Even though jobs are looking up this year, it's still not a buyers' market. As thousands of formerly unemployed workers dust off their ties and Oxfords and head back to the office, what are they finding? Is their paycheck better or worse? How have their benefits changed? Are their hours longer? Shorter? More flexible?
True, the unemployment rate is slowly ticking down--from 9 percent in October 2011 to 8.5 percent in December. Nonfarm payroll employment rose by 200,000 in December, and hiring was up in retail, hospitality, professional services and health care.
Yet, for the majority of U.S. workers, average wages have remained stagnant for decades, and median household income dipped during the recession, declining 6.4 percent between 2007 and 2010. According to a study released in December by the John J. Heldrich Center for Workforce Development at Rutgers, just 7 percent of those who were let go during the recession have matched previous income. A little over half reported taking a pay cut – and of those, 29 percent took a reduction in salary by 30 percent or higher. To top off the bad news, 30 percent of the reemployed percent took a reduction in benefits.
Kenneth Couch, an economics professor at the University of Connecticut, has studied previous recessions and estimates that it can take six years or more for reemployed workers to reach a point where they’re earning 80 percent of their old paycheck.
We talked to five laid-off workers who have recently been hired again and learned the real deal about finding new jobs in this economy.
1.Jeffrey Kraut, 51, from textile controller to accounting consultant
Kraut worked at a textile converter in New York City since 1993, managing their financial and accounting functions, and making just below six figures. But in June 2007, after 14 years of service, his job was eliminated. “China had basically taken over the market, so they consolidated two positions into one,” he says. “They said they needed someone that had an MBA in ‘business operations’– I didn’t even know that existed, much less had one.”
Since then, he’s bounced around from unemployment to freelance consulting gigs, to a short stint as the accountant for a Canadian-owned GPS company – at a 45 percent pay cut. Today, he’s found another accounting consultant position, but he’s making 55 percent less than his salary at the textile company – without benefits. He currently pays $1,500 a month for his family’s health care plan, and says he hasn’t contributed to his retirement plan in over four years and had to dip into his old 401k. “Right now, I’m contributing to food and gas and oil – the essentials. I don’t have anything to put away for retirement.”
Though he’s struggling to pay basic bills and the mortgage, he says it’s not the paycheck he misses the most. “I miss the security, just knowing I had a job. I had responsibility and I had moved up over the years and finally had a position with respectability, and now it’s all gone.”