What You Didn't Know About the Job Market

American CEOs make more in a single workday than the average worker earns all year, and other interesting Labor Day facts.

By Anne Fisher  (Fortune.com  08-30-2002)

You already know the CEO of your company makes a lot more money than you do--but 300 times more? It's true. According to The State of Working America : 2002-2003, a new report by the nonprofit Economic Policy Institute: "In 1965, U.S. CEOs in major companies earned 26 times more than an average worker. This ratio grew to 36.5 in 1978 and to 71.7 in 1989. There was a huge jump in the 1990s as the ratio of CEO-to-worker pay surged to 310... In other words, by 2000, a CEO earned more in one workday (there are 260 in a year) than the average worker earned in 52 weeks." Egads. Are these guys (and a few gals) really worth that much? You be the judge.

With Labor Day just around the corner, let's take a look at some other statistics that illuminate just what's going on in the job market now--and what the future may hold.

Small raises and reduced opportunities. "The tight labor markets of the late '90s brought the first persistent, broad-based prosperity in decades," says Lawrence Mishel, the EPI's president. "But now, with the boom gone bust, American workers are headed back to an economy marred by slow wage growth and no job growth, with wage and income disparities widening once again." The Labor Department reported on August 2 that only 6,000 new jobs were created in July--a dismally far cry from the projected 60,000.

Reasons to move to the South. Things are tough all over, but worse in some parts of the country than in others. A new set of Labor Department data aptly named JOLTS, for job openings and labor turnover, reveals that between mid-2001 and May 2002, job openings in the Northeast fell by 250,000, or about 29%. The Midwest fared even worse, with job openings plunging by 313,000, or 31%, during the same period. The South shone by comparison, since it had the most job openings to start with (1.5 million) and lost the fewest (122,000, or about 8%).

Less trust. Do you trust senior management at your company? If so, you're in the minority. A survey by human resources consultants Watson Wyatt reveals that just 39% of employees, or fewer than 2 in 5, say they have confidence in their leaders' competence and integrity. That represents a five-point drop since the last survey two years ago. Entry-level job seekers seem most skeptical of all, according to a poll by recruiting company WetFeet. Fully 80% of new college grads "said they trust corporate recruiters less this year than they did last year"--perhaps because about one-third report having had job offers rescinded at the last minute.

Warier job hunters. Even senior managers are becoming more cautious, says a new survey from nationwide executive-networking group ExecuNet. Reacting to recent scandals, 69% of executives say they'll review potential employers' financial statements more carefully than before, and 62% will scrutinize employers' culture and value systems more closely. Intriguingly, though, the survey suggests that these same senior managers may in the past have been part of the problem: About 40% left a previous job because of uneasiness over unethical business practices--but most (75%) never reported their employers' misdeeds.

Self-confidence. If employees' and job seekers' faith in corporate America has faltered, their faith in themselves has apparently held firm. Outplacement and career-coaching behemoth Lee Hecht Harrison surveyed 507 recently laid-off managers and found that 50% believe they have a high degree of control over their professional futures; another 47% claim a moderate degree of control. "With all the bad news about big business today, it would be easy for job seekers to throw up their hands and question why their efforts matter," says Lee Hecht Harrison vice president Bernadette Kenny. "Instead, all but 3% remain highly motivated and confident they'll see the fruits of their labor."

Demand for managers, teachers, and more. Where will the jobs of the future be? In the next ten years, according to new research from the Employment Policy Foundation, the U.S. economy will generate 23 million new jobs. Management jobs will account for about 29%, or 7 million. Professional occupations will create 7.5 million new openings, including 2.5 million jobs in mathematics and computer science and 2.1 million teaching positions. And, believe it or not, the EPF sees labor shortages ahead. As Baby Boomers retire, American jobs requiring college degrees will increase by 20 million. At current annual college and university graduation rates--1.15 million bachelor's degrees per year--the available college-degree-holders will fall 6 million short by the year 2012.

Let's hope it doesn't take that long for the U.S. job market to bounce back. Enjoy your Labor Day!