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Minding Your Business: Higher-Paid Employees Endangered

Aired June 23, 2003 - 07:46   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


BILL HEMMER, CNN ANCHOR: From "Sex and the City" to stocks and the city. Andy Serwer is watching it. How are you?
ANDY SERWER, "FORTUNE" MAGAZINE: I'm doing fine.

HEMMER: It's Monday. Workers beware today, huh? What gives?

SERWER: Yes. Well, you know, everyone knows the unemployment rate is ticking up toward 6.1 percent. A lot of people are concerned about their jobs and rightfully so.

HEMMER: Yes.

SERWER: But it might not be the people who think they're worried who should be so concerned. You know, traditionally in these downturns, blue collar people and the last hired/first fired. You always hear of that, right? Well, not so. The white collar woes continuing in this country. We're seeing a new trend, Bill, of people who are making big salaries getting fired and then getting replaced by younger people at much lower salaries.

HEMMER: It's the easiest and quickest way for a company to cut its bottom line, huh?

SERWER: That's right. You take someone making $125,000 and replacing them with someone making $40,000. There's not a whole lot of data out there, but we do have some. Let's check into a little bit here.

Age bias claims are up, from 14,000 to 20,000 over the past couple of years. Rising benefits costs are going up 6.1 percent. That, of course, is a sign of an older work force. And temps, that's really one of the only growth industries in this country, 11.7 percent more temps this year than last year.

The only good news out of this, Bill, is for younger people. Everyone knows that trying to get a job out of college is so tough. Well, guess what? You might get a job but you'll be replacing some 40-year-old with a family. So, don't feel too good about that I guess.

HEMMER: Not that we're members of the guilt society over here.

SERWER: No.

HEMMER: Quickly, the fed is going to meet this week.

SERWER: Yes.

HEMMER: Are they are going to cut or not?

SERWER: Well, they are going to cut. The big question is: Is it going to be a half-a-point or a quarter-point? I'm going to say a quarter point. I think they need some more ammo.

A good week on the markets though, last week.

HEMMER: Yes.

SERWER: Even with a triple-digit loss sandwiched in the middle, we were still up 83 points on the Dow, the Nasdaq and S&P across the board, and the rally continues towards the end of the month. A little news this morning, futures are down, but there's a big biotech merger, IDEC buying Biogen for $6.7 billion. We've seen a lot of activity in mergers and in biotechs, so we'll be watching.

HEMMER: Got it. A quarter-point, huh?

SERWER: Yes.

(CROSSTALK)

HEMMER: All right, thank you, Andy.

SERWER: OK.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.







Aired June 23, 2003 - 07:46   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: From "Sex and the City" to stocks and the city. Andy Serwer is watching it. How are you?
ANDY SERWER, "FORTUNE" MAGAZINE: I'm doing fine.

HEMMER: It's Monday. Workers beware today, huh? What gives?

SERWER: Yes. Well, you know, everyone knows the unemployment rate is ticking up toward 6.1 percent. A lot of people are concerned about their jobs and rightfully so.

HEMMER: Yes.

SERWER: But it might not be the people who think they're worried who should be so concerned. You know, traditionally in these downturns, blue collar people and the last hired/first fired. You always hear of that, right? Well, not so. The white collar woes continuing in this country. We're seeing a new trend, Bill, of people who are making big salaries getting fired and then getting replaced by younger people at much lower salaries.

HEMMER: It's the easiest and quickest way for a company to cut its bottom line, huh?

SERWER: That's right. You take someone making $125,000 and replacing them with someone making $40,000. There's not a whole lot of data out there, but we do have some. Let's check into a little bit here.

Age bias claims are up, from 14,000 to 20,000 over the past couple of years. Rising benefits costs are going up 6.1 percent. That, of course, is a sign of an older work force. And temps, that's really one of the only growth industries in this country, 11.7 percent more temps this year than last year.

The only good news out of this, Bill, is for younger people. Everyone knows that trying to get a job out of college is so tough. Well, guess what? You might get a job but you'll be replacing some 40-year-old with a family. So, don't feel too good about that I guess.

HEMMER: Not that we're members of the guilt society over here.

SERWER: No.

HEMMER: Quickly, the fed is going to meet this week.

SERWER: Yes.

HEMMER: Are they are going to cut or not?

SERWER: Well, they are going to cut. The big question is: Is it going to be a half-a-point or a quarter-point? I'm going to say a quarter point. I think they need some more ammo.

A good week on the markets though, last week.

HEMMER: Yes.

SERWER: Even with a triple-digit loss sandwiched in the middle, we were still up 83 points on the Dow, the Nasdaq and S&P across the board, and the rally continues towards the end of the month. A little news this morning, futures are down, but there's a big biotech merger, IDEC buying Biogen for $6.7 billion. We've seen a lot of activity in mergers and in biotechs, so we'll be watching.

HEMMER: Got it. A quarter-point, huh?

SERWER: Yes.

(CROSSTALK)

HEMMER: All right, thank you, Andy.

SERWER: OK.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.