Chemical & Engineering News

June 23, 1997

Copyright © 1997 by the American Chemical Society

EMPLOYMENT: Still dropping

Mergers, acquisitions, and cost-cutting measures, as well as a continuing drive to operating efficiency , continue to translate into fewer jobs in the chemical sector.

Despite a fairly strong U.S. economy, competitive pressures continue to force chemical companies to find ways to save money - in some cases through engaging outside contractors to do tasks that company employees handled before, such as information services. As a result, chemical companies now retain fewer people on their payroll than they did just a few years ago.

In 1993, employment levels started at 1.084 million, but by October of that year, employment levels began to decline precipitously, with few upward ticks since. In the fourth quarter of 1993, the industry began to downsize in earnest and cut 7,000 jobs between September and December. From the end of 1993 to the end of 1996, employment in the chemical industry dropped by 58,000, reaching 1.016 million, according to Department of Labor statistics.

Every segment of the chemical industry lost jobs from 1993 through the end of 1996. And last year, every segment again lost jobs except for the paints and allied products segment, for which employment remained steady. Most of the cuts have affected white-collar and managerial employees.

And the industry has not spared production workers, although such jobs have not declined as steadily over the past four years as has overall employment. At the beginning of 1993, the industry employed 565,000 production workers. That number peaked in September 1995 at 584,000 - 19,000 more than at the beginning of 1993. However, by the end of 1996, the industry had cut most of that gain, bringing the number of production workers very close to the level at the beginning of 1993.

During the previous four years, the average number of chemical industry production workers wavered - it was 573,000 in 1993 and 567,000 in 1996. Hardest hit was the drug industry, which added 10,000 production workers between 1993 and 1995 and then cut 6,000 in 1996. The plastic materials and synthetics sector dropped 3,000 production workers last year; the soap, cleaners, and toilet goods sector cut 2,000; and the industrial inorganic sector cut 1,000. Other sectors saw no change in average production employment over the year.

Employment at 22 major chemical companies (page 64) mirrored the trend evident in the Department of Labor's statistics between 1993 and 1996, but bucked the overall trend in 1996. With fewer employees on the payroll over the longer term, however, companies were more productive and the average sales per employee rose. Between 1993 and 1996, total employment at the 22 companies dropped from 300,300 to 263,500, but employment rose 2% last year from 1995.

Last year's increase in employment resulted partly from a boost in companies' investments overseas, and so the number of employees outside the U.S. rose in proportion to the number of U.S. employees. Praxair raised employment levels through significant investment overseas, but mostly when it absorbed CBI's Liquid Carbonic unit and gained those employees. Business combinations also figured into employment increases for Crompton & Knowles (which acquired Uniroyal) and Betz Laboratories (which acquired Dearborn from W.R. Grace and became BetzDearborn).

On the other hand, sales of businesses and employment reduction efforts tempered the overall increase in employment for the group of 22 companies. Olin spun off its ordnance and aerospace divisions and sold its isocyanates business to Arco Chemical; Grace continued to sell health care, biotechnology, and other "noncore" businesses; and Witco sold its petroleum-related businesses and began an effort to consolidate the number of its operating facilities.

INDUSTRIAL EMPLOYMENT: Chemical segments continued employee losses in 1996

EMPLOYMENT OF WOMEN: Share of jobs in chemical industry has risen over decade

WORKWEEK: Both overall chemicals and all manufacturing unchanged in 1996

PRODUCTION WORKERS: Chemical industry cut 2% of jobs last year

CHEMICAL EMPLOYMENT: After six-year decline, jobs at major firms rose 2% in 1996

WAGES: Weekly earnings rose last year for all categories of chemical production workers

PRODUCTIVITY: Jumped last year