Market difficult for unskilled workers

January 26, 2009 11:31:13 PM PST
The slumping economy is affecting companies nationwide and many are cutting thousands of jobs. The latest round of pink slips will affect nearly 30,000 Americans.

The companies include:

  • Caterpillar, which has already eliminated 15,000 jobs, will cut 5,000 more by March.
  • Sprint-Nextel will slash 8,000 jobs.
  • General Motors will lay off another 2,000 layoffs at plants in Michigan and Ohio.
  • Halliburton, the oil conglomerate, said it will make cuts too, but didn't provide details.

    Their job for now is to attend career and skills-building sessions at work2future. Today, they're learning how to network.

    Most are middle-aged, and almost a third of them worked in the retail sector.

    "If you look at that job level, it's very difficult because you're competing with a large number of people. When we say low skill, maybe high school degree and not a college degree, so there's a lot of competition out there," said San Jose State University Economics Professor Tom Means, Ph.D.

    And the competition for jobs will be growing.

    About 44 percent of the companies in a nationwide survey say they've laid off workers this month, compared to 14 percent that added jobs. The survey of 104 companies was conducted by the National Association for Business Economics.

    Over the next six months, 39 percent of the respondents expect to cut jobs, either through attrition or significant layoffs. So unemployment can be an opportunity to take skills-building classes, or to change careers.

    However, for some, the urgent need to replace a lost paycheck can't wait.

    Jeff Ruster is executive director of work2future, a partnership of government and private industry to provide job development services.

    "One of the challenges we do see is that people do have a lot of financial obligations, and so there may be some opportunities that can offer higher-wage opportunities, but it's that choice between do I take that survival job and I can get a paycheck, or do I invest in the training that I can get that may take away from my ability to earn income for the moment," said Ruster.

    With so many retail jobs evaporating at one time, economists say low-wage workers may not find a replacement job quickly.

    "Economic recovery does not mean economic health. It will take quite a while to recover to the point where the unemployment rate is again down where it was a year ago," said Comerica Bank Chief Economist Dana Johnson, Ph.D.

    For many of the unemployed, it's going to be a long road ahead with a new job possibly six months to a year away.