Workers Out of Work
In the three quarters since September 11, average job search times expanded to 3.5 months, matching the highest annual average in 17 years of tracking. Prior to September, the average job search took 2.5 months, according to John A. Challenger, chief executive officer of the firm.
Meanwhile, the percentage of job seekers winning equivalent or better salaries in the second quarter of 2002 fell to a record low of 75 percent. This is down from a pre-September 11 level of 89 percent and the first time this figure has dropped below 80 percent since Challenger began tracking in 1986.
One could argue the barrage of corporate scandal and subsequent stock market volatility wouldn’t have had as much of an impact on the economy had they not been preceded by September 11. However, the terrorist attacks created an air of uncertainty that undoubtedly has influenced corporate decision making over the last year, noted Challenger.
Resulting from and adding to the atmosphere of uncertainty has been a post-September 11 increase in job-cut announcements. Planned job cuts announced by U.S. employers increased 23 percent, going from 1,345,020 in the 11 months before September 2001 to 1,650,013 in the 11 months since September 11.
While not all of these cuts can be directly attributed to September 11, a large percentage of the increase was due to cuts in the airline industry, as well as hospitality and retail sectors, which suffered greatly after the terrorist attacks, said Challenger.
More Risk Being Taken
Employers aren’t the only ones who were impacted by the terrorist attacks. September 11 was an attack on America at work. As a result, American workers—both employed and unemployed—have altered their attitudes, concerns, and priorities to such a degree that it may effect workplace trends for years to come.
Evidence of this shift can be found in Challenger job search statistics showing a greater willingness among job seekers to take risks they may not have considered before September 11. For example:
- The percentage of job seekers switching industries in their new positions increased 15 percentage points, from 39 percent before September 11 to 54 percent since the attacks.
- Start-ups among jobless managers and executives increased 43 percent after several years of decline.
- Over the last three quarters, 11 percent of jobless workers started their own business, up from 7 percent in the previous three quarters.
- Start-ups by those under 40 increased 105 percent. Prior to September 11, only 16 percent of those starting businesses were under 40. Since September 11, that figure surged to 33 percent.
Several factors may be helping to spur the increase in start-up businesses, including a growing distrust of corporate employers, the tight job market, and more dual-income households. However, one can’t dismiss the emotional response to the September 11 attacks, which has led to a renewed “life is too short” mentality, said Challenger.
Before September 11, many younger, would-be entrepreneurs might have postponed their dreams until they were older, had more experience, etc. Now, we’re seeing this younger generation proceed with their plans, throwing caution to the wind.
Priorities Changing
Challenger suggested the same mentality is likely behind the increase in industry switching. People aren’t simply changing industries because of economic data showing one industry is doing better than another. If that were the case, we would have seen a spike in industry switching before September 11.
Since the September 11 attacks, many job seekers have shifted toward careers and industries that provide value to society and a sense of meaning, as well as a paycheck. Industries that had difficulty competing for workers in recent years based on salary and career prospects are now poised to benefit from changes in an economy adapting to a long-term war on terrorism and a shift in career priorities, he said.
People may also be switching industries to find greater flexibility in balancing their work and family lives. September 11 reminded many American workers about the importance of friends and family over career. As a result, some are even willing to take lower salaries in exchange for flexibility and/or the chance to pursue a career that makes a contribution to society, Challenger observed.
This change was reflected in a post-September 11 survey by American Demographics magazine in which 77 percent of those polled said spending time with family means more to them now than before the events of September 11. Only 19 percent said making a lot of money is more important. IBI