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Laid-Off Workers Often Face Pay Cut in Replacement Jobs

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WASHINGTON – The U.S. economic recovery hasn’t felt much like one even for people who managed to find new jobs after being laid off. Most of them have had to settle for less pay.

Only 56 percent of Americans laid off from January 2009 through December 2011 had found jobs by the start of this year, the Labor Department said Friday. More than half of them took jobs with lower pay. One-third took pay cuts of 20 percent or more.

The figures would be even lower if people who could find only part-time jobs were included in the total.

The report provides an illustration of the job market’s persistent weakness well after the Great Recession officially ended in June 2009. It also documents that while the economy has added nearly 3 million jobs since the recovery began, many pay less than those that were lost.

Laid-off workers always have a harder time finding new jobs than do people who quit. But since the government began tracking such data in 1984, people who lost jobs in a recovery haven’t had it as hard as they did in the one that began three years ago.

And the pay cuts in their new jobs usually aren’t so deep.

For example, in 2003-2005, a period that included a slow recovery, nearly 70 percent of those who were laid off found jobs. More than half who found full-time work in that time did so at equal or higher pay.

The government compiles data on laid-off workers every two years. The report covers only people who had worked at least three years in the same job before being laid off.

About 6.1 million people with at least three years on the job were laid off in the three years ending in 2011, the government’s report said. That’s down from 6.9 million in the previous report, which covered the 2007-2009 period. But it’s still the second-highest total since 1984.

Although the proportion of laid-off workers finding jobs has improved since the 2007-2009 period, “by no means are they back to a normal level for a recovery,” said Henry Farber, an economics professor at Princeton University.
— This article appeared on page B1 of the Albuquerque Journal

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