Posted by marykeating on February 7, 2010 under Employment at will, Unemployment compensation | 
The plight of unemployed workers is inextricably linked to the high rate of foreclosures. These are not the stories of people who bought a house on credit that they could, under no fantasy, afford. Those are the extremes, and were never destined to work out.
These are the stories of ordinary people squeezed by daily expenses, but making it until they were brought down by a prolonged period of unemployment. They lose their houses, their credit is smashed, and when they finally get a new job, they remain insecure. A recent New York Times article details only three such examples, but they are surely worth pondering as we see whether the American mindset will permanently change. Our grandparents (or parents or great-grandparents) who lived through the Great Depression were more likely to believe in saving to the point of miserliness, buying nothing on credit, and putting by for retirement. Yet, as the thirties turned into the forties and fifties, the post-war economy soared, social security was available, good private pensions abounded, and people took more risks. Easier, perhaps, when a lifetime at one company was commonplace.
Now many well-educated, well-trained, hard-working people have lived the reality of employment at will. They may not be able to afford a house again, or be able to handle the commitment required. They know that loyalty to an employer is a one-way relationship. Will their experiences change our priorities and choices, or will our native optimism prevent us from redefining the American dream?
Posted by marykeating on August 4, 2009 under Employment at will |
According to an article in today’s New York Times, the difficulty of bouncing back from a layoff turns out to be permanent for many workers. The article quotes an economist whose longitudinal study of workers laid off in an earlier recession, in and around 1982, proves statistically what many feel: in many cases, the middle-aged, middle income worker loses a job, and never regains his original wage level. The study concludes that people who stayed in one job the longest were hardest hit, perhaps because they had become such specialists. Not only that, those who had been laid off once were more likely to face the same fate in the next economic downturn, since their tenure was shorter.
I do not have the economic chops nor remember enough about statistics to evaluate the methodology, though it certainly seems to have been thoroughly considered. The authors primarily focus on men’s experiences, but decide that women’s experiences track the same way.
The authors of this study do not take on the challenge of suggestions for an individual to escape the 20% long-term earnings reduction that befell the average laid off worker. From a societal perspective, however, they note the following:
In particular, while the ability to fire ‘at will’ may benefit adjustment in
the labor market as a whole, the costs in terms of lost productivity and earnings of individual
workers may be much higher than typical replacement rates of unemployment insurance or
other programs designed to smooth temporary earnings fluctuations.
(See page 20 of the study).
I haven’t been hearing a groundswell of support for enacting a termination with cause standard, and don’t expect it to begin in Maryland. So, in the meantime, employees need to keep in mind that loyalty to an employer is largely a one-way street. Recommendations on avoiding a permanent reduction in a standard of living after a layoff include things that your mother told you, and things your geeky nephew can tell you. Mom would say live below your means, you never know how long the good times will last. And Stan the high- tech man can teach you to leverage social networking like LinkedIn (here is my profile) and other sites, and to keep track electronically of your friends and acquaintances, so you can get a great job search going when you need to.
