The Job Freeze

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FOR MORE THAN A YEAR, THE U.S. has been tantalized by tidings of economic recovery. And now those esoteric leading indicators that so hearten the experts are becoming visible to average workers: consumers are buying, and the economy is growing at a steady, if unspectacular, pace. Yet something important is missing as President Clinton prepares his prematurely overdue economic plan: new jobs.

In spite of the good news about the economy as a whole, most large corporations prefer almost any alternative to hiring new full-time employees. Not only do they have painful memories of the recent recession, but they now face runaway costs for health care and other benefits that often make it prohibitively expensive to expand their work force. The same companies are being squeezed even tighter by global competition, which has made cost cutting and downsizing -- on a permanent basis -- a way of life.

"There is almost a paranoia about creating new jobs in large corporations," says David Orr, a managing partner for the outplacement firm Jannotta, Bray. Concurs Audrey Freedman, president of the Manpower Plus employment-consulting firm: "Companies are about as glad to see a new worker in their ranks as impoverished families are to add another plate to their table."

Even companies who want to hire say they are constrained by doubts about the recovery. "This recession has had nine lives, and we've already seen a number of false starts," says John Roach, chairman of Tandy Corp., which owns the Radio Shack electronics stores. "Actual growth in jobs will require a stronger rebound in the economy than there seems to be right now." At lumber giant Georgia-Pacific, hiring plans have been shelved despite forecasts of increased homebuilding in 1993. "Consumers would have to come back after the Christmas buying binge and show continued confidence," says president A.D. Correll. "We would have to see some real economic growth."

That is particularly alarming because no matter what policies the new Administration pursues, the fate of the recovery will ultimately rest on the willingness of companies to start hiring again. So far, the outlook seems stubbornly dim. A recent American Management Association index of the hiring plans of 785 companies stands at a dismal 9.6 on a scale of 100. A growing economy would normally produce an index at least in the 30s. "This recovery will be limited to fewer jobs and lower incomes than at any other time in the postwar period," says Lawrence Mishel, research director of the Economic Policy Institute in Washington. "Many Americans may not feel they are in a recovery at all."

Instead of hiring, such giants as IBM, General Motors, United Airlines and Eastman Kodak are still slashing their payrolls. And dynamic small start-up firms -- which created 20 million jobs in the 1980s -- have faced a lending crunch that denies them the capital they need to grow and add new jobs. All that has left the health-care and temporary-help industries as the chief source of hiring since the recession officially ended in March 1991.