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United States Labor Market Remains Very Strong Continued economic growth has created tens of millions of new jobs in the United States and reduced unemployment to just 4 percent-one of the lowest rates in 30 years. "The job market is Spandex tight," says one personnel expert. "It's hard to hold on to promising workers because other companies have open doors." The tight labor market has forced companies to go out of their way to try to attract and retain workers. At AT&T, for example, 29 percent of managers work at home at least one day a week. At Land's End, the giant mail-order retailer, employees can work flexible hours and send their children to a company-sponsored day camp. The booming economy and tight job market have also raised starting salaries for college graduates to new highs. According to a survey conducted by the National Association of College and Employers, this year's starting salaries for students with bachelor's degrees were $34,356 for accounting graduates, $43,367 for computer science graduates, and $45,045 for electrical engineering graduates. Strong Flexible Labor Markets Are Key to Low Unemployment The key to the low unemployment rate has been flexible labor markets, according to Federal Reserve Chairman Alan Greenspan. In Europe and Japan, workers have more job security than they do in the United States. As a result, it is much more difficult for employers there to hire and fire workers. In contrast, in the United States, companies have much more flexibility to hire and fire workers as needed. This flexibility has allowed U.S. companies to capitalize on the extraordinary technological improvements that took place in the 1990s. The downside to this flexibility is the stress associated with lack of job security in the United States, where many workers worry about becoming obsolete. Judge Orders Break-Up of Microsoft In one of the largest antitrust cases in history, a U.S. federal court judge ordered that Microsoft, the world's largest producer of computer software, be broken up into two companies. Judge Thomas Penfield Jackson ruled last spring that Microsoft had broken federal antitrust laws by using its monopoly power to try to stifle competition in the software market. As a remedy, he ordered that Microsoft be broken up into two companies, one for Microsoft's Windows operating system and another for its Internet and other businesses. Microsoft is appealing the ruling. Workers Demand Better Contracts at Two Large Companies Thousands of workers at Verizon Communications, the nation's leading local phone company, went on strike last summer. The 87,000 telephone operators and line technicians were demanding mandatory overtime, better job security, and reductions in workplace stress. Although phone service continued to be provided to the company's 27 million customers, directory assistance and repairs were affected. At United Airlines, pilots refused to work overtime, after rejecting the new contract proposed to them by management in April. The lack of pilots forced the company to cancel flights, inconveniencing thousands of passengers. United expects to lose as much as $150 million in the summer quarter alone as a result of the work slowdown. Think About It
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