Dark Days: NJ recession researchers see worker-woe ‘disaster’

There’s a cold, steady rain outside as I sit down to speak with Cliff Zukin and Carl Van Horn on a recent morning, and it feels appropriate. As professors on the staff of the John J. Heldrich Center for Workforce Development at Rutgers, the pair have been studying the effects of the recession on American workers through a series of extensive surveys.

Their findings: It’s bleak out there, and the forecast isn’t much better.

The titles of the reports they’ve been issuing tell the story: “The Anguish of Unemployment,” “No End in Sight,” “American Workers Assess an Economic Disaster.”

ANGEL CHEVRESTT

TAKING NUMBERS: Rutgers professors Carl Van Horn (left) and Cliff Zukin are studying the effects of the recession on American workers.

The surveys are part of a long-running series of opinion polls commissioned by the Heldrich Center, which were designed to “give a voice to American workers” and funnel that info to policymakers, says Van Horn, the center’s founding director and an oft-consulted expert on labor and the economy.

What those voices are saying right now is that they’re worried — about their employment prospects, about where the economy is headed and about the government’s ability to steer it.

What’s more, people are worried that this is more than just a momentary stumble in America’s forward march. Instead, a majority think we’re undergoing a “fundamental and lasting change,” and are grappling with their own lowered expectations.

Van Horn and Zukin, a fellow at the center whose expertise is in public opinion research, sat down with @work in Van Horn’s office in downtown New Brunswick, NJ, to discuss why this recession is different from previous ones, and why workers who think the ground is shifting may be right.

How would you describe the picture that’s emerging from your research?

Zukin: There’s a lot of pain out there, and a lot of folks who are at their wits’ end. Many of them have never been unemployed before, and they don’t know what to do. What they’re experiencing is going to change the nature of work, it’s going to change the economic order. I think the relationship between employer and employee is going to be very different from here on out.

One striking thing in your figures is the extent to which those who still have jobs say they’re suffering.

Van Horn: I describe the workforce as fitting in two buckets. One is the group that’s in agony, and that’s the unemployed, and the other group is in a state of anxiety, because they’re the employed thinking they might be unemployed. Besides the personal, family and societal stress that implies, it’s also a huge drag on recovery, because people in a state of anxiety aren’t willing to spend.

Among people with jobs, is the anxiety just about, “I could be next,” or is it something larger?

Van Horn: One of the things we were struck by in the last survey was that three out of four Americans has had a direct experience with this recession, meaning that they lost a job, or someone in their family or a close friend did. You hear about Joe, who’s a good stand-up guy who had this job for 20 years and did nothing wrong, and all of a sudden he’s out on his ass. So this is anything but abstract.

Zukin: And there’s the pessimism that goes with it. We have two-thirds who say next year is going to be the same; another 18 percent said it’s going to get worse. It’s the new normal to get used to.

ANGEL CHEVRESTT

TAKING NUMBERS: Rutgers professors Carl Van Horn (left) and Cliff Zukin are studying the effects of the recession on American workers.

How is that distinct from what you’d have gotten if you asked those questions during any other recession? Is this one different?

Van Horn: Yes, I think it is in a couple of ways. First, it’s longer and deeper than other recessions. Second, every sector of the economy with the exception of health care — devastated. Going back to the ’82 period, it was more of a manufacturing thing, now it’s across the board. No. 3 is the financial-sector crisis and the housing-market collapse that hit at the same time, so everybody is poorer by trillions of dollars than they were before, from Donald Trump on down.

Lastly, the politics. There’s no restraint anymore. In the past there would have been differences of opinion, but you’d also see people coming together in a crisis. That’s harder to predict now, and in fact I’m pessimistic about it. It’s striking what a disaster this is at such a gut level, without solutions.

To what extent would you say we’re seeing not just a recession, but a fundamental shift in the economy?

Van Horn: It’s hard to separate the cyclical versus the structural impacts, but I think the two are intertwined in this case. A structural issue, of course, is globalization and competition from other countries, which is killing the manufacturing sector. At the same time, we have a drop in demand for manufactured products. There are fewer people buying cars, and fewer cars being made in the US for structural reasons, so both are working against American workers.

Also, we have a kind of fire sale process going on in industry consolidation. One company gobbles up another, and people lose jobs.

Zukin: For older workers, this is revolutionary. The ones having the hardest time finding jobs are people over 50, 55, who’ve worked pretty much all their lives. When jobs do start coming back in what they used to do, they’re not going to come back at their salaries. And younger people are going to be hired first. So there’s this large group of folks who are trying to figure out what to do. Some are trying to be consultants. Some are retiring before they wanted to retire and living on their benefits.

Van Horn: For a lot of these folks, there’s no time to make up what they’re losing. So their experience is downwardly mobile, whereas they’d expected either upward mobility or stability.

If someone loses a corporate job and takes a service job at half the pay, statistically they’re employed, but obviously there’s been a big change there. How much of that is going on?

Van Horn: Older workers on average lose about 20 percent in wages and salaries if they get re-employed. In our work, of the very small percentage [of laid-off workers] who found another job, almost all of them took a significant pay cut.

There’s a trend of laid-off workers getting offered their old jobs back — but on a contract basis, as part of a contingent workforce.

Van Horn: That’s one of the structural changes we’re talking about. I heard one employer say, “We used to think of people we hired as like adopting a member of the family. Now we look at them as someone who’s just visiting for the day.”

It feels a bit like we’re talking about something being over. Is that the sense you get from what you’re hearing?

Zukin: That’s something we’ll know in 10 years when we look back. The American system is generally an incremental system — you don’t have large changes absent a crisis. So when you do have a crisis, and by any definition this fits, you have the opportunity to settle into a new normal. Balls get thrown in the air and they land differently. After 9/11, there was a period of a few years where things were up in the air, but things pretty much landed as they started. I don’t think we know about this one yet.

From Chris Erikson | New York Post | Oct 11, 2010 | chris.erikson@nypost.com