John Challenger first became an economic indicator in January 1993.
Sears had just announced plans to lay off 50,000 people, and IBM would soon announce the first round of layoffs in its entire history.
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"It was lucky," he recalled. "Everybody was writing stories about it. Every reporter needed to hang their stories on some data. But there wasn't any data, so they called us."
Challenger, 56 years old, is chief executive of Chicago's Challenger, Gray & Christmas Inc., which bills itself as the nation's oldest outplacement firm. His team is often the first to arrive at the scene of a mass layoff, aiding the wounded with everything from counseling to job-interview coaching.
His firm had been quietly tracking layoff announcements for years because they were its lifeblood. But once quoted in the press, the Challenger, Gray & Christmas job-cuts report became an official staple of our nation's economic news.
"IBM was the epitome of lifetime employment," Challenger recalled.
It was obvious the long-implied contract between America's biggest companies and its upwardly mobile work force was broken. From here, boom or bust, nobody could expect to stay in one place for long, except for maybe Challenger.
Challenger, a compassionate and thoughtful man, bristles at suggestions that the worse things get for America's workers, the better things get for him.
"That's like a hospital saying it's good when more people come in," he said during an interview in his corner office, 28 stories above the Chicago River.
But it is good, I tell him. Health-care executives know that the Baby Boomers' slow-but-certain die-off, while not pleasant to think about, is a growth industry from here. And just watch the stock price of any company announcing massive job cuts--it often rallies like the company has just reported its greatest news in years.
In 1962, when Challenger's father, James, started the storied outplacement agency, companies usually didn't cut as deeply as they do today. And when they did, they didn't often hire outplacement consultants to comfort the casualties.
Challenger grew up along Chicago's affluent North Shore, went to Harvard University to study history and eventually settled into his father's antique desk, where he's dealt with the realities of job loss every day.
"It's an injury," he said. "When it happens, people are not surprised, but they are shocked. They've been hoping against hope that it wouldn't happen. And they may have been working really hard to ward it off."
The first step is often the hardest, helping those who've lost their jobs explain to their friends and families what happened. From there, it can be a painful crawl back to employment, taking months or sometimes even more than a year.
I dropped in on Challenger after reading many bullish reports of a comeback in the job market--even in manufacturing. I wanted to hear what he had to say, his ears so close to the ground. And despite the ever-improving jobs numbers, and growing enthusiasm for what appears to be a more certain recovery, Challenger told me he isn't expecting a decline in business any time soon.
He recently landed his first-ever defense contract, helping 3,000 mid-career Navy personnel come home as the U.S. armed services draws down their forces. Many of these folks have never worked as civilians, but the government has invested in heavily, training them as welders, machinists and pipefitters and other skilled tradesmen. Clearly, they should be put to productive use, somewhere.
"Hopefully, we as a society will treat them more like the vets who came home from World War II and not the vets who came home from Vietnam," Challenger said.
Challenger also notes the Great Recession destroyed 8.5 million jobs, so even as economists cheer consecutive monthly gains of more than 200,000 jobs, progress is sadly incremental.
"It's a slow digging out," he said. "An unemployment rate of 5% or 6% is still three years away if the economy continues along its current path."
Despite the gains, there continue to be cuts as well. The latest Challenger report shows U.S. employers announced 51,728 job cuts in February, down slightly from 53,486 in January. What's alarming about this latest report, though, is that companies making consumer products have been announcing the most cuts--taking the lead from downsizing governments.
"We've seen a couple false starts," Challenger said of the recovery, "so we may slide back into neutral again."
But if not, Challenger will still be busy.
(Al's Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. Contact Al at email@example.com or tellittoal.com)
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