Does the Global Financial Crisis Threaten Your Job?
There is little doubt that the Global Economic Crisis has already hurt job growth. The Global unemployment rate has climbed more than ever before and the unemployment rate is likely to rise further — and remain high for a considerable period after the financial crisis subsides and economic growth resumes.
Obviously, jobs in the banking, finance, construction and residential real estate sectors will take a direct hit because the problem started with a bubble in home prices. But the damage is likely to spread to other sectors. Industries that rely on customers who use credit to buy their goods are especially vulnerable. Thus jobs in durable goods manufacturing — such as autos, heavy household appliances and business equipment — are likely to be hit hard.
Historically, most downturns have hit the least skilled the hardest, as employers hold on to workers with unique skills who would be expensive to replace. This downturn, however, is likely to be more democratic than the norm because of the severity of the credit crunch. Research indicates that employers hire relatively more skilled workers when they invest in new plant and equipment, especially high-tech information and computing equipment .If funds for investment are not available because of the financial crisis, however, companies will hire fewer skilled workers.
Consistent with this prediction, initial signs indicate that the employment shock has been felt more by college graduates than by those with a high school degree or less
What does this mean for you? Even in the best of times, the labor market is highly volatile, with millions of jobs being created and destroyed each month. But just because your job may have been safe in past downturns does not mean it will be secure this time. Key questions you should ask are: Does your company need investment funds to upgrade plant and equipment to compete with other companies? Do your customers rely mainly on credit to buy your product or service? Do you do business with companies that are hard hit by the financial crisis? If your answers to these questions are yes, your job is more likely to be at risk.
