Monday, May 6, 1996

Week of 05/06/1996

Hard Choices…
Job layoffs may be fiscally sound, but at what cost?
-by David Matthews 2

Just before last Thanksgiving, my father returned home earlier than usual with a car full of boxes. Boxes that held almost everything that was in his office. I only had to ask him "Is this what I think this is?" He nodded. He didn't have to say anything more.

My father was laid off from his job. Again.

He was the victim of a corporate merger between rival companies and was given what his employer considered a "generous" severance package- full pay up until the end of the year, which was only six weeks, plus expenses. It was on the belief he would be gainfully employed by that time. Problem was, few businesses hire people during the holiday season. And, of course, he would get a glowing job reference- which along with three quarters might get him a cup of coffee.

Worse yet, this was the fourth job layoff in the last six years. It is a dangerous trend in the workplace that sees no ending.

All across America, jobs are being terminated. People who, through no fault of their own, are being laid off through corporate downsizing and corporate mergers. The companies say they must cut jobs to stay competitive. Yet many companies are laying off people just to increase their profit margins. They are already competitive, now they are being greedy at the expense of those who gave them their profit.

But something else is also being cut as well. A sense of confidence in the workplace is slowly being eroded. It used to be the higher up you went on the corporate ladder, the more insulated you were from job layoffs. But in the 1990's, more middle and upper-class managers were laid off than at any other time since the Industrial Age began. Indeed, the only position truly insulated from today's layoffs is that of the owner.

The Department of Labor estimates the average American will change jobs at least six or seven times in their life. That news should have alarmed banks, real estate agencies, home builders, and auto makers. Why? Because with the end of job security not too many people will have enough faith in their current job to even consider any long-term investments like mortgages for houses or loans for new cars. Why risk a five-year investment on a new car if there's no assurances that person will still have a job to keep paying the loan? Better to settle with the one they have. Never mind paying a fifteen or thirty year mortgage for a new house. A person will be going through three or four jobs before such a mortgage is paid off. Assuming, of course, that person gets a new job immediately following the old one, which is impossible since the average time between jobs is now three months.

Those losing their jobs are also getting older and older. My father is in his fifties, as are many who are being laid off. Men and women who have decades of solid work experience, who now must compete for the same jobs being sought after by college graduates with a tenth of the experience and for a fraction of their previous pay. This too should be alarming news to the Baby Boomer generation as they turn fifty, and as they too begin to fall prey to corporate America's unmerciful cuts.

But something else is also building that perhaps the workforce should fear even more- job backlash. There was an unwritten agreement between employer and employee that told the employee "work hard, sacrifice everything for the company, and you will be rewarded." To that end, employees worked long hours and sacrificed everything, sometimes at the expense of their families. And traditionally, companies rewarded those individuals through overtime, promotions, raises, and job security. But today companies no longer simply ask for their employees to sacrifice everything for the good of the company- they expect it, with nothing in return. And now they expect it with no guarantee the employees will even keep their jobs.

Such an action by the employers does not happen in a vacuum. Indeed, with the fall of job security, concepts such as job loyalty- which companies rely on to keep employees from revealing their secrets to their competition- could also fall by the wayside. Workers would no longer have a desire to sacrifice everything for an ungrateful employer. Job quality is already seriously diminishing as workers begin to ask themselves "Why should I give it my best when I could lose my job no matter what I do?"

Investors traditionally cringed at the news of layoffs. Not any more. Investors now cheer when companies announce layoffs. Stock in AT&T soared when they announced they will lay off over 40,000 employees. Wall Street has become willing accomplices to the declining job market.

And the unemployment statistics released by the Department of Labor can hardly determine the true number of victims in this costly game of mergers and corporate downsizing, since they only record the number of people who sign up for unemployment. They do not record the number of former employees who have expended their unemployment checks but not yet found jobs. These people simply cease to exist in the eyes of the DOL.

While politicians like Bob Dole and Phil Gramm talk about bringing a "new sense of morality" in homes and schools, they are questionably silent when it comes to morality in the workplace. They talk little about bringing morality to those who are sacrificing long-term employment for short-term profits. If they are indeed acting for the future of America, then they should be just as concerned about the companies who are working to deprive hard-working Americans of their economic future.

Meanwhile, my father is still searching for work. He has long expended his severance pay just to pay the bills, and must tap into savings to pay next month's bills. My mother works long hours at her job, which now is the only thing bringing food to the table, while they worry about paying next month's bills. At an age when they should be looking forward to retirement, they can only look forward to more bills and an uncertainty to being able to pay them.

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