Worried About Your Job? What Sectors Are at Risk
A recent survey by Rutgers University found that 15 percent expected layoffs at their company over the next 12 months, while fully one-third feared they might be dismissed.
The unemployment rate has been at 6.1 percent for two months now, a four-year high, is expected to climb throughout the rest of 2007 and most of 2008.
Corporate layoffs in the third quarter totaled 287,142, the most since the fourth quarter of 2005, according to Chicago-based outplacement consulting firm Challenger, Gray & Christmas.
"With layoffs mounting and spreading out from just the financial services and housing sectors into other parts of the economy—and as workers see that their own companies reporting poor third quarter results—apprehension about their own jobs is increasing," says John Challenger, the firm's CEO.
So how safe is your job? That depends on multiple factors, including the industry you're in, your employer's financial picture, how much you're valued by your boss and the length of time you've been employed by your company.
There are, however, certain sectors that are more vulnerable than others. Here's a snapshot of some of them.
HOUSING
If your job is even loosely related to real estate, particularly residential, you've no doubt experienced a rough ride since the housing bubble burst. And you can expect more of the same in the months ahead.
Indeed, the housing recession is single-handedly responsible for sending the credit markets into crisis following an unprecedented run up in home prices between 2001 and 2005.
As such, employers engaged in everything from construction to development to mortgage lending to real estate sales are experiencing widespread layoffs.
Construction companies alone have shed 557,000 jobs since its September 2006 peak, with nearly three quarters of that decline occurring since October 2007, the Labor Department reports.
FINANCE
The outlook is equally grim for those employed in the financial services sector, including investment bankers, mortgage brokers, loan processors, stock traders, analysts and bank tellers.
Analysts at Celent, a financial research firm, predicted in April that the U.S. commercial banking industry, which includes most companies that lend or collect deposits, would shed a staggering 200,000 of its 2 million jobs over the next 18 months, due largely to subprime lending pains.
Economic weakness and Wall Street losses, of course, have also led to significant layoffs among many of the nation's leading investment banks.
As of late July, the number of announced job cuts in the financial sector had already topped 100,000 for 2008, on track to easily outpace last year's job cuts of 153,000, Challenger Gray & Christmas reports.
By comparison, financial firms shed roughly 50,000 jobs each year during 2006 and 2005.
LEISURE
You're in the hot seat if you work in entertainment or hospitality, as well, industries that have watched their profit margins shrink as consumers keep a tighter reign on discretionary spending.
Hotel managers and staff, chefs and waitresses, and anyone engaged in the travel services industry, including travel agents, all facing a challenging year ahead.
White collar workers—like managers and clerks—and those in food services are all being increasingly affected, says John Schmitt, senior economist for the Center for Economic and Policy Research.
In July alone, the latest month for which data are available, Challenger Gray & Christmas reports job cuts in the entertainment and leisure industry totaled nearly 11,000 nationwide.
RETAIL
High-end specialty stores, online retailers and big box discounters across the country are also cutting staff—largely targeting store managers—in a bid to reduce costs as the soaring price of gas and groceries forces consumers to pare back spending.
"The retail industry is at risk because consumers are hit so hard with higher mortgages and gas prices, says Challenger. "It's going to be a tough season on retailers. We expect to see more losses in this area later this year."
Since its peak in March 2007, employment in the retail trade is down by 211,000 jobs, the Labor Department reports.
PROFESSIONAL/BUSINESS SERVICES
Business consultants and temporary employees are having a tough time of their own finding work as the economic downturn wears on.
The same is true for accountants and corporate lawyers, many of whom have been forced to lower their hourly rates.
Professional employer organizations, which provide outsourcing of payroll, worker's compensation, human resources and employee benefit administration, are also cutting back.
Between January and July of 2008, the Labor Department notes employment in temporary help services alone declined by 185,000.
Computer systems designers and those engaged in information technology, however, appear to be better positioned.
MANUFACTURING
It may comprise a smaller percentage of the labor force, but the manufacturing sector is still putting up big layoff numbers.
The Labor Department reports manufacturing companies have shed some 383,000 jobs over the last 12 months, largely from companies engaged in transportation equipment, wood products, and textile mills.
In its most recent report of extended mass layoffs, the government also notes the manufacturing industry accounted for 22 percent of private nonfarm extended layoffs (with separations lasting at least 31 days) in the second quarter of 2008, up from 20 percent a year earlier.
AIRLINES
Record fuel prices are taking a heavy toll on profits at most airlines, as well, with many smaller carriers closing down or filing for bankruptcy protection, including Frontier Airlines and ATA Airlines.
Layoffs have been across the board, from pilots, to stewards to baggage handlers, and some analysts predict the pace of job cutting could pick up, particularly among larger U.S. carriers, during the second half of 2008.
So far this year, Challenge Gray & Christmas reports job losses in the airline industry have reached 7,594, though it notes job cuts will likely fall well short of the record level seen in 2001, following Sept. 11, when airline companies laid off nearly 106,000 workers.
AUTO
Though tied to the manufacturing sector, the auto industry is worth calling out.
So far this year, the nation leading automakers have reduced their ranks by nearly 10,000 employees, according to Challenger, Grey & Christmas, with many more being announced by motor vehicle and parts dealers.
"This is a tough area for the economy right now," says Challenger. "People aren't buying cars, particularly sports utility vehicles, and there are a lot of job cuts going on among auto workers and engineers."
NEW HIRES
It doesn't always come down to occupation, of course.
When times get tight in the public and private sector, layoffs are often dictated by seniority.
"Younger workers and people returning to labor force after an extended absence [including mothers who took time off to raise their kids] are much closer to the forces of the labor market," says Schmitt. "Once you're in a job for a length of time, particularly if it's a big corporation, you're a little more insulated. It's the new people who are right there in the gale force winds and don't have as much protection."
LOW-WAGE WORKERS
Those who earn the least in our economy are also more vulnerable to economic pressures regardless of whether they lose their job.
"Anyone in the bottom half or third of the wage distribution really gets affected, not just because they are more likely to be laid off but because rising unemployment puts a lot of pressure on the wages and benefits of those who keep their job," says Schmitt.
Such jobs include cooks, janitors, child-care workers, laborers and freight workers, packers, cafeteria workers, cleaners, cashiers and food preparation workers.
When times were good, from 1996 through 2000, low wage service workers held all the bargaining chips, demanding higher pay and better benefits.
These days, the tables have turned.
"Those who lose their jobs are obviously affected, but those who remain will not be getting pay raises and inflation will just keep ticking along [reducing their real income]," says Schmitt, who predicts employers will start shifting the burden of rising healthcare premiums along to employees. "We're already starting to see that happening."
WOMEN
A recent congressional study found that during the 2001 recession, women not only lost jobs disproportionately, but never saw their employment rates recover to their pre-recession peak.
The report shows that the female employment rate in 2008 is about 6 percentage points below where it should be today had the trend line between 1948 and 2000 continued.
"Because women are disproportionately represented in state and local government services, their job losses are likely to grow in the latter part of the recession as state and local governments are forced to implement cut-backs in spending in areas that women are disproportionately employed, such as education and health care," an executive summary of the study notes.
WHAT TO DO?
Of course, just because you're in a vulnerable sector, doesn't mean you're going to lose your job.
The best way to insulate your job against recession is to ensure your boss is well aware of your accomplishments and the expertise you bring to the table.
If the layoff writing is on the wall, however, it's time to get your resume up to date.
"Recognize that you are a free agent," says Challenger. "Sometimes it's better to make a proactive move than a reactive search after you've been laid off. If you feel your risk is going up at your current company, you might consider another position."
(This story has been updated since its original publish date of Sept. 4.)
Source : © 2008 CNBC.com
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