Will Manage for Food

Frank Ruppen was a jet-setting marketing executive dispatched to Australia, Japan and Venezuela by a string of brand-name employers–until the economy soured, and he was dispatched to the street. The Harvard M.B.A. hit the job market with confidence this spring, but after months of rejection, he decided on what he calls “guerrilla tactics.” Ruppen, 45, milled around a midtown Manhattan sidewalk in shirtsleeves, spectacles and a sandwich board with 20 other jobless executives last week. Standing firm amid the lunch-break crush, he shouted, “We want work!”

It has come to this. White-collar workers are joining the jobless ranks in record numbers, tossed aside by the same companies that not long ago lavished them with signing bonuses and free lattes. Although the Labor Department announced last week that overall unemployment fell slightly to 5.6% in September, the number of white-collar workers who are jobless has doubled from two years ago. Professionals, managers and technical and administrative workers now make up 43% of the unemployed, according to the government. “Of course, other workers are hard hit too,” says Jeffrey Wenger, an economist at the nonprofit Economic Policy Institute. “But considering where these people were just a few years ago, yes, it’s pretty grim.”

The most alarming thing about this job crunch is that, once squeezed out of the ranks of the employed, many of the jobless can’t seem to elbow back in. The number of Americans unemployed for six or more months hit 1.6 million last month, up 93% from a year ago. Hundreds of thousands of jobs were created during many months in the ’90s, but the job market shrunk by 43,000 jobs in September. Professionals and other elite workers–who tend to be older, better educated and highly trained–find themselves fighting for a shrinking pool of high-paying jobs. And in the wake of 9/11, only 12% of laid-off managers are willing to relocate for jobs, according to Chicago outplacement firm Challenger, Gray and Christmas–the lowest since the company began tracking that figure in 1986. “There’s a need for security and comfort now,” notes John Challenger, “[but that unwillingness] may contribute to longer unemployment for many.” That helps explain why white-collar workers now make up a whopping 48% of those unemployed for 27 or more weeks, up from 39% just a year ago.

Rick Elliott is one of them. Until a year ago, the analyst for an information-technology (IT) consulting firm and his IT manager wife Carol lived large on a household income of $200,000. They felt so secure that they had recently scaled up from a half-million-dollar home to an even more luxurious one in a tony Chicago suburb. A week after the terrorist attacks on New York and Washington, Elliott, 41, was laid off with only two weeks of severance. Unbowed, he began his job hunt. “I thought it would take six months at the outside,” he says. Seventy-five leads and two interviews later, the Elliotts are in a bind. The couple and their three kids get by on Carol’s income, having tapped out their bank account and Rick’s 401(k). When the $1,600 monthly unemployment checks ran out in June, Elliott took an $8.80-an-hour job as a meat wrapper at the local supermarket. A few weeks ago, the Elliotts–three months behind on their $3,000 monthly mortgage payments–were served with foreclosure papers on their home. Elliott is pinning his hopes on a new career as a butcher. “It’s about survival,” he says.

Things may only get worse for a while. Unemployment typically continues to rise for months after an economy has emerged from recession. “I’d expect unemployment to bounce up in coming months,” says Bill Cheney, chief economist for John Hancock Financial Services. Even if the economy manages to sustain modest growth, companies will slash costs to make up for weak sales and profits. Industries like technology and finance continue to suffer; in recent weeks, such firms as Fidelity Investments, Goldman Sachs and data-storage company EMC Corp. have announced job cuts numbering in the thousands. Other struggling sectors likely to suffer job cuts include telecommunications and numerous travel-related businesses like airlines and hotels.

Meanwhile, some corporate refugees are starting their own businesses, while others are taking jobs that offer lower pay but greater satisfaction. Dan O’Grady, 31, was let go by Sony Electronics in October 2001. Weeks later, he and his wife Liz, 30, discovered that they were expecting their first child. The former public relations representative grew increasingly worried as he scoured job websites and help-wanted pages but found that “every job I applied for, dozens of better-qualified guys did too.” For O’Grady, who grew up in a New York City suburb, the 9/11 attacks stirred deep reflections. “You meet success after success and move up and up, and before you know it, you’re stuck in a job you don’t love, and your life is over,” he says.

Dusting off an old dream, O’Grady applied to become a New York City police officer. After 10 months of unemployment, he started training at the Police Academy last July. “There’s the 40% pay cut and the late hours, and of course the fear factor,” says Liz, an administrator for a hedge fund. She gazes at her husband as she cradles 3-month-old Brennan. “But after 9/11, strangely, I feel fearless. Like this is our way of taking a stand. And I see how happy he is.”

This is not happening just in New York. Across the country, laid-off white-collar workers find themselves reassessing the career goals that once defined them. Pedro Canahuati, 28, had dropped out of college and zoomed up through the ranks to become director of operations at an Internet data–center company headquartered in Denver. “I had been in the industry for about nine years and had quite a bit of experience,” he says. “I always felt that it was the people who didn’t have the experience and couldn’t maintain their value in the company who would be laid off.” Canahuati, who lives in Washington, lost his job last year. He has moved in with his girlfriend to save money and is temping as a Web designer while weighing a return to school.

To be sure, white-collar workers out of a job often suffer less, financially speaking, than do those with less income and training. Educated workers tend to be married to others like themselves, who often also hold jobs that come with health insurance. Many have savings, equity in a home or well-off parents. Their experience and contacts help them in their search for another high-paying job. And they can often afford to get more education for a new career. “If all else fails,” says David Wyss, chief economist with Standard & Poor’s, “there’s always law school.”

But if happiness is largely a matter of expectations, losing a job can be hardest, psychologically, on those who have the farthest to fall. Nathan Wolf had five degrees, 34 years of experience at IBM and a new career as a patent lawyer–or so he thought. Laid off by a law firm in Reston, Va., he finds it “embarrassing” to have to network. The job hunt is stressful, despite the support of his wife and five children. “Let’s be very blunt about it,” he says. “I’m 61, and I’m probably not seen as the best investment, even though I carry so much other experience and stature.”

Since she was let go from her job as a producer for a San Francisco Web publisher, Jamie Delman, 43, dines mostly at home on canned chili. She can’t travel to see a dear friend’s new baby, nor can she continue her habit of treating friends to dinner and movies. “I spend a lot of time in cafes because coffee is cheap,” she says. “I avoid talking to certain friends because I get tired of the questions like, ‘Are you looking? Where have you looked?'” Delman has given up on re-entering the gutted tech field; she is pursuing grant-writing jobs for nonprofit groups and getting by on monthly unemployment checks.

Unemployment insurance was something people like Delman never imagined they would have to think about. But she now relies on the $1,320 monthly income to pay for health insurance. Unemployment benefits are based on income at the old job, and higher-paid workers are more likely to qualify. But the amount varies dramatically from state to state, and even those who merit $1,720 a month–the maximum in such generous states as Pennsylvania–can find it a painful comedown from a salary five or 10 times that amount. Most states provide benefits for only 26 weeks, a period of unemployment that half of white-collar workers today exceed. Congress passed a law in March that temporarily extended the period by 13 weeks. The law expires on Dec. 31, but Congress looks likely to approve another extension. “White-collar workers whine,” says Wyss. “Moreover, they vote.”

After the initial stages of denial and fear, many laid-off workers report feeling unexpected relief. “It’s like the pressure that mounts when you have a winning streak in baseball,” says author Po Bronson, who interviewed scores of laid-off tech workers for his forthcoming book What Should I Do with My Life? “With each success you slowly become more risk-averse because you get more and more scared of failing,” he says. Experiencing the career failure that a layoff implies is “ultimately liberating.”

The swift rise and fall of Felicia Holden as a project manager matched that of her employer, a New York City Internet-design and architecture company. When the call came last summer, “it was devastating,” she says. Still, the experience proved invaluable–mainly as material for her first stand-up comedy act. Soon the slender thirtysomething was pursuing a lifelong ambition, cracking jokes in her Georgia twang before notoriously unforgiving audiences at comedy clubs around the city. “I felt at that point that I had nothing to lose.”

Despite the bleak economic signals, the never-say-die ethos that propelled some job seekers to success in the first place refuses to let them give up. During her year of unemployment, Zoe Quan has plumbed her network of contacts, built over 17 years in telecommunications, to no avail. Her degrees from Harvard and the University of Chicago have not bailed her out, nor has her minority status. “Diversity in hiring has fallen away as a priority,” she notes. Quan, single and in her 40s, has only a few months’ worth of living expenses left in her nest egg. Yet she has turned down jobs that she feels don’t fit her career goals, and she is thinking of going solo as a consultant. Says she: “I think taking the job just for the money or doing something I really hate could do more damage, psychologically, than good.”

Going solo intrigues many corporate refugees. According to Challenger, Gray and Christmas, 11.4% of jobless managers and executives started businesses in the first half of 2002–up from 7.9% in the same period a year ago. Frances Widnt, 47, of Baltimore, Md., is about to join them. Unable to land work as a real estate agent, she is considering kitchen design. “I’ve gone from being bruised to being excited,” she says.

One married couple, Lauren Brockman and John Balla of Tampa, Fla., have decided that they are willing to put their economic status at risk in hope of finding a more fulfilling work life. Both were telecom executives; Brockman, 36, got laid off in July and Balla, 39, a few months earlier. Savings and unemployment benefits have kept them afloat, allowing them to hold on to their comfortable home and even their part-time nanny–for now. The job hunt has proved fruitless. “I don’t think there’s a position on Monster.com even tangentially related to our industry that he hasn’t applied for,” says Brockman of her husband.

But suddenly free to spend more time with their two children and each other, the two find themselves reluctant to go back to the work-centered life they knew. They began negotiations last week to take over a custom cabinet–making firm. “We want to create something tangible, a real product you can see and touch,” says Brockman. “In telecom, unless you’re laying fiber in the ground, you’re doing something very few people actually understand. We like the idea of doing something creative now.” Of course, adds her husband, “we’ll have the best damn connectivity any cabinetmaker has ever had.” –With reporting by Melissa August and Perry Bacon/Washington, Wendy Cole/Chicago, Wendy Malloy Fleming/Tampa and Daniel Terdiman/San Francisco