Business

Employees Optimistic About War's End

Forty-three percent of employees say that the war has had an impact on morale in their workplaces, according to the preliminary results of the most recent Gallup/UBS Employee Outlook Index poll*. One-fourth of employees (25%) also say the war has affected productivity at their companies. In both instances, more employees say that the impact of the war is more negative than positive.

Does this mean that victory in Iraq will have a net positive impact on American workplaces? Regardless of whether or not the impact on the workplace is positive, will victory in Iraq improve the overall business climate?

Victory Brings Benefits

Given the war's net negative impact on workplace morale and productivity, victory should provide obvious benefits as these impacts are reversed. People at work will gradually stop talking about the war, stop tracking it on the Internet, and stop staying up all hours to watch the war "live" on television. They will also stop riding the emotional ups and downs as the war ebbs and flows.

Even more importantly, many employees expect business at their companies to improve once victory is recognized. Forty-nine percent of employees say that a successful conclusion to the war is either very (16%) or somewhat (33%) likely to immediately increase the amount of business their companies will do. Similarly, 48% say the war's end is very or somewhat likely to immediately enhance their companies' profits, and 45% say it is very or somewhat likely to immediately increase their companies' growth potential. In many instances, there will be a lag before an improvement in business will affect employment. As a result, it is logical that a somewhat smaller percentage of employees (34%) say the successful end of the war is likely to immediately improve the employment situation at their companies.

Still, Caution Is Warranted

While employee optimism about the prospects for their companies following the war is clearly a positive sign for the economic outlook, such enthusiasm alone will not be enough to jump-start the economy. The fact is, 55% of employees say the state of the economy is hurting their companies more than the war with Iraq. Another 36% say that neither the war nor the state of the economy is hurting their companies. Amazingly, only 8% of employees say that the war is hurting their companies more than the state of the economy.

Obviously, "emotional economics" are at play for many employees who assert that victory will mean good things for their companies. Assuming that the war is not damaging most companies a great deal, employee hopes for a much better business climate for their companies after the war are most likely based on the expectation that business in general will improve when the war ends. Unfortunately, the current state of the underlying economy is not likely to fulfill such expectations in the near term.

*Results are based on telephone interviews with 321 adults who are employed with non-governmental, for-profit companies having five or more employees, aged 18 and older, conducted April 7-9, 2003. For results based on the total sample, one can say with 95% confidence that the maximum margin of sampling error is ±6%. For results based on the pre-war and after the war started samples, one can say with 95% confidence that the maximum margin of sampling error is ±6%.

As Chief Economist for Gallup, Dr. Jacobe leads Gallup's efforts to develop the world's best database concerning consumer public opinion and the economy. He writes extensively about consumer perceptions and their implications for the economy.
Gallup http://www.gallup.com/poll/8173/Employees-Optimistic-About-Wars-End.aspx Gallup World Headquarters, 901 F Street, Washington, D.C., 20001, U.S.A +1 202.715.3030