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November 24, 2003
Volume 81, Number 47
CENEAR 81 47 pp. 41-46
ISSN 0009-2347


EMPLOYMENT OUTLOOK FOR 2004

SALARIES & JOBS
Chemists also feel the pain from the depressed national job market; outlook is cautious

MICHAEL HEYLIN, C&EN WASHINGTON

Over the years, trends in the employment status and salaries of chemists have not always strictly followed what is happening in the U.S. job market as a whole.

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PHOTODISC

Unfortunately, however, they have done so since the longest economic upturn in U.S. history finally ended in early 2001 and precipitated the pervasive deterioration of the employment situation that is only today starting to turn around.

As of March 1, unemployment among American Chemical Society members in the domestic workforce was at 3.5%. This is a record high since the society started measuring the employment situation of its members annually more than 30 years ago (C&EN, Aug. 4, page 37). Two years earlier, unemployment had been at an essentially full-employment level of 1.5%.

Despite this weakness, the median salaries of chemists with full-time jobs have continued to post respectable, if gradually declining, gains. The median base full-time salary for all society members responding to this year's survey, $80,000, was 4.6% higher than the $76,500 for the year-earlier survey (C&EN, Aug. 4, page 37). This gain compares with an inflation rate of about 3.0%

As of October 2002, 2001–02 bachelor's and master's chemistry graduates were having a harder time finding full-time employment than had their predecessors from the year-earlier class, according to the latest annual ACS survey of new chemistry graduates (C&EN, April 7, page 45). And the median starting salaries of bachelor's and Ph.D. graduates were lower than they had been for the 2000–01 class. For Ph.D.s, the dip was to $67,500 from $69,500; for bachelor's, from $32,200 to $31,000.

THE PROGNOSIS FOR CHEMISTS The salaries of chemists who have jobs and hold on to them will continue to increase at a higher-than-inflation rate during the next year. The outlook for starting salaries for new graduates, which are generally more sensitive to the supply-demand situation, is less sanguine. If demand remains weak, starting salaries could well dip again. The survey of 2002–03 graduates is just getting under way.

As to the employment outlook, the level of activity at ACS's employment clearinghouse at this year's fall ACS national meeting in New York City indicated a still-soft job market. Prospects for recruiting remain tepid (see page 35). On the somewhat brighter side, the volume of classified advertisements in C&EN--an excellent current indicator--is showing the first signs of an upturn from a steep decline over the past three years.

The chemical community should not expect too much of the coming year, even if the gross domestic product continues to show sturdy advances. It has been growing since the fourth quarter of 2001 at a generally increasing pace. It was at a quite strong annual rate of 3.3% in the second quarter of this year and spurted to 7.2% in the third quarter.

One reason for caution is the likelihood that the bulk of any overall payroll growth will be in areas that do not employ many chemists. Another is the discouraging experience of the slow response of chemists to the 1993–2000 economic boom. As late as 1996, their unemployment rate of 3.0%, as measured by ACS, was very close to the then-historic high. It finally fell to the 1.5% level just as the boom finally came to an end.

OVERALL EMPLOYMENT SITUATION According to the Bureau of Labor Statistics (BLS), the number of people on nonfarm payrolls is in the early stages of recovery from an unprecedented 29-month decline that cut them from a high of 132.6 million in February 2001 to 129.8 million in July 2003.

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Since then, through October, payrolls have risen by 300,000. But they still remain 2.4 million below the 2001 high that was reached after a record 115 months of growth. The ninth such job upturn since World War II, this prolonged upsurge boosted payrolls by a record 24.3 million, or 23%.

Before the latest drop, the previous longest decline had been 17 months. This happened twice: in the late 1940s and starting in mid-1981. The previous longest boom was 110 months in the 1960s.

For the earlier eight boom-and-bust cycles--as measured by the number on payrolls--the bust phases of declining employment averaged 12 months. After these lows, it took an average of another 10 months to regain the previous high and start moving into new high ground. The average boom phase was 56 months.

Overall, the payroll trend since World War II has been consistently upward. But it has been stepwise. Each gain has been larger and longer than the preceding decline. These payroll data are based on information gathered by BLS each month from employers.

Today, the most optimistic scenario is that the current payroll loss will be regained by late 2004. Even this recovery would mean close to four full years with no gain. The previous longest hiatus in job creation had been just over two years.

Over the four years from 2001 through 2004, the civilian labor force--the sum of those employed plus those unemployed but actively seeking employment--will grow by 4 million to 5 million. To date, most of the increase has gone to swelling the ranks of the unemployed from the low of 5.6 million in late 2000 to 8.8 million as of last month. Civilian labor force numbers are determined by BLS from data gathered each month by the U.S. Census Bureau from 60,000 households.

The employed figure obtained this way is always higher than the nonfarm payroll figure. Today, it is at 138 million, compared with the 130 million on nonfarm payrolls. This difference is because the number employed includes farm workers and the self-employed, as well as those who may not appear on a payroll, such as workers with casual day-to-day jobs.

These household data on employment closely follow the same post-World War II pattern of nine boom-and-bust cycles as the payroll data. They indicate a sharp 1.6 million decline in jobs during the first 12 months of the latest downturn followed by a slow recovery to move into new high ground last month. This puts the recovery in total employment at least a year ahead of such a recovery for payrolls.

One explanation for the discrepancy is that many of those who have lost their payroll jobs since 2000 have found other employment that is of lower caliber with lower pay and less likely to show up on a payroll. Also, the growth of the civilian labor force tends to slow down in tough times because increasing numbers of frustrated job seekers give up and drop out of the job market altogether.

The negative employment trends since 2001 are reflected in a recent Census Bureau report that median household money income fell 1.1% in real terms from 2001 to 2002. And the official poverty rate rose from 11.7% to 12.1%. This increase is countercurrent to a long-term downward trend.

The very recent jobless economic recovery now under way is unique. The speed with which the current payroll deficit will be regained remains an unanswered question. Perhaps more important is the issue of whether the job market in the U.S. is undergoing profound structural changes with long-term implications that may not be good for those who work for a living.

MANUFACTURING JOBS Of particular concern to chemists is the large decline in manufacturing jobs in the U.S. Today, 54% of respondents to ACS's member survey work for companies that make things. And this figure is not going to decline anytime soon because 60% of those under 40 years old do so compared with 52% of those 40 and older.

Payrolls for all manufacturing industries increased from 16.8 million to 17.2 million between the end of 1992 and the end of 2000--the core period of the last boom. Since then, they have fallen by a startling 2.6 million or 15%. And they are still declining.

Part of this fall has been due to continuation of long-term downward trends for some older industries. For instance, textile mill payrolls fell by 23% from 1992 to 2000 and by an additional 31% since. For primary metals, the corresponding declines are 2% and 23%.

However, payroll meltdown has also hit some of the big growth activities of the 1990s. Payrolls for the semiconductor/electronic equipment enterprise rose by 37% from 1992 to 2000 and have fallen by 34% since then. On the same basis, computers and electronic products showed an 11% payroll gain followed by a 26% drop. For data processing, the pattern is a 96% upsurge from 1992 to 2000 followed by a 17% decline. Air transportation payrolls have also been hard hit--up 21%, then down 21%, over the same periods.

For the chemicals category, 1992 to 2000 brought a gradual 5% payroll decline from 1,028,000 to 975,000, or about 7,000 per year. This has been followed by a further 6% drop to 909,000, or about 22,000 per year.

Employment in the service industries, by far the largest source of jobs, has at least held steady since 2000, as have jobs in construction. But this isn't saying a great deal. Payroll gains between 1992 and 2000 had been 21 million, or 24%, for the service industries and 2.2 million, or 47%, for construction.

The only major activity with a solid payroll gain since 2000 is health care, up 8%. And despite the proclaimed end to big government, total government employment is up 3% since 2000, with federal employment rolls also up by 3%.

CHEMISTS' SALARIES The most solid and consistent data on salary trends from ACS's annual surveys of its members come from answers to the question that asks respondents who have been with the same employer for their salaries as of both March 1 of the current year and March 1 of the previous year.

This approach avoids the inherent uncertainties of determining year-to-year salary increases as the difference between medians derived from two surveys conducted a year apart and with different member samples. A median salary is that which is exceeded or equaled by one-half of respondents.

This measure of salary gains for individuals indicates that they have held up fairly well during the current tough times. But there has been some weakening. The percent of respondents reporting that they received a salary increase fell from 87% in 2001 to 85% in 2002 and 81% this year. The size of the median gain for those who received an increase also declined--from 4.9% to 4.8% to 4.2%--over the same periods. If those who did not get a raise are included, these medians fall to 4.3%, 4.2%, and 3.5%, respectively.

All of these increases are well above the rate of inflation. This result is as it should be because gains measured this way include not only the impact of inflation but also advances based on the jobholder's growing experience as well as from promotions.

Over the past 10 years, the median salary of all respondents to ACS's member surveys as a group--not just those with the same employer--has risen from $56,000 in 1993 to $80,000 for this year, a 43% gain. The Consumer Price Index for all urban consumers rose 28% over the same period. This would suggest a major real gain of about 12% for chemists. This gain is illusionary, however, because the median age of survey respondents rose by about four years over the period.

For a population as large and well established as ACS's working members, year-to-year median salaries for the entire group would be expected, barring some aberration, to rise closely in step with inflation. After correcting for the growing median age, this seems to be the case.

CHEMISTS' EMPLOYMENT STATUS Ironically, it was the shortest and mildest of the payroll downturns that had the most devastating impact on the chemical community. It lasted for eight months during 1970, and it brought only about a 1 million job decline that was quickly recovered.

However, this retrenchment came after the chemical enterprise had been riding especially high throughout the 1960s, the age of plastics. Big layoffs and a sharp drop in hiring by the chemical industry and academia hurt the chemical community particularly badly.

Although the unemployment rate among chemists is now higher than it was in the aftermath of this 1970 downturn, chemists overall seem to be faring less badly than they did then. For instance, unemployment among government and academic chemists remains low, 1.0% and 1.1%, respectively. However, the greater vulnerability of industrial chemists rears its head with an elevated average 4.5% unemployment rate.

The nature of the industrial job market for chemists has changed since the 1970s. At that time, long-term, even lifetime, employment with a single chemical-related employer was more the norm than it is today. The market is broader now, with more opportunities for chemists in a variety of multidisciplinary areas. This leads to more flexibility, higher turnover, and an inherently somewhat higher rate of unemployment.

In this year's member survey, the percentage of respondents holding other than a full-time job is 7.9%, with 3.0% working part time, 1.4% on postdocs, and 3.5% unemployed. This total is lower than the 8.9% in 1995 when 2.7% were working part-time, 3.6% were on postdocs, and 2.6% were unemployed. The apparent large drop in postdocs is probably not real and raises the question of whether relatively fewer postdocs are becoming full ACS members.

As has always been the case, women chemists are more likely than men to be employed part-time. This year, 5.4% fall into this category, compared with 2.2% who are men. Also, women are more likely to be postdocs than are men, 2.0% compared with 1.2%. This is partly due to women, as a group, being five years younger than men and hence more likely to be of postdoc age.

THE SURVEYS The two annual ACS salary and employment surveys--of ACS members and of new chemistry graduates--fall under the purview of ACS's Committee on Economic & Professional Affairs. Since 1995, the surveys have been conducted by Mary W. Jordan, workforce specialist for ACS's Department of Career Services. She was assisted by research associate Janel Kasper-Wolfe.

The member survey is normally based on responses to a questionnaire sent to a random sample of about 20% of the nearly 100,000 ACS members who reside in the U.S.; are under 70 years of age; and are not in the emeritus, retired, or student membership categories. Once every five years, the entire population is polled. The response rate is typically somewhat over 40%. For this year's survey, 8,265 working chemists responded.

Responses for chemical engineers were too few for extensive analysis. However, they are apparently somewhat better paid than chemists and more likely to work for industry.

The latest survey of new chemistry graduates garnered 2,559 usable responses.

More tables on salary and job trends


DEMAND
With the slow economy persisting yet another year, unemployment for chemical scientists is high and demand is soft. New graduates can expect a long job search and fewer offers, but some companies are hiring.

SALARIES & EMPLOYMENT
Unemployment among American Chemical Society members in the domestic workforce is 3.5%. This is a record high since the society started measuring the employment status of its members annually more than 30 years ago. Salaries continue to make steady gains.


HIGH SCHOOL TEACHING
Becoming a high school chemistry teacher is a great choice for a chemist with an advanced degree, and a few are taking that option, sometimes as a second career. These workers can help fill a need for qualified science teachers that is expected to skyrocket with impending retirements.

FIRST JOB IN INDUSTRY
Graduate students, freshly minted Ph.D.s, and postdoctoral fellows are all vying for the few open positions in industry. Find out what industrial employers are looking for and how applicants can get noticed.

CAREER PLANNING RESOURCES
A guide to sources of job and career information designed for those in chemical and related sciences who are seeking industrial, academic, or government positions or looking to change careers. Online resources for scientists are highlighted, as are American Chemical Society career services.
RESOURCES FOR FOREIGN NATIONALS



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