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Regular-article-logo Sunday, 05 May 2024

Hard times

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With A Recovery Nowhere In Sight, Americans Fear More Job Losses, Says Catherine Rampell NEW YORK TIMES NEWS SRVICE Published 27.09.11, 12:00 AM

Not again! That is what many Americans fearful about their jobs feel as the economy falters.

“I don’t have any more savings or anything like that,” said Terrance Myricks, 21, who got the axe for the second time in less than three years on September 1. “I’ll probably have to rely on unemployment benefits which I’d really rather not do. And that’s assuming I can even get it.”

Job growth halted entirely in the nation last month. And as Europe’s debt crisis acts as a drag on global growth and Washington debates another jobs bill, the possibility of a second recession is increasing in the US along with the prospects of corresponding layoffs. Myricks’ tale of pain the second time around, economists fear, could become all too familiar.

With headlines like the 30,000 layoffs planned at Bank of America and the US postal service asking Congress to cut 1,20,000 workers, it is perhaps not surprising that workers’ concerns about their job security are near their Great Recession peak, according to a recent Gallup survey. At least one anecdotal study found that layoff announcements were greater in August than a year earlier.

The last workers in the door are often the first out of the door. That could make the Americans who have already depleted their support networks and unemployment benefits most vulnerable to layoffs.

“Employers are likely to target the employees who are more junior, as they usually do,” said Daniel S. Hamermesh, an economics professor at the University of Texas, Austin. “If you’ve already exhausted your benefits for that benefit year — and Congress has said they want to shorten the duration of benefits — you’re up the creek. That’s one of the most severe worries about all this.”

Right before Labour Day, Myricks, of La Palma, California, near Los Angeles, lost his position as a factory machine operator, a job hard-won after a long spell without work.

That painful loss was an echo of July 2009, when a supermarket eliminated his position as an assistant manager. Myricks joined the 28 per cent of teenage men in the workforce — 39.7 per cent of black teenage men — who were idle and looking for a job then. He spent more than a year looking for work, and moved into a cheaper home with his wife, Briana, 20, to help make ends meet. After a few months delivering pizzas part time for Pizza Hut, he finally secured a full-time job in April 2010 at a box factory where his brother is an assistant manager.

The young worker felt lucky to find a job that paid $14.34 an hour (plus benefits), enough to pay the bills and help support his father, who is battling leukaemia.

One reason he took the job was that so little else was available in California and across the country. There are still more than four workers for every job opening, according to US Department of Labor data, and in some areas the competition is even stiffer.

“It used to be that you’d be compared against a few resumes, but now you’re competing with a thousand applicants for that one job,” said Teresa Cannady, 53, of Fountain Inn, South Carolina. She lost her job as an office manager for an insurance agency in May 2009, and spent 15 months looking for work. Then in September 2010, when the economy seemed to be turning, her old boss asked her to come back — only to lay her off again on September 9.

During Myricks’ first month at Georgia-Pacific, he worked 12 hours a day, seven days a week. Then he pulled back to five and six-day weeks. The work, he said, was not only dangerous, but exhausting: He spent his days lifting 50 to 100-pound wooden slabs with razors that cut shapes into cardboard, as well as giant printing plates used to stamp the cardboard.

An old back injury flared up, and he developed sharp pains in his shoulder and ankles. He began looking for other work but was unsuccessful. Over the summer his doctor told him to cut back on his hours. Soon after, the company gave him no choice. When customer orders started to drop off, Georgia-Pacific began announcing furlough days in August.

Other companies appear to be cutting back as well.

The average workweek has not recovered to the level before the last recession, and in the last four months it has either been flat or fallen. The decline, which suggests employers do not have enough work for their existing employees, has led economists to worry that broader layoffs may be next.

At Myricks’ factory, 26 employees out of 187 were let go at the beginning of the month. Layoffs were aimed at workers with the least seniority — including Myricks.

Such practices are common even in companies that are not unionised, economists say.

“If you’ve invested 10 years in a worker, you’re going to be reluctant to lay him off,” said Robert Shimer, an economics professor at the University of Chicago. “But if there’s a new guy who hasn’t been there that long, and you haven’t had as much time to invest in him, it’s less costly to let him go.”

Though he was told that he would be recalled in about five weeks, Myricks is doubtful.

Because he has been earning wages for the last year, Myricks is receiving unemployment benefits nearly equal to his pay at Georgia-Pacific. The money could be a lifeline for the young couple, because his wife, Briana, lost her job as a social media coordinator in January. Their only other income comes from the freelance blog posts she writes for personal finance sites, at $20 a post.

“It’s really competitive,” she said. “Some of these sites can find somebody in the Philippines who may be willing to work for a third of what I may be asking for.”

The road ahead for both of them could be steep. Many employers prefer - or even require — job applicants to already be employed. A second bout of unemployment could be a bigger stigma.

“Everyone knows that in a bad recession like this there’s a lot of unemployment,” said Harry J. Holzer, an economist at Georgetown University and the Urban Institute. “You’d think employers would take that into consideration, but they don’t always.”

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