When his position at a mid-size bank was eliminated during the economic doldrums of the early 1990s, Richard Coss Jr. reacted by striking out on his own as a consultant.
Even with a knack for numbers and a Duke University MBA, it still took him more than a year to land a regular job with Pittsburgh banking giant PNC Financial Services Group Inc. He ultimately was named an $80,000-a-year vice president.
But no sooner did the economy slip back into recession early last year than Coss was out again. And this time, the consulting has been harder to come by. Eighteen months after he was laid off, Coss, his wife, Janet, and their three children get by on $450 a week in unemployment from Pennsylvania and gifts from his retired parents.
"Sometimes I get down on my knees and pray because I don't know where this is going," said the 48-year-old Coss.
Through technological breakthroughs, seamless global connections and advances in management techniques, the American economy seems to have gotten away from the boom-bust business cycles of old. Recessions are shorter and expansions longer.
But these positive developments, a growing number of economists believe, have come with a troubling cost: lengthier, more debilitating spells of unemployment for many of those who do lose their jobs.
"It used to be that people entered and left the labor force fairly easily," said University of Chicago economist Robert H. Topel. Now, he said, in a remark about low-skilled workers that seems equally applicable to many higher-skilled ones, "leaving the labor force is like death: You go and you never come back again."
When the trend emerged in the early 1990s, it quickly was dubbed the "jobless recovery" and subjected to intense scrutiny. Did employers' reluctance to add to their payrolls mean that they no longer were willing to provide the amount — and quality — of work they once did? Did the brutal demands of global competition spell an end to good jobs at good pay in America?
Then along came the boom of the late 1990s — with its spiraling stock prices and tumbling unemployment rates — and all worry of a jobless recovery seemed to vanish.
But the problem did not go away. As the economy moved through its latest recession and now finds itself in a weak recovery, many of the patterns of the early '90s are reasserting themselves, distinguishing the two recent periods from every other recession and recovery of the last half-century.
"This is not your parents' business cycle," said Goldman, Sachs & Co. economist Ed McKelvey. "The economy is on a very different path than a generation ago."
Just ask Coss' father, Richard Sr., a retired union machinist who had been forced to go part time when work slowed down but never suffered a layoff in his nearly four-decade career. Watching his son go through a long bout of unemployment has been hard on the elder Coss.
"I don't really know what's going on in the working world as far as jobs go," he said.
It's no wonder. Until the last decade, American employers leaped at the chance to rehire the minute a recession was over. Government statistics from the late 1940s through the late 1980s show that in the first year of a recovery, U.S. payrolls typically grew by a quarter of a percentage point — in today's terms, more than 300,000 jobs — a month.
By contrast, companies greeted the end of the early-1990s recession by cutting, rather than adding, several hundred thousand workers in the first year. Since January, when the most recent recession is thought to have ended and the economy began growing again, payrolls have slipped by 17,000.
In addition — and perhaps least noticed of the recent changes — the average length of time that people who lose their jobs are out of work has been creeping steadily upward.
For much of the post-World War II era, average time out as measured at the peak of expansions was eight weeks, according to Labor Department statistics. But by the start of the early-1990s recession, it had reached 12 weeks, and it never fell below that level even during the most fevered moments of the subsequent boom.
During the 2001 recession, the figure hovered around 13.5 weeks. And in September, eight months after the presumed end of the recession, it stood at 17.8 weeks.
Some analysts have suggested that the increase is the product of changed behavior by certain subsets of the work force. Women, for instance, tended to give up trying to find jobs when they were laid off; as a result, they weren't included in calculations of the average length of unemployment spells. Now that they are full-fledged participants in the labor market, they keep looking when they lose jobs, and so they push the average up.
But beyond such specific patterns lies a fundamental shift in the nature of work and unemployment: Pushed by competition and freed from the restraints that a strong union movement used to impose, companies are much more likely than they were a generation ago to respond to economic trouble by eliminating jobs permanently.
As a result, American workers, who once could be confident that a layoff meant little more than an interlude between jobs, can no longer be so sure. That is especially true for unskilled blue-collar workers but increasingly true for college-educated managers.
"If you lose your job today, you're likely to be out longer than in past decades," said Robert G. Valletta, a senior economist with the Federal Reserve Bank of San Francisco who has studied the issue. "If you are a white-collar, managerial worker, the increase is likely to be particularly pronounced."
The growing length of unemployment suggests a different — and decidedly darker — picture of the economy from the conventional one. In the conventional view, the overall economy has demonstrated its remarkable resilience by continuing to expand despite terror attacks and a stock market slump. The unemployment rate, now at 5.6%, remains relatively low. (The government's jobless report for October is scheduled to be issued today.)But some are beginning to doubt whether analysts are zeroing in on the right factors.
"We have spent a great deal of time focused on how low the unemployment rate got and stayed, without focusing on how long those who are unemployed are out," said former Bureau of Labor Statistics Commissioner Katharine G. Abraham. In doing so, she believes, "we may have overstated the strength of the U.S. economy."
In and of itself, lower unemployment has widely been considered one of the great accomplishments of the economy in recent years. But the ever-lengthening duration of unemployment poses a dicey problem for working people, scrambling the odds that they face in trying to achieve some measure of financial security and affluence.
"What we're in effect doing is offering people a devil's deal," explained MIT economist Paul Osterman. "We're saying, 'We'll reduce the chance of your becoming unemployed, but if you're one of the unlucky ones who loses their job, then the consequences will be very serious.' "
In that wager, Richard Coss Jr. has definitely come up short.
The only person more surprised than Coss is his father. The difference in the two men's work lives is a measure of the chasm that divides the old business cycle from the new — the old social contract between employer and employed from the current one.
"I guess it must be pretty hard right now," said 72-year-old Richard Sr.
The father went to work out of high school as a grinder at Landis Machine Co. in Waynesboro, Pa. He made only two moves in his career. One was to join his parents and a brother in buying a Laundromat to run as a side business. The other was to leave Landis for better pay at the Mack Truck plant.
He worked at Mack for 26 years on the same grinders he had operated at Landis. There were slack periods but — thanks to the power of the United Auto Workers — no layoffs. In his top year, he made about $40,000.
"We didn't have a big life," said his wife, Iolene, a school secretary. "But I can't remember where we were ever really hard up."
The younger Coss was the eldest of the couple's three sons. He was good in math, interested in the Civil War and fascinated by politics. As a grade-schooler in Maryland, he would "know the governor of California," his mother marveled.
Beyond that, the parents did not know much about their son's ambitions. But they knew one thing: He and his brothers were going to college. The father's explanation comes straight from the playbook for the American dream: "I hoped they'd get better-paying jobs and live a better life than I had."
In fact, higher education has delivered on half the promise for the younger Coss and his generation of white-collar workers: Government statistics show that they make on average 125% more than their high-school-educated parents and contemporaries.
But the calculus has gotten considerably more complicated when it comes to the question of better, more secure lives.
In Coss' case, the combination of an MBA and the choice of a career in banking appears to have delivered the very opposite of security; it has thrown him into virtually every financial maelstrom of the last two decades.
His first job out of Duke was with Pittsburgh-based Mellon Financial Corp. But he was laid off in 1987 when the bank suffered losses in the Texas oil-patch fiasco. He helped start a consulting business for Bryn Mawr Trust Co. in 1990. But he was forced out two years later when the bank eliminated that business in coping with real estate loan losses during the early-1990s recession.
In his eight years at PNC, Coss rose to become the "product profitability" director of the bank's business loan unit, responsible for deciding which services were moneymakers and which were losers. But his job was cut in March of last year, the month the latest recession began, when the bank launched a new — and thus far disastrous — strategy of forsaking traditional lending in favor of fee services such as back-office processing, which tanked with the economy.
"Timing is everything in this life, and PNC couldn't have gotten it worse," said Gerard Cassidy, a bank analyst with RBC Capital Markets.
By contrast, when Mack Truck ran into trouble in the late 1980s, Coss' father took early retirement with union-provided pension and health benefits.
"It certainly hasn't been what I expected," the younger Coss said of his career.
Nor has it been for much of the rest of white-collar America. In the early 1990s, and even more strikingly over the last two years, college-educated professionals and managers — who once were essentially immune to economic dislocation — have borne much of the brunt of the downturn.
Since the start of the year, the number of unemployed unskilled blue-collar workers has fallen by 181,000, or 10%, while the number of unemployed white-collar managers and professionals has risen by 129,000, or 10%.
Some commentators contend that the comparatively even distribution of job losses among income and education groups in the last two recessions represents a sort of democratization of economic pain and therefore is beneficial. But it also means that what has long been considered the most powerful method for wage earners at all levels to improve their economic lot — getting a better education — is no longer a sure thing.
"There's no question that more education mean higher earnings," said Jared Bernstein, an economist with the Economic Policy Institute, a generally liberal Washington think tank. "But what the last two business cycles show is that white-collar, college-educated workers are vulnerable to unemployment, and protracted spells of unemployment, in ways they once weren't.
"Their education no longer inoculates them from trouble."
Like many white-collar workers, Coss left PNC with six months of severance pay and a fistful of job leads. But he has since discovered that he is surprisingly vulnerable.
As the severance money has run out, he has been forced to depend on an unemployment compensation system designed for a bygone industrial age and factory workers such as his father. Though the system is intended to replace about half a jobless worker's wages, in his case it is replacing only a fifth. Though it was set up to handle short stints of joblessness, his time out of work is proving anything but.
As most of his leads for permanent employment dry up, Coss has been forced to rely on lucrative but temporary consulting gigs. He made $25,000 in 10 weeks with his old employer Mellon last fall. But such assignments are sporadic at best.
Coss said the prospect of more such work is a key reason he hasn't taken a job at Wal-Mart or behind the counter of a local dry cleaner. Still, when further assignments have fallen through, he has had to dig into savings and rely on gifts. The elder Cosses recently gave the family a 1991 Chevrolet sedan to help extend the life of its two cars.
Meanwhile, Coss' unemployment — and his decision not to take a low-level job — is causing quiet consternation on the part of his parents.
His mother worries for her son.
"He's a good person. He's an intelligent person," Iolene Coss said. "He needs something to show his intelligence and that he's a good provider, and to keep up his self-esteem."
His father edges toward criticism. "If I'd have gotten laid off," he said, "I don't think I could have stood being out the way he has. I'd have gone out and gotten something."
Yet the elder Coss acknowledges that he has never said as much to his son or even spoken much about the younger Coss' predicament of being well-educated and out of work for so long. "What do you say?" the father asks. " 'Well, did you get anything?' "
The answer, as he very well knows, is: Not yet.