Job Cuts Target Lower-Wage Earners

Compiled By Jill Jusko The odds that employees earning less than $50,000 per year will be downsized have increased dramatically in the last two years, while just the opposite is true for earners making more than $85,000, says Challenger, Gray & Christmas Inc., Chicago. In the last two years, the odds that lower wage earners will lose their jobs to downsizing have increased by 43%, says the international outplacement firm. By contrast, the odds for employees who make more than $85,000 annually have dropped by 23%. "Higher paid managers and executives . . . will find their jobs protected because they are viewed, among other reasons, as the custodians of corporate memory," says firm President John A. Challenger. Contributing to this trend is a shift to outsourcing by businesses. Even when an improving economy leads to increased hiring, in many cases it is likely to result in more work for independent contractors or temporary-help agency workers rather than full-time employees. Such a shift helps the higher paid manager, says Challenger, Gray & Christmas. "They are here to guide the company and its employees," Challenger says. "Companies generally have a greater amount of time and money invested in these workers."

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