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Whose Recession Is It Anyway? And Does It Matter?

May 19th, 2003 | Paula Brantner

The headline caught my eye: Deciding Who Hurts Most in a Slump. The recent New York Times article, by labor reporter Steven Greenhouse, asks the question whether the current recession is more of a white-collar slump or a blue-collar slump. While there are certainly arguments to be made in favor of both positions, the piece ultimately fails to draw a firm conclusion either way.

The article begins by discussing some of the more unexpected layoffs when compared to previous recessions: “Goldman Sachs dismisses 2,900 workers in 2002 alone, while J.P. Morgan Chase lays off 2,000. Dozens of Silicon Alley start-ups go under while $300,000-a-year tech whizzes are laid off and become sales clerks at apparel shops to support their families.” The last statement refers to the story of Jeff Einstein, profiled in the New York Times Magazine article, Commute to Nowhere, who becomes a Gap salesman as a last resort after being unable to find comparable employment to his position as an executive vice president paying $300,000 a year. “Commute to Nowhere” and other articles like it tell the story of a recession that has hit white-collar workers especially hard.

Dr. Irwin Kellner, an economics professor at Hofstra University, echoes the belief that this recession is primarily a white-collar one. He says, “[i]t’s true that manufacturers have cut their payroll 39 months in a row, but with the three-and-a-half-year bear market, there have been massive layoffs in New York of brokers, bankers, analysts and other people associated with Wall Street. And of course there’s been the dot.com implosion, which has hit Silicon Alley.” Kellner looked at nationwide numbers based on employer payroll records to conclude that managerial and professional specialty workers represent 17 percent of the unemployed, nearly double the 9.5 percent level during the 1990-91 recession and up from 13 percent three years ago, before the current slump started.

Other economists disagree, believing that the unemployment of white-collar workers is receiving a disproportionate amount of attention, based on statistics showing that blue-collar workers remain unemployed in a percentage that is proportionately higher than their percentage in the workforce at large. In an analysis conducted by the Community Service Society of New York City, researchers found that 78 percent of New York City’s unemployed are workers in manufacturing, construction, service, clerical and sales jobs, while 22 percent of the unemployed are white-collar workers, defined as executive, managerial, professional or technical. (See A Portrait of Inequality: Unemployment and Joblessness in New York City, 2002.) Study author Mark Levitan found that “blue-collar workers are pretty strongly over-represented among the unemployed and that white-collar workers are pretty much underrepresented,” based on statistics which indicate that executives and managers make up 14.5 percent of the city’s labor force but just 9 percent of the unemployed, while professional and technical workers comprise 20 percent of the work force, but just 13 percent of the unemployed. In contrast, blue-collar workers, defined as those in manufacturing, construction and repair work, represent 20 percent of the labor force but 30 percent of the unemployed.

Why does it matter whether it is a blue-collar recession or a white-collar position? Some theories offered by Greenhouse:

Some advocates have seized on the notion of a blue-collar slump with the aim of persuading policymakers to give more aid to the lower strata of city workers. But other advocates have embraced the idea of a white-collar slump, believing that politicians will grow more concerned knowing that affluent workers have been hit hard.

And some refuse to make that judgment call at all: James P. Brown, who analyzes the New York City’s economy for the State Department of Labor, argued that the important issue was not whether the downturn was blue-collar or white-collar, but that the city was in a protracted slump, affecting everyone: “We have unemployment rising,” he said. “We have a lot of layoffs in the financial sector, white-collar and clerical support. That leads to less office buildings being built, which hits blue-collar workers because there is less construction going on.” James Parrott, chief economist for the Fiscal Policy Institute, a union-backed research group, said both sides are right: “It’s both a white-collar recession and a blue-collar recession. It’s a severe recession that’s touched virtually every occupational and industrial sector.”

Another dichotomy not even discussed by Greenhouse which is nonetheless present, is whether male or female workers are most bearing the brunt of this recession. In Commute to Nowhere, the author focuses on the “special” impact of the recession on males.

By the numbers, women have been hit as hard as men, but white-collar men tend to experience unemployment differently, organizational psychologists say. For most women, survival trumps ego; they simply adapt and find some job. For men, grappling with joblessness inevitably entails surrendering an idea of who they are — or who others thought they were.

However, in a piece published in The Nation, author Katha Politt asks “How do we know the economy is in bad shape? Unemployed white male hotshots are back in the news.” She goes on to observe, in response to the previous Commute to Nowhere quote:

It’s all about masculinity, Mahler informs us. Women have been as likely to lose their jobs as men in the current climate, but “for most women, survival trumps ego; they simply adapt and find some job.” I like that “simply.” No cover story there.

But wait. Those $10-an-hour jobs, the ones we’re supposed to pity the men for having lowered their masculine dignity to take, look kind of familiar, don’t they? They’re the “good jobs” women on welfare are encouraged to get, the ones that are supposed to transform them from mooching layabouts to respectable, economically self-sufficient, upright and orderly citizens….

What happened to all those homilies about personal responsibility and the dignity of a job–any job–that were trotted out to justify forcing welfare mothers to work off their checks at subminimum wage by cleaning toilets in public parks or scraping chewing gum off subway platforms? Somehow, those sermons don’t apply to Mahler’s guys, but only to those single mothers of small children who get up at dawn for long bus rides to jobs as waitresses or hotel maids or fast-food workers–jobs that one calls “menial” at the risk of being tarred as an elitist snob by welfare-reform enthusiasts…

Pollitt’s point is very well taken–a double standard does appear to be hard at work here.

It also appears that women may have even fewer resources to withstand unemployment. While the men “commuting to nowhere” have 401(k)s and savings accounts to exhaust, severance payments which initially provided some cushion, and working spouses providing some familial support, a new report shows that “the rising jobless rate is often harder on women because their tendency to earn less and work part-time so they can care for family members disqualifies them from unemployment benefits in many states.” (See Women’s E-News article.) In the study Between a Rock and a Hard Place: Confronting the Failure of State Unemployment Insurance Systems to Serve Women and Working Families, conducted by the National Employment Law Project, researchers found that in 41 states, unemployed men are more likely than unemployed women to receive jobless benefits. Some of the reasons for this difference:

• Almost all states require workers to meet a minimum income eligibility standard in order to receive unemployment benefits. Since women make up 60 percent of low-wage workers, they are less likely than men to meet the income requirements.

• When women do qualify for unemployment benefits, their checks are usually lower than men’s because their wages are lower. On average, women earn 76 cents for every dollar earned by men.

• Family duties also contribute to the unemployment-insurance gender gap: women make up 73 percent of all family primary caregivers and also comprise 70 percent of part-time workers. In 33 states, workers are not eligible for unemployment insurance unless they are able to look for full-time jobs, and 30 states lack adequate provisions for workers to collect unemployment when they quit their jobs for family reasons.

• Women are also more likely than men to leave their jobs due to sexual harassment or domestic violence. Though state unemployment programs are designed to pay benefits to people who lose jobs through no fault of their own, women who suffer from violence or harassment do not fit that definition in a vast majority of states. Only 13 states allow workers who quit their jobs due to sexual or other harassment to collect unemployment benefits, and only 18 states have unemployment insurance that covers women who leave their jobs due to domestic violence.

Like Pollitt suggests, the fact that women are unemployed in vast numbers, yet in many cases unable to access even the minimal safety net unemployment insurance provides, is not nearly as newsworthy as the continued unemployment of white male executives.

What will it take, policymakers? If it takes vast amounts of white-collar unemployment for lawmakers to sit up and take notice, then by all means, this is a white-collar recession–certainly, there are no shortage of examples. However, this is not license to forget all the rest of the unemployed: the blue-collar workers whose jobs have been eliminated as a result of technological advances and overseas migration; the single mother struggling to balance family responsibilities and low-wage employment; and the minority workers who cannot get hired due to the combination of a recession and simultaneous decline of diversity and affirmative action work. All those people are out of work too, and just as miserable, if not more so, than the white-collar workers who are shocked, shocked! to find themselves in this position for the first time ever.

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