GALLUP NEWS SERVICE
Princeton, NJ -- One result of the current "profits recession" has been a seemingly endless barrage of new layoff announcements. As many companies announced their lower earnings for the first quarter of 2001 and warned about continued earnings pressures in the months ahead, they also let Wall Street know that they would be reducing costs and laying off a significant number of workers.
Recently, the Bureau of Labor Statistics confirmed that the general perception of record layoff announcements is indeed a reality. According to the Bureau, there were 1,501 mass layoff actions (involving 50 or more persons from a single firm) during February 2001. This is the highest number of layoff events for any February since measurement began during April 1995.
Given this atmosphere of continuous layoff announcements, one might expect that many American workers would fear for their jobs. According to a new Gallup poll conducted April 6-8, however, this is not the case. Only one out of 20 workers (5%) say that they feel it is "very likely" that they will lose their job or be laid-off during the next 12 months, while another 7% say they think it is "fairly likely." This total of 12% of workers who express some fear for their jobs is the same as it was the last time Gallup asked this question December 4-6, 1998, at a time when economic conditions were generally perceived to be much better than they are today. It should also be noted that the percentage of workers saying they think it is "very likely" or "fairly likely" that they will be laid off has not been very high at any time when Gallup has asked this question at various points during the past 25 years.
Worker optimism about job security may be a significant key to understanding the current economic data that show that there has been only a small drop-off in consumer spending (down 0.2% during March). The fact that relatively few workers feel that today's record number of layoff announcements will actually impact them provides reason to be optimistic that consumers will continue to spend in the months ahead -- keeping the current slowdown/recession from becoming much worse.
Why do so few fear layoffs? The American worker has just experienced almost a decade of good economic times. Many workers, and for that matter many companies, have little recent experience with what happens during a recession. The real question is whether the American worker is optimistic because economic conditions are really better than today's record number of layoff actions would suggest, or whether today's workers simply don't have enough experience to know when an economic downturn might actually impact them.
The Federal Reserve Board's surprising cut in interest rates in between meetings of the Federal Open Market Committee (FOMC) suggests that the nation's monetary policy makers would answer this question by saying that today's workers are too optimistic given current economic trends. In this regard, the recent Gallup poll provides an important insight into what may happen if worker optimism is misplaced. The fact is that few workers seem financially equipped to handle even a relatively brief job loss. It may be the Fed's recognition of this danger, at least in part, that led it to take its unexpected action to lower interest rates.
Workers Say Their Companies Are Doing Well
Another set of data in Gallup's new survey suggests workers may
have a rational basis for their confidence about their jobs. Two
out of three Americans say that economic conditions in their
community are "very good" (13%) or "good" (54%). This is down
somewhat from the three out of four Americans (77%) who said that
economic conditions in their community were "very good" (23%) or
"good" (54%) when Gallup last asked this question March 20-22, 1998
-- a time of booming consumer confidence ratings. On the other
hand, it is the same as the 65% of Americans who felt this way
during August 1997 when confidence was also relatively high and
layoffs were scarce.
More importantly, during April 2001, eight out of 10 American workers (81%) describe business conditions where they work are either "very good" (28%) or "good" (53%). Obviously, workers know more about the business conditions at the company where they work, and they are more optimistic about those companies than they are about business conditions in their community, not to mention the nation as a whole. (During April 2001, only 45% of Americans say economic conditions in the country are "excellent" (4%) or "good" (41%).
This may explain, at least in part, why most workers do not fear layoffs in spite of all the layoff announcements. The fact is that most workers feel that the business they work for is doing well and thus, they have little to fear.
(Of course, it should be noted that most Americans normally rate the economic situation in their local community and in their place of employment much better than economic conditions in the nation as a whole. This is an example of the well-documented phenomenon that individuals almost always rate conditions as worse "out there" across the country than they do in their own back yards.)
Most Workers Expect Pay Raises in 2001
The fact that most workers feel that the business they work for is
doing well may also explain another somewhat stunning disconnect.
During August 1999, 54% of the nation's adults said that economic
conditions in the country as a whole were getting better, while 31%
said they were getting worse. That same month 72% of workers said
that they had received a pay raise during the past 12 months, and
75% said they expected to get another pay raise in the year ahead.
Given the public's expectations of improving economic conditions,
it seems reasonable that workers at that time expected to continue
to receive pay raises.
Of course, during April 2001, expectations for the economy are much different. Nearly two out of three people say that economic conditions in the country as a whole are getting worse, while only 24% say they are getting better. In spite of these sharply different expectations, during April 2001, three out of four workers (76%) say they expect to get another pay raise in the year ahead. As was the case during 1999, 72% of workers surveyed during 2001 also say that they had received a pay raise during the past 12 months. Given the public's expectations of rapidly deteriorating economic conditions during 2001, it seems highly counterintuitive that so many workers should expect to continue to receive pay raises in the year ahead. On the other hand, if the company you work for is doing well, why shouldn't you expect another pay raise in this year?
Most Workers Are Not Prepared for Layoffs
As noted earlier, it may be that the current "profits recession" is
not having as great an impact on the overall economy as many
observers and the markets seem to believe. Maybe, today's workers
have a good idea about their company's prospects in 2001 and their
optimism is warranted.
More likely, however, is the possibility that the "lack of visibility" that is so pervasive on Wall Street has also affected Main Street. Unemployment is a lagging economic indicator, and it may turn out that many more workers will feel that their jobs are threatened in the months ahead.
Unfortunately, most workers are not financially prepared to handle being out of work for any length of time. When asked during April 2001 how many months they could go without a job before experiencing significant financial hardship, about half (49%) of all workers say they could last less than three months. Another third (33%), say they could handle things for between three and six months. Only 17% of workers say they could go for more than six months without encountering significant financial hardships.
Compounding the situation is the fact that just 37% of workers feel that they would be "very likely" to find a job just as good as the one they now have if they lose their current job. Another 33%, say that they would be "somewhat likely" to find just as good a job, while 30% say they would be "not too likely" (23%) or "not at all likely" (7%) to find just as good a job as they have right now.
In sum, it is clearly good news for the economy that workers are optimistic about their jobs and their prospects for a getting a raise in the next 12 months. This bodes well for consumer spending in the months ahead. If worker optimism is misplaced, however, Gallup's polling suggests that consumers/workers are not financially ready to handle even a relatively brief period of unemployment. If worker optimism turns out to be a bubble that bursts, then the current slowdown/recession could become something much more significant.
Survey Methods
Results are based on telephone interviews with 1,025 national adults, aged 18+, conducted April 6-8, 2001. For results based on the total sample of national adults, one can say with 95% confidence that the margin of sampling error is +/- 3 percentage points.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
Now turning to the economy,
How would you rate economic conditions in this country today -- as excellent, good, only fair, or poor?
|
|
|
|
|
No |
|
|
|
|
No |
|||
|
2001 |
1996 |
|||||||||||
|
2001 Apr 6-8 |
4 |
41 |
41 |
14 |
* |
1996 Aug 30-Sep 1 † |
3 |
34 |
46 |
16 |
1 |
|
|
1996 Jul 18-21 |
5 |
38 |
43 |
14 |
* |
|||||||
|
2001 Mar 5-7 |
3 |
43 |
43 |
10 |
1 |
1996 May 9-12 |
3 |
27 |
50 |
19 |
1 |
|
|
2001 Feb 1-4 |
7 |
44 |
36 |
13 |
* |
1996 Apr 9-10 |
1 |
26 |
52 |
20 |
1 |
|
|
2001 Jan 10-14 |
11 |
56 |
27 |
6 |
* |
1996 Mar 15-17 |
2 |
31 |
48 |
18 |
1 |
|
|
2000 |
1996 Jan 5-7 |
1 |
28 |
47 |
23 |
1 |
||||||
|
2000 Dec 2-4 |
12 |
51 |
28 |
8 |
1 |
1995 |
||||||
|
2000 Nov 13-15 |
19 |
53 |
21 |
7 |
* |
1995 Nov 6-8 |
2 |
28 |
47 |
22 |
1 |
|
|
2000 Oct 6-9 |
14 |
57 |
24 |
4 |
1 |
1995 May 11-14 |
2 |
27 |
50 |
20 |
1 |
|
|
2000 Aug 18-19 |
25 |
49 |
21 |
4 |
1 |
1994 |
||||||
|
2000 Jul 25-26 |
26 |
48 |
21 |
4 |
1 |
1994 Dec 16-18 |
2 |
25 |
52 |
21 |
* |
|
|
2000 May 18-21 |
17 |
49 |
24 |
9 |
1 |
1994 Nov 2-6 |
2 |
28 |
49 |
20 |
1 |
|
|
2000 Apr 3-9 |
14 |
46 |
30 |
9 |
1 |
1994 Oct 22-25 |
1 |
25 |
52 |
21 |
1 |
|
|
2000 Jan 7-10 |
19 |
52 |
23 |
5 |
1 |
1994 Jul 15-17 |
1 |
26 |
52 |
21 |
* |
|
|
1999 |
1994 Apr 22-24 |
1 |
23 |
49 |
26 |
1 |
||||||
|
1999 Oct 21-24 |
16 |
49 |
27 |
8 |
* |
1994 Jan 15-17 |
* |
22 |
54 |
24 |
* |
|
|
1999 Sep 10-14 |
20 |
47 |
24 |
8 |
1 |
1993 |
||||||
|
1999 Aug 24-26 |
14 |
50 |
28 |
7 |
1 |
1993 Dec 4-6 |
1 |
20 |
57 |
21 |
1 |
|
|
1999 Jun 4-5 |
18 |
56 |
21 |
5 |
* |
1993 Nov 2-4 |
1 |
16 |
50 |
33 |
* |
|
|
1999 Jan 15-17 |
14 |
55 |
27 |
4 |
* |
1993 Aug 8-10 |
* |
10 |
49 |
40 |
1 |
|
|
1998 |
1993 Jun 29-30 |
1 |
14 |
52 |
32 |
1 |
||||||
|
1998 Dec 4-6 |
13 |
52 |
27 |
8 |
* |
1993 Feb 12-14 |
* |
14 |
46 |
39 |
1 |
|
|
1998 Oct 29-Nov 1 |
13 |
53 |
27 |
6 |
1 |
1992 |
||||||
|
1998 Sep 1 |
11 |
54 |
25 |
9 |
1 |
1992 Dec 18-20 |
2 |
16 |
34 |
47 |
1 |
|
|
1998 Mar 20-22 |
20 |
46 |
27 |
7 |
* |
1992 Dec 4-6 |
1 |
14 |
41 |
43 |
1 |
|
|
1997 |
1992 Oct 23-25 |
* |
11 |
45 |
43 |
1 |
||||||
|
1997 Dec 18-21 |
7 |
41 |
38 |
12 |
2 |
1992 Sep 11-15 |
1 |
10 |
37 |
51 |
1 |
|
|
1997 Nov 6-9 |
10 |
48 |
33 |
9 |
* |
1992 Aug 31-Sep 2 † |
1 |
9 |
37 |
53 |
* |
|
|
1997 Aug 22-25^ |
8 |
41 |
38 |
13 |
* |
1992 Jun 12-14 † |
1 |
11 |
47 |
41 |
* |
|
|
1997 May 6-7 |
7 |
39 |
38 |
15 |
1 |
1992 Apr 9-12 † |
1 |
11 |
40 |
48 |
* |
|
|
1997 Jan 31-Feb 2 |
4 |
38 |
43 |
15 |
* |
1992 Jan 3-6 |
* |
12 |
46 |
41 |
1 |
|
|
1996 |
||||||||||||
|
1996 Oct 26-29 |
5 |
42 |
39 |
13 |
1 |
|||||||
|
^ Asked of half sample |
||||||||||||
|
† Asked of Registered Voters |
||||||||||||
|
*Less than 0.5% |
||||||||||||
Right now, do you think that economic conditions in the country as a whole are getting better or getting worse?
|
Get- |
Get- |
SAME |
No opinion |
Get- |
Get- |
SAME |
No opinion |
|||
|
1998 |
||||||||||
|
2001 |
(NA) 1998 Mar 20-22 |
69 |
21 |
8 |
2 |
|||||
|
2001 Apr 6-8 |
24 |
63 |
9 |
4 |
1997 |
|||||
|
(NA) 1997 Dec 18-21 |
49 |
39 |
8 |
4 |
||||||
|
2001 Mar 5-7 |
28 |
61 |
7 |
4 |
(NA) 1997 Nov 6-9 |
51 |
37 |
9 |
3 |
|
|
2001 Feb 1-4 |
23 |
66 |
8 |
3 |
(NA) 1997 May 6-7 |
50 |
40 |
7 |
3 |
|
|
2001 Jan 10-14 |
32 |
56 |
8 |
4 |
(NA) 1997 Jan 31-Feb 2 |
46 |
39 |
12 |
3 |
|
|
2000 |
1996 |
|||||||||
|
(NA) 2000 Dec 2-4 |
39 |
48 |
8 |
5 |
(NA) 1996 Oct 26-29 |
50 |
38 |
7 |
5 |
|
|
(NA) 2000 Nov 13-15 |
50 |
38 |
9 |
3 |
(RV) 1996 Aug 30-Sep 1 |
52 |
37 |
8 |
3 |
|
|
(NA) 2000 Oct 6-9 |
54 |
34 |
10 |
2 |
(NA) 1996 Jul 18-21 |
43 |
46 |
9 |
2 |
|
|
(NA) 2000 Aug 18-19 |
60 |
26 |
10 |
4 |
(NA) 1996 May 9-12 |
39 |
49 |
9 |
3 |
|
|
(NA) 2000 Jul 25-26 |
58 |
29 |
9 |
4 |
1992 |
|||||
|
(NA) 2000 May 18-21 |
52 |
37 |
9 |
2 |
(RV) 1992 Aug 31-Sep 2 |
29 |
59 |
10 |
2 |
|
|
(NA) 2000 Jan 7-10 |
69 |
23 |
6 |
2 |
(RV) 1992 Aug 10-12 |
24 |
65 |
10 |
1 |
|
|
1999 |
(RV) 1992 Jun 12-14 |
28 |
61 |
9 |
2 |
|||||
|
(NA) 1999 Oct 21-24 |
52 |
34 |
11 |
3 |
(RV) 1992 Apr 9-12 |
40 |
45 |
13 |
2 |
|
|
(NA) 1999 Sep 10-14 |
59 |
29 |
9 |
3 |
(RV) 1992 Mar 20-22 |
37 |
51 |
11 |
1 |
|
|
(NA) 1999 Aug 24-26 |
54 |
31 |
12 |
3 |
(RV) 1992 Jan 31-Feb 1 |
22 |
70 |
7 |
1 |
|
|
(NA) 1999 Jun 4-5 |
60 |
27 |
9 |
4 |
(NA) 1992 Jan 3-6 |
22 |
71 |
6 |
1 |
|
|
(NA) 1999 Jan 15-17 |
63 |
28 |
6 |
3 |
1991 |
|||||
|
1998 |
(NA) 1991 Dec |
19 |
69 |
9 |
3 |
|||||
|
(NA) 1998 Dec 4-6 |
52 |
38 |
8 |
2 |
(NA) 1991 Sep |
27 |
60 |
10 |
3 |
|
|
(NA) 1998 Oct 29-Nov 1 |
51 |
38 |
8 |
3 |
(NA) 1991 Jul |
34 |
51 |
9 |
6 |
|
|
(NA) 1998 Sep 1 |
45 |
41 |
11 |
3 |
||||||
|
(vol.)=Volunteered response |
||||||||||
How would you describe business conditions in your community -- would you say they are very good, good, not too good, or bad?
|
Very good |
Good |
Not too good |
Bad |
No opinion |
|
|
2001 Apr 6-8 |
13 |
54 |
25 |
6 |
2 |
|
1998 Mar 20-22 |
23 |
54 |
16 |
6 |
1 |
|
1997 Aug 22-25 |
15 |
50 |
25 |
9 |
1 |
|
1996 Mar 8-10 |
13 |
58 |
21 |
6 |
2 |
|
1991 Jul 11-14 |
5 |
43 |
37 |
12 |
3 |
|
1991 May 16-19 |
6 |
44 |
37 |
12 |
2 |
|
1991 Mar 21-24 |
5 |
39 |
37 |
18 |
1 |
|
1990 Jul 19-22 |
10 |
47 |
30 |
11 |
2 |
|
1975 Jan 10-15 |
4 |
37 |
39 |
17 |
3 |
|
1971 Feb 19-22 |
5 |
39 |
37 |
12 |
7 |
|
1970 Jul 31-Aug 2 |
9 |
44 |
30 |
9 |
7 |
|
1964 Nov 20-25 |
17 |
55 |
20 |
5 |
4 |
|
1964 Jun 25-30 |
13 |
44 |
28 |
9 |
6 |
|
1964 Feb 28-Mar 5 |
11 |
44 |
31 |
9 |
5 |
|
1963 Apr 4-9 |
10 |
45 |
31 |
10 |
3 |
|
1962 Dec 13-18 |
12 |
52 |
26 |
6 |
4 |
|
1962 Oct 19-24 |
10 |
45 |
30 |
8 |
7 |
|
1962 Aug 23-28 |
10 |
47 |
30 |
7 |
6 |
|
1962 Jul 26-31 |
8 |
45 |
32 |
8 |
7 |
|
1962 Jun 28-Jul 3 |
14 |
47 |
28 |
6 |
6 |
|
1961 Oct 19-24 |
9 |
45 |
33 |
9 |
4 |
How well is the company or organization that you work for doing -- would you say business conditions there are very good, good, not too good, or bad?
BASED ON -- 631 -- EMPLOYED ADULTS; ±4 PCT. PTS.
|
Very |
|
Not too good |
|
DOESN'T APPLY (vol.) |
No |
|
|
2001 Apr 6-8 |
28 |
53 |
14 |
4 |
1 |
* |
|
(vol.)=Volunteered response |
||||||
|
*Less than 0.5% |
||||||
Thinking about the next 12 months, how likely do you think it is that you will lose your job or be laid off -- is it very likely, fairly likely, not too likely, or not at all likely?
BASED ON -- 631 -- EMPLOYED ADULTS; ±4 PCT. PTS.
|
Very |
Fairly |
Not too likely |
Not at all likely |
No |
|
|
2001 Apr 6-8 |
5 |
7 |
36 |
52 |
* |
|
1998 Dec 4-6 |
5 |
7 |
27 |
60 |
1 |
|
1997 Jun 26-29 |
3 |
6 |
26 |
63 |
2 |
|
1996 Apr 9-10 |
5 |
9 |
34 |
51 |
1 |
|
1993 Dec 4-6 |
5 |
7 |
27 |
59 |
2 |
|
1991 Oct |
6 |
8 |
26 |
59 |
1 |
|
1991 Jul |
5 |
10 |
25 |
59 |
1 |
|
1991 Mar |
5 |
7 |
22 |
65 |
1 |
|
1990 Oct |
7 |
9 |
21 |
62 |
1 |
|
1990 Jul |
6 |
6 |
24 |
62 |
2 |
|
1989 Feb |
4 |
8 |
35 |
53 |
* |
|
1983 Apr |
8 |
8 |
26 |
55 |
4 |
|
1982 Nov |
9 |
10 |
29 |
48 |
4 |
|
1982 Jun |
8 |
7 |
27 |
54 |
4 |
|
1982 Jan |
5 |
10 |
25 |
57 |
3 |
|
1980 Sep |
6 |
9 |
24 |
60 |
2 |
|
1980 May |
6 |
8 |
24 |
60 |
2 |
|
1979 Nov |
3 |
8 |
18 |
66 |
4 |
|
1976 Oct |
6 |
6 |
21 |
64 |
3 |
|
1975 Apr |
4 |
8 |
22 |
63 |
3 |
|
1975 Jan |
5 |
10 |
27 |
54 |
4 |
|
*Less than 0.5% |
If you were to lose your job, how likely is it that you would find a job just as good as the one you have now -- very likely, somewhat likely, not very likely, or not at all likely?
BASED ON – 631 – EMPLOYED ADULTS; ±4 PCT. PTS.
|
Very |
Somewhat likely |
Not too |
Not at all likely |
No |
|
|
2001 Apr 6-8 |
37 |
33 |
23 |
7 |
* |
|
2001 Feb 9-11 |
35 |
29 |
24 |
11 |
1 |
|
*Less than 0.5% |
If you were to lose your job, how many months could you go without a job before experiencing significant financial hardship?
BASED ON – 631 – EMPLOYED ADULTS; ±4 PCT. PTS.
|
2001 Apr 6-8 |
|
|
None |
6 |
|
Less than one month |
7 |
|
1 month |
21 |
|
2 months |
15 |
|
3 months |
13 |
|
4 months |
5 |
|
5 months |
1 |
|
6 months |
14 |
|
7-11 months |
2 |
|
12 months |
3 |
|
More than a year |
8 |
|
Indefinitely/Don't need job |
4 |
|
No opinion |
1 |
|
SUMMARY: |
|
|
Total Less than 3 months |
49 |
|
3-6 months |
33 |
|
Longer than 6 months |
17 |
|
No opinion |
1 |
Have you, personally, received a pay raise from your employer in the PAST 12 months?
BASED ON – 537 – EMPLOYED BUT NOT SELF-EMPLOYED ADULTS; ±5 PCT. PTS.
|
Yes |
No |
No opinion |
|
|
2001 Apr 6-8 |
72 |
28 |
* |
|
1999 Aug 16-18 |
72 |
28 |
* |
|
*Less than 0.5% |
Do you expect to receive a pay raise from your employer in the NEXT 12 months?
BASED ON – 537 – EMPLOYED BUT NOT SELF-EMPLOYED ADULTS; ±5 PCT. PTS.
|
Yes |
No |
No opinion |
|
|
2001 Apr 6-8 |
76 |
22 |
2 |
|
1999 Aug 16-18 |
75 |
22 |
3 |
