Recessions tend to be discussed mostly in broad, sweeping, generic terms. Either the recession is a blessing in disguise or, more frequently, an avoidable catastrophe from which you will never recover. In reality, recessions may have a huge impact, moderate impact, or virtually no impact on you depending on your skills, priorities and station in life. The only way to prepare yourself is to know the relevant facts as they relate to you. To that end, Billshrink has researched the 10 most volatile careers to be in during any recession. If you’re in one, tread carefully or consider changing careers. If you’re deciding on a new career, you may want to avoid these!
Retail
A common characteristic of virtually all recessions is reduced consumer spending. Clearly, this translates to a slimmer bottom line for those in retail. While there are some exceptions (USA Today names Walmart in a list of recession-proof companies) retailers of all stripes typically suffer their lowest profit margins during recessions and downturns. The volatility of this field is amplified the further down the job ladder you are. For instance, the job security of a minimum wage cashier at a local department store is so close to zero that it might as well be zero. A store manager is on surer footing, but is still a far way off from the stability he or she enjoyed before the recession hit.
Construction
It goes without saying that recessions aren’t exactly a zenith of new construction projects. A Google query for “building permits down” returns pages upon pages of news stories about the decline in building in counties all over America, most of them from the last 4-6 months alone. The reason, very simply, is that recessions are perceived as risky times to tie up money in construction projects whose benefits are usually deferred months or years into the future. Rather, most businesses seem to conclude that this money should be held onto in the event of a cash flow crisis or some other unforseen, recession-borne obstacle that will inevitably need to be overcome in the next year or two. These marketwide decisions spell tough times for construction workers, contractors, foremen and other professionals in the building field.
Travel
Travel is an industry that lives or dies, in large part, on the vitality of the economy as a whole. When the market tanks, especially for prolonged periods such as recessions, people who would normally part with discretionary income to take a vacation or cruise suddenly cease seeing that income as discretionary. In the haze of recession, no one can be quite certain when the market will turn around. Much as it does with retail, this uncertainty leads many people to cling to money more tightly than they would during prosperous times, when future discretionary income can be assumed. A May 2009 Gallup poll confirms this trend is alive and well in the current recession, finding that over half (52%) of Americans are altering their vacation plans in response to recessionary pressures. All of this is bad news for travel agents (already an endangered profession), hotels, resorts and getaways around the world.
Mortgage Lending
The current financial meltdown has hurt mortgage lenders more than other recessions (due to the housing boom and bust), but this is typically a volatile career in all recessions. The middle of an economic collapse is seldom a time when people are eager to buy new homes. First-time home buyers are often willing to buy, current homeowners would have to sell their current home into the same bad market they are trying to benefit from on the buy side, and there are more current homeowners than first-time home buyers. The systemic forces at work here equate to lean times for mortgage lenders, who are left to fend for themselves among such inferior opportunities as exist during extended downturns.
Real Estate Sales
The same market forces conspiring to devastate mortgage lenders have similar effects on real estate salespeople. Besides the lopsided ratio of first-time home buyers to current homeowners, there is also the sheer, unavoidable commitment involved in buying a new home. Recessions are characterized by (among other things) fear of losing one’s job, saving less for retirement, and diminished investment performance. Not many people are willing to roll the dice on a new house when all of these variables are in a state of flux, and nationally speaking, there is little a real estate agent can do to change this. It should be noted, however, that this is not universally true of all markets. Certain pockets of the country (like Houston currently) remain a decent place for real estate agents to operate.
Entertainment
It’s common knowledge that tobacco and alcohol sell like hotcakes during recessions. Beyond these products, however, the entertainment industry loses some steam during tough economic times. There’s nothing like a huge crash on the Dow or the value of your home halving overnight to make Don’t Mess With The Zohan seem like a frivolous purchase you can do without. Likewise, Hollywood studios tend to hold off on hiring extra stagehands, production crews and extras during a recession. In the same vein, CNN Money reported in May 2009 that video game sales are down 17% compared with just a year ago. While this is partially due to a temporary slowdown in blockbuster game releases, it dovetails with what has historically been a trend during times like these.
Marketing
Direct marketing guru Perry Marshall is famous in that industry for remarking on the paradox of what happens to marketing departments during recessions. Conventional wisdom holds that if marketing is how new customers are driven to a business, more money should be devoted to it during lean times. Instead, contrary to that assumption, Marshall notes that marketing is the first department to see budget cuts and downsizing when the market tanks. Regardless of how counter-intuitive this sounds, it has persisted through enough recessions to be recognized as a real trend. If you are a marketer, make sure you are producing visible, demonstrable results for your company. If you are debating getting into the field, make sure you can do the above before committing.
Automobile Sales
We’ve already seen how recessions tend to delay major purchases in our discussion of mortgage lenders and real estate salespeople. The same tends to hold true for automobile sales. While the current recession has sank auto sales more than those past, it has been a consistent feature of most recessions in recent memory. The reason, simply enough, is that the car one drives is a foundational piece of most adults’ lives. When everything from their job security to their investment portfolio is up in the air, buying a new car is seldom seen as prudent. Rather, most people who might have bought opt instead to do more maintenance on their current vehicles and/or continue saving their money to buy when the market turns around. As car dealers have painfully learned this time around, even lowering prices to dirt cheap status is often not enough to prevent huge swoons in consumer demand.
High-End Clothing
It’s true that people still need to clothe themselves regardless of where the Dow stands. Unfortunately for high-end clothing makers like Abercrombie, consumers tend to economize on the clothes they buy as they do their other purchases. Abercrombie in particular was recently anointed as the “worst recession brand” by Time Magazine for failing to lower its prices at all and consequently suffering 30% drops in sales. Nor has Abercrombie been the only clothing manufacturer to suffer. The green living website TreeHugger reported in March 2009 that clothing swapping was on the rise while new clothing sales were simultaneously falling.
Architecture
Just as demand for construction falls with the market, so too does demand for the services of architects. BusinessWeek reported in March 2009 that layoffs were “sweeping the profession” and asked rhetorically “how can architects survive the recession?” The reason, as discussed earlier, is that new building projects tend to be delayed until the economy stabilizes. Because the job of an architect is precisely to design such projects, it goes without saying that their services are not as widely demanded or utilized during such times as these. Exceptions exist in areas that have not been hit has hard or are outside the scope of what caused the recession.
