat during the fourth quarter. Steady levels in 2003 were interrupted by a slight increase during April, May, and June. Preliminary data for 2003 suggested that fourth quarter layoffs (October, November, and December) were the lowest for that time of year since 1999.

The accounting scandals involving huge corporations, beginning with Enron in October 2001, and resulting in layoffs, have also shaken the confidence of many in the stability of the American economy and job security. However, due to the corporate scandals' negative impact on investors' confidence in the stock market and the threatened U.S. economy, lawmakers decided to take action. On July 30, 2002, President George W. Bush signed into law a corporate fraud bill consisting of new corporate reporting and disclosure rules, plus increased penalties for fraud.