Companies Increase Downsizing among Lower Salary Ranks

September 10, 2002 ( - Lower-paid workers have apparently now become the downsizing target of choice in corporate America, an outplacement firm says.

According to the latest Job Market Index from Challenger, Gray & Christmas, workers making less than $50,000 have been 43% more likely to lose their job in a corporate contraction over the last two years. Workers pulling in more than $85,000 have been 23% less likely to get canned in a downsizing.

The survey found that the number for the category of $50,000-and-below grew from 18.9% in the first half of 2001 and 27% during 2002 year to date. Likewise, the number of $85,000-and-below employees fell from 45% to 34.5% during the same period.

Challenger said executives are more likely to turn to a lower paid temp or a contract worker than a full-salary/benefits employee while the economy is still soft.

The shift toward a non-employee workforce will favor the higher paid managers and executives who will probably retain their permanent jobs in such a system, the Challenger report said.