|The Fall and Rise of Economists|
|Key Words||Forecasting, Cost-cutting, Consolidation, Pay, Layoffs|
Although the economy is faring well, economists are being laid off. First, it was manufacturing firms like DaimlerChrysler and IBM that cut back. More recently, it has been firms in the finance sector. BankAmerica Corp. has closed its 21-member economics department, and Nikko Securities and Citibank lost their economics departments when they merged with Travelers Group Inc.
Companies no longer need general economic forecasting. Most executives are aware of economic trends, especially given the abundance of information available on the Internet. Besides, economists were never perfect forecasters anyway, failing to predict the oil crises in the 1970s and the steady growth of the 1990s. Not surprisingly, they have fallen victim to cost-cutting efforts. Also, as companies have consolidated, they have eliminated duplicate positions, including economists.
However, people with economic training are finding other positions and their pay is continuing to rise. Consulting firms now hire 19 percent of economists, compared to 8 percent in 1978. Manufacturing firms' hiring has fallen from more than 25 percent to 7 percent. Also, the word 'economist' is less likely to be in the job title.
(Updated July 1, 1999)
|Source||Tristan Mabry, "Companies Are Laying Off Economists," The Wall Street Journal, April 29, 1999.|
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