by Lila Shapiro
From Huffington Post, April 19, 2011
NEW YORK -- Susan Goscewski spent 30 years climbing the professional ladder. It took little over two years of unemployment for her to tumble back down.
Cast out of the workforce in December 2008 following the financial meltdown, Goscewski, 59, never expected to go for so long without a job. She had three decades of steady employment history and an MBA from Carnegie Mellon, one of America's top business schools. Her last position, as director of development for a nonprofit, paid $90,000 a year.
Last month, she finally found a new job: as a classroom tutor at a bookkeeping training center, working 20 hours a week for $15 per hour. Even if she works 50 of 52 weeks at that rate, she'll make just one-sixth of her 2008 salary.
"In this field, in this particular organization, I will never see what I've made before," Goscewski said quietly. "And I -- have I accepted that? I'm quite angry about it."
The U.S. economy added 216,000 new jobs in March, according to the federal Bureau of Labor Statistics, appearing to bolster claims that the labor market recovery is "gaining traction". But Goscewski and many others lucky enough to find work, any work, still find their old standards of living painfully out of reach.
"It makes me feel good that people are giving me work today. It means they trust me, they believe in me," Goscewski said. "But it still seems like a demotion, like I'm back in kindergarten again. What am I doing? I'm really starting all over again."
While the recovery of the labor market and the broader U.S. economy depend critically on job growth, equally important is the quality of those jobs. During the economic downturn, 40 percent of the jobs lost came from high-wage industries -- yet high-wage industries accounted for only 14 percent of the new positions created in the first year of post-downturn job growth, according to a report released in February by the National Employment Law Project.
Other lower-paying sectors in which employment has rebounded since the downturn include the retail and hospitality and leisure sectors. Manufacturing is one of the bright spots, but industrywide employment is still well below pre-recession levels.
Meanwhile, corporate profits continue to grow at a breakneck pace. Expectations for first-quarter profit growth are hovering at roughly 40 percent.
"We have an awful problem," said Lawrence Mishel, the president of the Economic Policy Institute. "We have a system whereby corporations have been able to achieve a level of productivity they had before the recession even with 8.8 percent unemployment. They managed to achieve prosperity without anyone else having any prosperity. To me, that's not an economy that's working well."
'I Still Feel Like I'm Really On The Edge''
After she lost her job in 2008, Goscewski struggled to find her bearings. In the spring of 2009, she joined a between-jobs support group.
The group spent an hour a week sitting on folding chairs in the choir room of St. Bart's Episcopal Church on Manhattan's Upper West Side. Rather than focusing on job-search fundamentals like resume overhauls and interview techniques, members primarily shared their emotional struggles and their means of working through those challenges.
When first unemployed, Goscewski held a relatively strong hand. She had been gainfully employed for decades and saved responsibly, never married and had no children to support. She was able to remain in the rent-controlled Manhattan apartment that had been her home since the late 1970s.
Still, by her latest calculations, her savings wouldn't carry her for much more than another year.
Morale within the support group sometimes seemed to sink further as the economy began to pick up, she said, when members looked around and saw new work that they remained unable to get.
Goscewski began the difficult work of redefining herself. She networked and sent out a flurry of applications with no success. In the fall of 2009, she started taking courses in bookkeeping. And while she didn't find it as challenging as her previous work, and knew the compensation could never equal her previous job, she forged ahead.
"I thought to myself, 'I never want to be in the situation where I can be let go from a job again,'" she said quietly. "And bookkeeping offers an opportunity to do work as long as you want. Is it something that I'm thrilled to do? It's interesting work, but it's not the most exciting work."
Goscewski dresses simply and wears a pair of wire glasses. Sometimes, she speaks in the pragmatic tones of a businesswoman back on her feet. But at other times she sounds less confident, like someone whose life is still bottoming out. Although she has found new work, she has no immediate plans to leave the unemployment support group. Like many who have gotten jobs back, but not their old careers, she feels her ordeal is not over.
"I still feel like I'm really on the edge," Goscewski said, sitting in a Manhattan tea shop after a morning working at the bookkeeping center. "I've really taken a big step backward and where am I going to go? Maybe I'll end up being not as far along as some of the students that I'm tutoring."
Since 2008, Goscewski has altered the way she lives in the city, cutting back on her subscriptions to cultural institutions in New York and other luxury items. Her perception of herself has also changed, she said, as her hours with the support group have put her in close contact with "a whole new group of people."
"It's really seeing things from the street, as opposed to from the 21st floor of a skyscraper. And I find I'm not entirely opposed to it, because I find the street--" Goscewski paused. "I think I'm shifting values over time."
When assessing the last two-plus years of her life, Goscewski sometimes blames herself for the massive cut in pay she's taken. She cites her age, her course of study at business school, her mid-1980s transition from the corporate world to nonprofit work.
But economists point to the numbers: more than 8.84 million private sector jobs were lost during the Great Recession. She is among the millions caught up in that storm and forced to settle for less during the brutally slow recovery.
For now, Goscewski said, she still needs the stability her support group provides, even if the sessions can be difficult.
"I went and told people how I felt, and that was not always great. I do think that some people over time left the group because they couldn't deal with the truth of the way people felt. It was too burdensome," she said. "But I always felt, if i didn't have an opportunity to say it there, where was I going to let it out?"
Only one thing might help her grow beyond a need for the group, she said: full-time work.
An Uneven Recovery And Stagnant Wages
The economy has been adding jobs each month for more than a year, but according to the most recent federal data, there are still more than four unemployed workers for every job opening. When considering the spiderweb of factors which forces workers to trade down in the job market, economists point to this supply issue first.
But a unique feature of this recession and recovery, as the NELP report highlights, has been the disparity between the wage level of jobs created versus jobs lost. The growth after the 2001 recession, as the report notes, was both faster -- the first year of recovery created half the number of jobs lost in that recession -- and more evenly distributed among low- and high-wage industries.
For workers who spent their lives in an industry that is now decimated, it can be difficult to know where to turn next.
Shirley Knudsen, 54, worked in the construction and landscaping industry for 30-odd years in Phoenix, Ariz. She last held a job in 2009, when she was earning $34,000 annually as an estimator for a construction contractor.
"Construction is just dead. So I was laid off and I haven't been able to find anything since. Now I work for a warehouse at 12 bucks an hour. It's not what I want to do," Knudsen said. "The reality is you can apply and apply and apply, but it's hard to get an interview. People just don't call you back."
Knudsen, who is divorced and has one adult son, has an associate's degree in ornamental horticulture as well as decades of experience. She said she would love to work in landscaping or at a nursery but has not been able to find such a job.
Since 2009, she has made a series of unsuccessful attempts to start a new life. She took classes in real estate intending to be a property manager, but that has not yet developed into a job; she took computer classes at the local community college, and applied for hundreds of jobs. Meantime, she works 10 physically grueling hours a day at the warehouse worrying about her savings, which she said are now almost nonexistent.
Annette Bernhardt, one of the authors of the NELP report and the group's policy co-director, stressed that it's too early in the recovery to make broad pronouncements about long-term changes in the growth of the kind of lower-wage jobs that keep Knudsen and others living paycheck to paycheck. She said that growing number of workers will likely need a stronger regulatory hand, however, to guard against minimum-wage violations, the refusal of contractually-obligated overtime pay and other employment offenses commonly referred to as "wage theft."
"For workers right now trying to navigate the labor market, their job opportunities have deteriorated relative to before the recession," Bernhardt said. "Given the numbers of workers that are faced with having to take low-wage jobs, I think there's clearly an argument over the coming years to focus on strengthening the wage floor by increasing the minimum wage and fighting the problem of wage theft."
That would require fighting decades worth of stagnation on those fronts, though. In February, The Bureau of Labor Statistics released a disheartening chart illustrating the widening gap between growth of corporate productivity and worker compensation. The relationship between productivity and worker compensation illuminates the extent to which the employed benefit from economic growth. Over the decade ending in 2009, productivity growth averaged 2.5 percent while growth in real compensation averaged just 1.1 percent.
"The reality is that a number of people are experiencing downward mobility," said van Horn, the Rutgers labor economist. "Depending on where they started on the economic ladder, that downward mobility can be somewhere from inconvenient to actually pushing them into poverty."
"When it comes to wages, the basic story of recent decades is redolent of Scrooge," Princeton economist Alan Blinder wrote in a December editorial for the Wall Street Journal. "Real average hourly earnings (excluding fringe benefits) now stand roughly at 1974 levels. Yes, that's right, no real increase in over 35 years. That is an astounding, dismaying and profoundly ahistorical development."
Bernhardt, too, sees the problem of wage stagnation in the American economy as a decades-long trend that the recent downturn severely exacerbated."Our economy was in trouble before the recession -- we were sitting at the end of 30 years of growing inequality," Bernhardt said. "So we were already at a point where there was a real challenge for many workers in the U.S. in terms of finding living-wage jobs and sustainable careers. The Great Recession clearly did not reverse that trend. If anything, it's accelerated it."
The combination of a shortage of higher-wage jobs and a loose labor market can be devastating for workers. Labor economists point to two primary solutions: dramatically accelerated job growth or successful union organizing. Neither appear to be forthcoming.
In the meantime, experts offer a wide range of predictions as to when the unemployment rate will return to its pre-recession level. Federal Reserve Chairman Ben Bernanke estimates it will take four to five years; EPI says seven years; some economists say it will never happen. A February report from the Federal Reserve Bank of San Francisco concluded that the new "normal" unemployment rate will be almost two percentage points higher than the pre-recession rate.
"Obviously individuals can always do well. You're able to get a good education, you're able to get in the right place at the right time, you're able to do well. But for the workforce as a whole, that story doesn't work," said Dean Baker, the co-director of the Center for Economic and Policy Research. "One could envision a huge wave of worker militancy. The big year of unionization was 1937, when the unemployment rate was around 14 percent. But boy, holding out for that -- these aren't frequent events in the world."
A 2003 EPI study documents how strong unionization raises wages and benefits for union and nonunions workers. But the past decades have seen a massive decline in unionization in the public and private sector -- in 2010, only 11.9 percent of the workforce was unionized.
"I don't think there's any disagreement about the question of whether [growth of] unions contributed to increasing wages. Everyone agrees it did. But some people like that and some people don't. " van Horn said. "And this kind of downward mobility has ripple effects on everybody. To use the environmental phrase that I like, everybody lives downstream from someone. So if your neighbor loses her job and has to foreclose, your house is worth less money."
Still Utilizing Skills, Just Not Getting Paid For Them
Lalana Island, 45, worked as an executive assistant for more than 20 years. She joined the workforce right out of high school and was earning $48,000 a year before the company she was working for closed its doors in 2008.
A contracting company helped her find a new executive assistant position, but she lost that during a company merger in 2009. The contracting company then suggested she look into temporary work, which pays significantly less, with an hourly wage ranging from $11 to $18 an hour, and no benefits. She applied for hundreds of jobs -- temporary and full-time -- but was out of work for a year. With her son on his way to college, and her husband, an electrical engineer, out of work, Island began to worry. Although their mortgage was paid off, the family began sinking into debt.
"It's depressing. It is extremely depressing. Especially when you leave interviews, and you just know you've got this one. And then you don't, again," Island said. "You definitely take a look at all the extras that you have in your life. You start finding that instead of needing 150 cable channels, you only need the package that gives the basic. You don't drive as much. You clip coupons. You worry."
As the months progressed, the contracting company suggested Island dumb down her resume.
"These companies don't seem to understand that I'm just going to do what I have to do to bring money into the house," she said.
Since the new year, Island has found temporary work as a receptionist, with the help of the contracting company and a significantly reduced resume. She misses the more engaging work she did as an executive administrative assistant, and feels that she has more to offer -- that her career has amounted to more -- than answering phones.
Island said she has thought about going back to school but can't afford to. With her husband out of work, she must focus all of her energy on bringing home a paycheck.
"When I get into a place and they find that I'm not just a receptionist, that I am an administrative assistant, I have found that people will take advantage of that while I'm there. And they'll say, can you do this?" Island recounted quietly. "So I'm still utilizing the skills, I'm just not being paid for them."
