cult to think of more compelling evidence that the nature of the employment relationship has changed than this.

Perhaps the most telling change in the employment relationship has been the reduction in white-collar and management jobs, which were traditionally the most protected. The 1996 American Management Association survey finds that, although salaried employees held roughly 40 percent of all jobs, they account for over 60 percent of all the employees cut. The number of supervisory employees eliminated as a percentage of all employees that were cut doubled between 1990–1991 and 1993–1994 to 26 percent (Rousseau and Anton, 1991). The rate of displacement was actually higher for managers in the 1980s than for other occupations, controlling for other characteristics (Rousseau, 1995). It rose sharply through the early 1990s but appears to have declined somewhat from 1993–1995 (Farber, 1997), perhaps simply because of regression to the mean.

The "churning" of the workforce—hiring and laying off at the same time—had the biggest negative effects on middle management: three jobs were cut for every one created. These are the positions that are the most entrenched within the internal employment system. Professional and technical jobs, in contrast, benefited from it: five new jobs were created for every three cut. These jobs have the skills and responsibilities that translate easily across organizations. The changes associated with churning in some cases go beyond simply rearranging which employees hold permanent jobs. A survey of 500 human resource executives whose companies had downsized found that a third refilled at least some of the positions that had been cut but that 71 percent did so with either temporary or contract workers (Lee Hecht Harrison, 1997).

But large employers of the kind represented in the American Management Association surveys account for only a modest percentage of total employment in the economy. Many workers were never employed in internal labor markets with prospects of job security. During the course of the 1980s and especially the 1990s, a widespread perception developed that the employment relationship had changed in fundamental ways. A steady drumbeat of stories in the media fed the perception that employers were less attached to their employees. The overall theme is summed



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