NCPA - National Center for Policy Analysis

Recession Hits Entry-Level Jobs

October 8, 2001

Welfare reforms initiated in 1996 achieved astonishing successes. Vast numbers of Americans caught in generations of subsidized poverty found jobs in the booming economy of the late 1990s and moved into the nation's work force.

Although the U.S. economy started faltering many months before the terrorist attacks of Sept. 11, those acts have led to a sharp deterioration in the labor market in recent weeks, experts report.

  • The prior boom times were especially beneficial for former welfare recipients, high-school dropouts, racial minorities and immigrants eager to find jobs.
  • Now the food service and travel and tourism industries -- the largest source of entry-level jobs -- have been especially hard hit and layoffs are counted in the hundreds of thousands.
  • An official of the Hotel Employees and Restaurant Employees International Union estimates that between one-third and one-half of that union's 300,000 members have been laid off during the past three weeks -- with countless more put on reduced hours.
  • The Labor Department reports that payrolls in general have fallen by 800,000 since January -- and experts predict that unemployment will climb from the present 4.9 percent to 6 percent.

Labor analysts haven't completely abandoned optimism, however. They say that so long as the unemployment rate doesn't rise too much for too long, some progress from the 1990s will endure. Many of the people who joined the labor force over the past five years but are now losing jobs will be better prepared to find new ones in the future.

Source: Jacob M. Schlesinger and Russell Gold, "High-Employment Era Seems Over in Wake of Terrorist Attacks," Wall Street Journal, October 8, 2001.

For text (WSJ subscribers)


Browse more articles on Economic Issues