Most new jobs go to managers and professionals

WASHINGTON — WASHINGTON -- Although many Americans believe that most new jobs are going to hamburger flippers and Wal-Mart clerks, the reality is surprisingly different: More than three-fifths of the jobs created over the past year have gone to managers and professionals.

As thousands of former middle managers at IBM, General Motors and other companies can attest, white-collar workers were hit especially hard in the recent recession. But government statistics now show a steady climb in the hiring of white-collar workers.


Even though managers and professionals, like physicians, lawyers and accountants, make up only 27 percent of the American work force, they have landed more than 60 percent of the 2.2 million net jobs created over the past year. At the same time, the hiring of blue-collar employees has been largely stagnant.

The way economists and corporate executives put it, so many companies squeezed out so many managers during the recent slump that as the economy -- and corporate America -- expanded in the past year, demand for managers rebounded.


"Because of the recession, there was pent-up demand for managers," said Patrick Pittard, managing partner of Heidrick & Struggles, one of the nation's largest executive-search firms. "Many companies that did without executives for a year or two couldn't stand it anymore. They had to fill that slot they left unfilled for so long."

Labor Secretary Robert B. Reich said this pickup in white-collar hiring pointed to profound economic changes that bode ill for unskilled workers, because such a high percentage of new jobs require college degrees, MBAs or other sophisticated training.

"The recent recession had unusually high levels of unemployment for white-collar workers," Mr. Reich said. "But white-collar jobs are coming back. Long-term demand is shifting in favor of people with greater skills."

Typical of this trend is what is happening at Wachovia Corp., a bank-holding company in Winston-Salem, N.C. It has hired 250 management trainees in the past year and plans to hire 250 more next year, even as it lays off some tellers and data-processing personnel whose work has been automated.

Kenneth Torreyson, Wachovia's director of human resources, said many trainees were being hired to work on mutual funds and information systems. He said his company was adding these trainees because "it looks like a few years out things will get a lot better."

He added, "In the last part of the decade and the first 10 years of the new century, this country should be doing pretty well."

Even though white-collar hiring is one of the few bright spots in the employment picture, it is not chugging along as fast as in previous recoveries. In the 31 months since the 1990-91 recession ended, the number of white-collar jobs -- including not just professionals and managers but also some sales, technical and administrative people -- has grown by 3.8 percent. In contrast, white-collar employment jumped by 8 percent in the 31 months after the 1982 recession.

Blue-collar employment presents a more dismal picture, up just 0.3 percent since the recession ended, far lower than the 9.2 percent jump in blue-collar employment in the 31 months after the 1982 recession.


"I take issue with the notion that white-collar workers are an advantaged class of Americans who are enjoying open-ended prosperity in the '90s," said Stephen S. Roach, chief economist with Morgan Stanley & Co. "In an absolute sense, white-collar workers are doing better than blue-collar workers. But compared to past recoveries, the white-collar job machine is in a different gear."

The unemployment rate for white-collar workers is 4.2 percent; for blue-collar workers, it is just under 9 percent. Even so, white-collarunemployment jumped by 70 percent during the recent recession. In contrast, in several postwar recessions white-collar unemployment did not rise.

"The typical recession is very much blue-collar oriented," said Lawrence H. Katz, the Labor Department's chief economist. "This one was more egalitarian. Both white collars and blue collars got hit."

The overall jobless rate is 6.8 percent, and the Bureau of Labor Statistics will issue its November employment report tomorrow.

Over the past year, one of the biggest jumps in employment has been the 400,000 leap, to 11.9 million, in the number of professionals at professional service industries, including lawyers, accountants, architects, registered nurses and engineers.

This jump was evident at Arthur Andersen & Co., the accounting and consulting firm. In the past year, it has expanded its work force by 2,000, to 29,000 workers; most of the newly hired have degrees in accounting, computer science, engineering or mathematics.


According to the Bureau of Labor Statistics, there has been a jump of 150,000, to 2.1 million, in the number of managers in finance, insurance and real estate over the past year. The number of managers in construction has jumped by 100,000, to just short of 1 million. And in manufacturing, the number of management jobs is up 110,000, to 2.4 million.

As a result, managers accounted for a greatly disproportionate share of new jobs -- they represent 13 percent of all employed Americans, but got 37 percent of the net new jobs over the past year.