More Layoffs And More Jobs
January 13, 1999
It seems like a paradox. As American companies strive for greater productivity, they are laying off more workers. Yet job creation is strong.
- Layoffs announced in 1998 were the highest so far this decade - nearly 678,000 employees.
- Economists predict the jobless rate will near 5 percent this year, which is historically low -- a figure which is even more impressive when one considers that the U.S. labor force is expected to grow by 1 percent in 1999.
- Jobs are shifting from manufacturing to the services sector -- a trend confirmed by the fact that factory employment has fallen by 272,000 since March 1998, while the services sector added some 1.4 million new jobs last year.
- Most companies eliminating workers are also hiring new ones -- witness the fact that only 14 percent of large firms are laying off without hiring new employees, according to the Employment Policy Foundation.
The situation may sound contradictory, but economists explain ours is a dynamic work environment. As of last month, 43.3 percent of those who found themselves unemployed secured a new job in less than five weeks. And another 30.5 percent were only off payrolls between five and 14 weeks. A mere 13.7 percent were out of work for 27 weeks or more.
Moreover, the share of workers doing well or better in new jobs is 22 percent higher than the share doing less well, according to the Bureau of Labor Statistics.
Source: Jim Christie, "Don't Let Those Big Layoffs Scare You," Investor's Business Daily, January 13, 1999.
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