A year ago, Jose Carlos Cavazos was enthusiastic about his new career in telecommunications and his position with Nortel Networks. Now he's throwing mail on the night shift at a U.S. Postal Service distribution center for $13 an hour.
Cavazos didn't plan to go from high-tech to blue collar. But after eight months without a job, the 37-year-old Raleigh, N.C., resident had burned through his 401(k) savings and was nearing the end of unemployment insurance. He took the postal job to pay the mortgage--even though it leaves him wanting professionally.
"My daughter came home yesterday with a group homework assignment and I had to write a paragraph about what I do for a living," said Cavazos, who has a bachelor's degree in mechanical engineering from Texas A&M University and a master's of business administration from Pfeiffer University. "Here I am throwing mail with an MBA. I was totally embarrassed. I'm just grateful that my daughter is still too young to understand how tough this is for me."
Cavazos isn't the only technology worker who has joined the ranks of the gainfully underemployed. According to the Bureau of Labor Statistics, the unemployment rate in the United States was 5.6 percent in January--relatively low for a recession, which typically generates unemployment rates of 8 percent or more in the United States.
But hidden behind the not-so-grim unemployment rate is a harsher reality: Many workers are waiting out the downturn in jobs that are far below their previous salaries or professional aspirations.
Reliable statistics on underemployment are difficult to find, in part because the government doesn't discriminate between people who have jobs and those who have jobs below their skill set. But underemployment seems to be a particular problem for technology workers. Like Cavazos, many laid-off techies are resorting to manual labor, while others are hunkering down to hourly retail jobs, trying their luck on game shows or settling for contract work without benefits.
Human resource experts say the underemployment trend in the current economic cycle is just starting to emerge. Many workers got the ax when mass layoffs peaked in the summer and fall of 2001, and they coasted on several months of severance and unemployment insurance, which generally lasts six months. With the tech job market still in the doldrums, they're now considering new gigs as waitresses, bartenders, forklift drivers or baby sitters--anything to pay the rent.
"I'm seeing people take jobs they don't want or even like because they're looking for short-term help until the market improves," said Ilya Talman, president of Chicago-based Roy Talman & Associates, a recruitment firm specializing in information technology workers. "They don't feel they have any choice. If they've been out of work for a year, they get desperate."
"Why am I here?"
Juliette Katz spent the past seven years sharpening her resume as a marketing manager at America Online, Food.com and other Internet start-ups. She is versed in programming, account management, and customer acquisition and retention; she has led marketing campaigns for direct mail, trade shows, events, advertising, branding and positioning.
But the 29-year-old San Francisco resident got laid off from a dot-com in December 2000 and spent a fruitless year prowling for a similar job. Katz, who has a bachelor's degree in business administration from San Diego State University, gave up in October and landed a job shelving moisturizer and shower gels for Bath & Body Works in San Francisco.
"At first I was like, 'Why am I here?'" Katz said. She hadn't worked in retail since folding jeans and hanging shirts at Clothestime when she was 18. "I felt like I was in high school again. I felt like I was 16 or 18 again being told how to work, being told how to put lotion on a shelf. And now I have to deal with the public and confront shoplifters--it's almost like I'm a cop. It's a whole different set of issues."
It's impossible to say how long Katz and others will have to endure less-than-ideal jobs. Americans suffered through more job losses in 2001 than any time since 1992, according to Chicago-based job placement firm Challenger, Gray & Christmas. The pace of layoffs has quickened since Sept. 11, with U.S. companies slashing 624,411 jobs since the terrorist attacks.
Jeff Gouda said he'll try to remain patient. The 31-year-old bachelor worked in the late 1990s for Sony and the online divisions of television game shows "Jeopardy" and "Wheel of Fortune." He was also the news director at AOL. But he got laid off from AOL two years ago and hasn't had a full-time job since.
Gouda, who used to produce and write scripts for now-defunct Web soap opera The Spot, got lucky last year and won $100,000 on the game show "Greed." He also doubled a small investment by selling limited-edition Sony Aibo robot dogs on eBay.
But he fears his luck is running out. Last month he moved from a carriage house in Malibu, Calif., to a one-bedroom apartment in nearby Venice. His larger fear is that the best job of his life--writing for The Spot--is behind him, and his career will be a string of boring jobs. As a fallback plan, he's taking a real-estate course later this month.
"I was new in the industry and found something that was really cool. I used my film school abilities and computer skills, and it worked on so many levels for me," he said about The Spot. Gouda attended the School of Visual Arts in New York. "I worry that people aren't willing to finance those kinds of gambles anymore, that people aren't going to have unique pet projects that might be successful. Nowadays, no one's even taking the chance."
Bob Muldoon is also losing optimism. The 42-year-old Methuen, Mass., resident got laid off in April from a quality assurance (QA) job at Tower Street, a software start-up specializing in online quote systems for insurance agents. Muldoon spent several months looking for QA jobs but couldn't get headhunters or employers to return his calls.
"It was quite a contrast from even a year before, when recruiters were swarming like locusts," said Muldoon, who went to prestigious prep schools and has master's degrees from Columbia and Harvard. "This time, the phone was just dead--so much so that I checked the batteries on the answering machine whenever I came home because there were never messages...I was feeling bored, and there was this sense of purposelessness. I had no moorings."
A friend of a friend offered Muldoon a job driving a forklift, hauling mulch and "spraying green slime" for Massachusetts Hydroseed. He took the job in July and has been fertilizing lawns ever since. The job keeps him on a regular schedule, which he deadpans is "better than waking up and picking the lint out of my belly button." But he wonders when he'll snag another white-collar job.
"I'm vaguely looking for another job," Muldoon said. "I'll get a burst of energy and send out a bunch of resumes, and I won't hear anything. It validates the bad perception I had, and I get discouraged again."
From making $100,000 to foaming lattes
Job placement experts say such pessimism is a natural byproduct of underemployment. They say ambitious, career-oriented techies tend to dwell on how they're not using skills learned during graduate school or computer certification courses. But they should congratulate themselves on the fact that they're working at all.
"It takes a huge psychological toll," said Brian Barton, a Silicon Valley outplacement expert who recently published the 20-page High-Tech Survival Guide for laid-off techies. "Imagine making $100,000 a year and then foaming lattes for a living. A lot of these folks really need a pat on the back. They're trying to make a living and they're taking jobs that aren't glamorous, but they've taken the first step."
Less optimistic observers might wonder whether thousands of down-on-their luck techies aren't so much underemployed now but rather overemployed during the dot-com boom of the late 1990s. Barton admits the economic glory days may have heightened expectations to an unrealistic degree.
"There's no question there was a lot of job inflation--the 20-somethings who were VP of marketing and all those people who shouldn't have been CEOs," Barton said. "I don't know anyone right now who doesn't look back fondly to the economic boom. For those riding the wave, it was an incredible ride. Now we're all sitting here in a sea of foam."
Peter Peets has a different take on layoffs. The Chapel Hill, N.C., resident took a job in December 2000 as product manager for software development in a regional office of Cisco Systems. He got laid off four months later in a downsizing that eliminated 8,500 Cisco positions, and he spent the summer fretting about his mortgage and how he'd fund the college education of his three children.
He and a former co-worker decided to create a business proposal "on the side" until they found "real jobs." By September, Peets and Chris Ellis had invested $20,000 of their own money to develop an e-learning product that helps train nontechnical people in the vagaries of telecommunications software and hardware. Peets now works about 75 hours per week promoting his new company, EllisTalks.com.
"I've always had this entrepreneurial spirit in the back of my mind, and I always wondered what puts people to the point where they live their dreams," Peets, 45, said. "It's harder to take the plunge in a secure job. I was winning awards and getting recognition, and I got chicken. But when I got laid off, it was an unbelievable turning point.
"It's not my character to do high-risk things, but the circumstances gave me the courage," Peets said. "There is a silver lining here. I just had to believe in myself, ask my wife and business partner whether they believed in me, and take a leap of faith. Now I'm unbelievably motivated."
Fear, not faith, seems to be an even bigger motivator for many out-of-luck techies. Many equate their underemployment to the ticking of a time bomb: The longer they continue fertilizing lawns or foaming lattes, the harder it will be to leap back into the world of network applications or product management. Many say that even one or two months without a "real job" is something of a blemish on the resume, raising the eyebrows of suspicious recruiters.
Jason Anthony Benavides knows that his computer and networking certifications are becoming staler by the moment, and his dream of networking an entire corporation's computer system is becoming more difficult the longer he remains on the sidelines.
The 30-year-old Lakewood, Calif., resident realized that his network and computer upgrade start-up couldn't generate enough cash to pay his new mortgage in October, so he took a temporary job several hundred miles away cleaning crud from an oil refinery in Richmond, Calif.
The job requires seven-day workweeks and 12-hour days in the refinery's "coker" unit, where residue from distilled coal collects. The cleaning process exposes Benavides to hazardous chemicals, including hydrochloric and sulfuric acid and cancer-causing fumes.
"This is a high-hazard job and I can't do it for much longer," said Benavides, who hopes to relaunch his business, Onsite PC Upgrades, next summer or fall. "I love maintaining and building networks. I have to get back into it soon or it will never happen at all."