JUST ADD A 0 TO THE SALARIES AND ...YEP, PRETTY MUCH SUMS IT UP.
Monday, Feb. 17, 1975
Recession's first victims are always at the lower end of the labor pyramid: the blue-collar worker, office staff and sales help. But the current slump is painfully hitting corporate managers and administrators, who in the past were relatively immune from layoffs. In January unemployment among managers hit the highest point in more than 15 years. Two typical examples:
> Until last November, Ed Bogota, 30, was earning more than $25,000 a year as trust investment manager in the Manhattan office of the Corning Glass Works. Abruptly, his job was abolished. "I got caught in cost cutting," he explains. BOgota is willing now to take a 15% reduction in salary. But with jobs scarce in the investment field, he acknowledges that "it is a matter of luck taking it from here."
> After 21 years with Taplinger, Inc., a public relations firm, Bertha Kelly, 50, was making $20,000 a year as vice president in charge of West Coast operations. When Taplinger merged with Rogers, Cowan & Brenner, Kelly was dismissed without severance. "I've had to learn to avoid all extravagance," she says. "In fact, I'm just scratching along." Her job prospects: dim.
Since 1958, when the Bureau of Labor Statistics first tracked unemployment by occupational categories, the jobless rate for managers and administrators had exceeded 2% only once (in 1961) until late last year. Then it shot up to 2.6% in December and 3.3% last month. Compared with the overall national unemployment rate, these figures seem low. But while total unemployment between December 1973 and December 1974 rose by 48%, from 4.4 million to 6.5 million, unemployment among managers and administrators jumped by 85%, from 125,000 to 231,000. That was a sharper increase than for any other white-collar occupational group.
One reason for the vulnerability of executives in the current recession, says Social Scientist Peter Drucker, is that middle management in the past 20 years has grown three times as fast as total employment, and executive ranks are bloated. Hordes of postwar babies—now 28 years of age on the average —are crowding into middle-management positions in the $25,000-and-up level. Says Eugene Jennings, professor of management at Michigan State University: "The older employees seem to be blocking up the corporate arteries." More than ever before, these middle-aged middle managers are being replaced by younger ones. The psychological toll, Jennings adds, is severe. "This is not part of the life-style for a middle-management person. It is literally a period of mental shock. They wonder: 'Why me?' "
Yet at the same time, there are plenty of job vacancies—for the right people in the right places. Robert Olivier, a Manhattan-based executive headhunter, reports the highest level of assignments in four years. "The distinct difference," he points out, "is that companies are generally upgrading their demands now. They are not settling for second best." Demand also varies geographically and by industry. Oil companies in the Southwest, for instance, need executives; housing, brokerage and merchant banking firms almost everywhere do not. One particularly promising area for experienced managers is the Middle East, where skilled Americans are often paid two or three times what they earned at home.
Jobless managers aged 40 or over have been seeking help from a nonprofit organization called Forty Plus that has branches in eleven cities. Staffed and directed entirely by volunteers, the organization keeps lists of the "right people" to contact at local companies and instructs new members in job-interview tactics and in the art of writing a competent resume. Some resume tips: eliminate all references to age—including college class and dates of employment—and stress accomplishment in describing previous jobs rather than simply listing the job title.
Discouragement and frustration pursue even the best-bankrolled members. A British Airways employee for 15 years, Ed Maynes lost his $30,000-a-year New York sales manager's job in December. "I know I am not going to be destitute," says Maynes, who has a sizable severance check and his wife's $14,000-a-year salary to cushion his fall. But the 150 resumes he has sent out—125 of them to airlines—have evoked no favorable responses so far. "To be 50 years of age and looking for a job," he admits, "is a bitter pill to swallow."