The convergence of bad news has the country reeling, but rallying to survive is something employers and workers must support each other through.
by Michael Beygelman
As we neared the end of 2007, warning signs of an economic slowdown were beginning to emerge. In 2008, these signs accelerated and transformed into a state of volatility and uncertainty for the U.S. and global economies.
Many events contributed to make this a reality. The housing and credit crises continued to mobilize. Gas prices soared as the cost of oil peaked in the summer at around $140 a barrel. The banking industry was taken by storm as many reputable, storied banks went bankrupt, merged, or required rescuing. The U.S. government approved an historic $700 billion economic bailout. A hard-fought presidential election dominated headlines, bringing long-debated issues like healthcare, immigration, and education reform back into the national dialogue.
These monumental economic and political developments did not happen overnight, but they did impact all of us in our everyday roles as consumers, homeowners, voters, tax payers and, in particular, workers. And, while there are certainly major challenges to overcome in 2009 to get our worlds back on track, these are our challenges. From employee to employer, citizen to politician, and consumer to business owner, the road back to stability and economic growth will once again be paved by the skills, perseverance, innovation, and hard work of the American workforce in 2009.
Sales Confirm Low Confidence
According to the National Retail Federation, holiday sales dropped 2.8 percent in 2008, far below the forecasted increase of 2.2 percent. Citing reasons such as the current recession, severe holiday weather, and five fewer shopping days this holiday season, this is the first time the National Retail Federation recorded a year-over-year decrease in sales since its creation in 1995. With 66,600 retail industry job losses reported in December, finding new employment opportunities in this space will continue to be a challenge throughout 2009, particularly in areas such as clothing retailers, furniture stores, and car dealerships, which have been the hardest hit by the downward trend in consumer spending.
As consumers tighten their grips on their wallets, goods-producing employers will need to think of even more innovative and creative ways to move their products off shelves. Containing costs will become a bigger priority, and utilizing an efficient workforce strategy will be essential to success as sales growth will not likely be at the same clip as in previous years.
Gas prices yo-yoed throughout 2008, but despite an onslaught of negative economic news, the price of oil is certainly the silver lining right now for consumers. After hitting a peak of more than $147 a barrel in July, the most recent government weekly supply report puts oil prices in the $40 to $50 range—a stark contrast and without a doubt a welcomed relief to drivers all across the country. As our gas bills decrease, we as a
nation need to be sure not to squander these savings. We need to use this money to either increase our savings and/or make up for rising prices in other areas of the U.S. economy.
Americans can also use this money to help keep our personal finances in check because employers are certainly going to tighten their belts around raises and bonuses. Employers can think about creative ways to benefit by creating programs that enable their employees to reduce commuting expenses. When gas prices went up this past summer, many companies allowed for alternatives to commuting into the office. This is a good time to reassess the efficiency of these programs and not cancel them if at all possible.
This most recent jobs report indicates greater losses and a higher unemployment rate. We should anticipate that both trends will continue into 2009 with a challenging first quarter ahead for the labor market. While manufacturing, construction, financial services, and retail have been sectors hardest hit, we should still see strong demand for workers with professional skills in sectors such as accounting and finance, IT/technical, engineering, healthcare, etc.
Last year, the U.S. witnessed job losses of 2.6 million, which was the worst year since 1945 (loss of 2.8 million). It is difficult to scan headlines today and not find news of more cuts. But as we have done before, Americans need to tackle the challenges and rally to work through the difficult economic and employment environment. We are a great nation! I am certain we will triumph.