THE U.S. PERSPECTIVE:

Let us now look at the state of the U.S economy vis-à-vis the events of September 11, 2001 and thereafter. The U.S economy had already been in decline during the first half of 2001. In fact, unemployment was gradually rising from a thirty-year low of 3.9% in October of 2000. The events of September 11 only served to move the economy into a more serious and lengthy recession. In addition to the terrible loss of life and property, there has been a lingering effect on the job market. The bubble of impenetrable security had burst. America was wounded and shocked. Americans not only feared for their own security; they began to look with suspicion on their fellow workers from abroad. More than a handful of countries were subject to registering their identities and movements with Homeland Security and other agencies. U.S tolerance for immigrant workers began to wear thin in some places.

Thousands of foreign workers began to find America an unfriendly place- some of them choosing to return to their native lands after decades of working in America. They could not bear to live under the shadow of constant surveillance and distrust. And what of the intended immigrant workers? For those living in poorer countries, America is the ultimate Utopia- the land of milk and honey. So it was most disconcerting for thousands of people all over the world to have their hopes of going to America dashed by this single but tumultuous event.

In July 2002, there were 8.3 million unemployed Americans. To provide relief, in March 2002, President Bush signed the Recession Relief package, which included an extension of unemployment benefits for a minimum of 13 weeks. But the results were far too inadequate, with many unemployed workers still looking for jobs at the end of this period.

The unemployment rate in July 2002 was 5.9%, near a seven-year high. In New York, the situation was even worse. The New York State unemployment rate was 6.0% in July 2002, while the New York City rate was 7.7% - both among the highest in the country. Job growth in the state and the nation continues to be undermined by the national recession and the economic fallout from the events of September 11. New York jobless claims amount to 203,761 for the week ended 24 July 2004. (Source: U.S Labor Market Statistics http: www.doleta.gov) The unemployment rate was 5.6% in July 2004, and has remained greatly unchanged since December 2003. There were 8.2 million unemployed persons. Sector wise unemployment also was relatively stable. (Source: Employment Situation Summary http: www.bls.gov/news.release/empsit.nr0.htm)

The airline industry was the most hit, with a 20% job cut across the industry post 9/11.
Employment in law enforcement and security however increased. Between 50,000 to 60,000 additional workers were hired at Airports across the U.S.- from baggage handlers to security guards. The insurance, real estate, finance and travel and tourism industries also suffered. Information Technology firms hiring overseas workers reduced hiring 50 percent.

The list of job cuts was starting to get lengthy prior to the September 11 tragedy. In the wake of the World Trade Center and Pentagon attacks, the layoff list continued to grow at an even faster rate. Some of the top names in American and international business earned a place on the lay-off list including IBM, Nokia, Charles Schwab, Mitsubishi, Motorola and Sprint. Bankruptcy filings also read like a corporate "Who's Who" list - U.S. Airways, Kmart, Polaroid, Enron, Global Crossing, and Adelphi Communications. The long list of companies that filed for bankruptcy in 2002 crossed a wide spectrum of industries.

FUTURE OUTLOOK:

Despite today's gloomy job market, there is some hope for the future. The Bureau of Labor Statistics projects an increase of 15% in total employment between 2000 and 2010. This means an increase in over 20 million jobs. The fastest growing sectors are Professional and Related Occupations and Service Occupations. Eight out of the ten fastest growing occupations are computer related.

There are still good companies to work for. Some of the largest corporations are stable and continuing to grow, while small employers can offer excellent employment opportunities. According to the U.S. Small Business Administration, over 99% of the country’s employers are small businesses and they employ more than half of the private workforce. Some of these small firms may be in a better position to hire during a down market, because some might have a business plan so compelling that they can succeed despite the overall economic slump. While others may be operating in a rapidly growing niche, which is prospering despite a general recession.

Source: After 9/11: The Job Market (http: jobsearch.about.com)

THE GLOBAL PERSECTIVE:

On a wider, worldwide scale, as more countries move under the banner of WTO, new challenges emerge for the labor market and the economy. Protectionism vs. Free Trade is one of the quandaries for poorer nations that need to stabilize their economies. Will cheap labor available in South Asia displace the workers in the USA? Will multinationals close up in US and relocate to cheaper countries? It is already happening, as many corporations have outsourced their factories, e.g. Nike, finding alternative sources of cheap labor in countries where the work laws are a lot less stringent than in the USA. A recent example is that of some Silicon Valley firms that have chose to relocate some I.T facilities to Bangalore in India.

The availability of worldwide jobs via the Internet, issuance of work visas and permits, comparison of pay-scales online and the establishment of free trade zones have all served to reduce the entry barriers of the labor market. Under the name of competition and free trade, local talent is being exported.

It has been researched that job reallocation is a constant feature of the U.S market. In fact it is so pervasive that 1 in 5 workers are affected by it on a yearly basis. The reduction in jobs can be Industry Specific, as in layoffs in a particular sector, or as a result of a technological improvement that makes obsolete previous skills. On the other hand, if the reduction in job opportunities is brought about by lacklustre demand , or a rise in interest rates eating into the profit pies of the corporations that then reduce the workforce, the effects are more widespread and more acutely felt.

There has also been a job reallocation across industries, where for example, a rise in the price of oil has contributed to growth of jobs in the petroleum and fuel sector, while at the same time contributing to a fall in the job opportunities in the automotive industry. The responsiveness of a particular industry to a change in exchange rates would depend on its level of exports abroad.