UNEMPLOYMENT AND HOW TO LIVE THROUGH IT
Robert Moon
Published by DPS Press at Smashwords
Copyright 2003, 2012 Robert Moon
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Chapter 1 -- You Have Landed in the Unemployment Line!
Chapter 2 -- Seven Questions About Employee Separation You Want to Ask
Chapter 3 -- Fourteen Causes for Lay-offs
Chapter 4 -- Six Common Myths about Employment Security
Chapter 5-- Six Principles of Economics and Unemployment
Chapter 6 -- Spiritual and Philosophical Views About Employment
Chapter 7 -- Seven (or more) Emotions In Unemployment, or “Why am I feeling this way?”
Chapter 8 -- All those feelings: Your Options and Consequences
Chapter 9 -- Resources for Managing Our Feelings
Chapter 10 -- Four Red Flags – Dangerous Emotions in the Jungle of Unemployment
Chapter 11 -- Seven Critical Zones Impacted by Your Unemployment
Chapter 12 -- Financial Survival – Sources for Revenue
Chapter 13 -- Financial Survival: Budgeting and Creditors
Chapter 14 -- Practical Support Systems and What You Can Expect
Chapter 15 -- Stop-Gap Employment Options, the Advantages and Disadvantages
Chapter 16 -- Getting On With It – Exploring Options Outside Traditional Re-Employment
Chapter 17 -- The Tools for Re-employment
Chapter 18 -- Five Lessons to Carry Out of the Jungle of Unemployment
Chapter 19 -- Survivors in Their Own Words
Dedication
Introduction
A man leaves a bar late at night in the heart of a big city. Walking down a dark street, he does not see a missing manhole cover and he falls fifteen feet straight down into the sewer drains running under the street. He is bruised, scraped, and skinned, standing knee deep in flowing sewage, fearing for his life. From the pitch-blackness of that hole, he hollers for help as loud as he can hoping someone passing by above can rescue him. Soon, a politician strolls by, hears the plea for help, and notices the manhole cover missing. He continues on his way down the street, but he takes out a pad and pencil and writes himself a note to bring this to the attention of the sanitation department the next city council meeting. Along comes a doctor down the same street. The doctor hears the man’s cry for help and goes over to the edge of the manhole. Seeing nothing, he takes out his pad, writes out a prescription, and tosses it into the hole before moving on. In a few minutes, a priest comes by, hears the plea for help from the manhole, walks over, writes out a prayer, tosses it into the manhole, crosses himself and moves on. A few minutes later, a customer from the same bar is walking down this street and hears the cry for help from the manhole. He goes over, sees the man’s predicament, and jumps into the manhole. The man who has spent an hour in the manhole calling for help is very shocked at this behavior. “Why” he asks, “did you jump into this manhole with me?” The second man replied, “I’ve been here before and I know the way out.”
This book is about falling into unemployment and the struggle to get out. If you have a comfortable and secure job that will guarantee you employment until you are ready to retire, this book is not for you. If, however, you are facing the imminent possibility of unemployment or you are already unemployed, this book is written with you in mind. The content of this book does not try to make light of unemployment. To the contrary, it addresses what keeps the unemployed awake at night. With realistic honesty, it explores the tough issues and does so with the voices of experience from those who have lived through unemployment.
The content of this book is presented in four sections. These sections are arranged in the order in which one usually experiences unemployment. Chapters 1-6 explore how we end up in being unemployed, usually through no fault or control of our own. Chapters 7-15 examine what happens to us while we are unemployed and the resources we have to combat the problems we experience. Chapters 16-17 address some of the realities of job searches and the tools for finding new employment. The book concludes with accounts of survivors told in their own words.
This book can be used in a variety of ways. You may find it helpful to read the book from cover to cover allowing it to provide a descriptive journey through the unemployment jungle. Or you may prefer to use the chapters and their subtopics as you experience the related issues—skipping around, reading whatever subject meets your current need for information.
The ultimate point in this book is to help the unemployed reader grasp some very important truths. While unemployment can be one of the most unpleasant experiences in life, unemployment is not the end of the world. Unemployment can be a life-changing experience—an experience where good can be found. Indeed the journey can be difficult, but it can also be good. Finally, and most importantly, as an unemployed person reading this book, you will discover that at least one other person has been there and knows what you are experiencing.
So here we are, in this hole we will call unemployment. With the help from this book and from other persons and places perhaps unexpected, let’s find our way out.
Chapter 1:You Have Landed in the Unemployment Line!
Find a gathering of persons who have lost their job and very frequently the topics can be the bad feelings about how each person learned of their job loss or speculation as to what caused the unemployment. Ask most currently unemployed, and at least half will express some pain and displeasure at how they were laid off. Some preoccupation with this pain seems natural. We start your survival course for unemployment by looking at how you got here.
Did you lose your grip on the upper rungs of the corporate ladder and land in a thicket of the unemployed masses? Were you one of hundreds or thousands that were dumped together (in one swift corporate motion) into the wild world of unemployment and told to fend for yourselves? Did you make a serious mistake with your employer and now your entire career is in jeopardy? Were you gently led to the jungle’s edge by a kind supervisor assuring you that with your good skills and work experience everything would be all right? Were you abandoned at the mouth of a volcano as a sacrifice for the corporate gods? The Number One Complaint about separations is the manner in which management handled the whole event
Paul Simon and Art Garfunkel, in a folk tune of the 1970s, tell us that there “Must be 50 Ways to Leave Your Lover!” In this chapter I identify several ways people learn they are unemployed. In general terms, there are two basic categories: Single Action Separation and Mass Lay-offs.
Single Action Separation can also be called individual separation and can be initiated by either the employer, or the employee (you). There are four basic categories for employers having a single action separation. Let’s look first at the single action separations taken by the employer.
Single Action Separation as the Unwelcomed Retirement. The announcement circulated in the company comes as an invitation to attend a special reception for John, long time employee of XYZ Company, who is retiring. Interesting! You did not know John was retirement age. In your recent conversations with John, you do not recall a discussion about his eagerness for retirement. Sounds fishy? Probably is! Retirement is a technique that companies have for putting on a good face for terminating an older employee. It looks like an award to the outside world while inside it is obvious the employee is getting the boot. The conversation might go something like this:
CEO: John, glad you could drop by the office. I wanted to have a chat with you. We haven’t talked in a while and I’ve missed it. How are the kids?
John: Kids are all grown now and the last one graduated from pharmacy school two months ago. I am adjusting to a nice quite home with an occasional grandchild dropping by for a weekend visit.
CEO: How long have you been with us, John?
John: I started right out of school with XYZ. It’ll be 25 years in November. Seen many changes in this company, but I’ve enjoyed every minute of it. What’s on your mind, Dick?
CEO: Well, I’ve been reviewing the benefits programs for our employees. I came across your account and WOW, between what XYZ has contributed, and your own contribution, you’ve put a good bit away over the years. I wish my retirement account were as healthy as yours. Hopefully, it will be when I have been here as long as you have.
John: Yes, early on when XYZ first offered to match my contributions to the annuity retirement fund, I started putting in as much as I could afford. Wasn’t easy, especially when the kids were going through college. The real challenge came when we had heavy expenses with Ethel’s cancer diagnosis and almost a year of treatment. It was very tempting to use those funds to help with the extra cost. I’m just glad we had good life insurance to cover her burial.
CEO: I am sure that was a challenge and we remain very sorry for your loss. John, I also noticed that you have built up over 180 days of annual leave. That’s almost a year of time-off you have yet to use. Got any plans for long vacations now that you are single and the kids are gone?
John: I just haven’t wanted to use the vacation days allotted to me. There is a lot going here at XYZ. The months slip by and days off start to add up. I guess I like to work more than anything else I can imagine doing. Keeps my mind off the empty house.
CEO: John, I’d like to propose something that I think you will find interesting and very attractive. I do hope you will be open to it. We’d like to offer you a package that will accelerate your retirement from XYZ. Here is a draft of a contract we are proposing. Let me outline it for you. In 30 days, you will announce your retirement. In exchange, we will pay your monthly annual payment salary for six months. You can then cash in your time off you have accumulated. The way we figure it, John, in six months, if you retire, and start drawing your annuity, after taxes are calculated, you will be taking home 75% of what you are drawing now and won’t have to work. Sounds like a good deal to me! I do hope you will strongly consider it.
John: What options do I have to accept or reject this offer?
CEO: Well, John, I’d prefer you wouldn’t put it just that way. We are hoping to eliminate your position and yet be fair to you and honor all the years you have worked for XYZ. We would rather, and we think you would too, see your leaving as a retirement rather than anything else. Think about it, and let me know your answer tomorrow morning.
Single Action Separation as The Forced Resignation. A close cousin to the forced retirement is the forced resignation. The encounter is similar to retirement, but the heavy hand is in favor of the employer. The person is in effect fired, but the process allows an out for the employer. The employer presents the case for separation, usually loaded with negatives toward the employee. You are given an opportunity to resign in order to avoid the record showing that you were fired. Some negotiations are usually entertained to sweeten the deal for you and protect the liability for the employer. In many cases, you may get to keep the dollar value of any unused vacation time. In exchange, the company requires you to submit your signed resignation “for the record”. Usually the presentation is already set-up by the Human Resource leader. There are two documents on the employer’s desk. One is a notice of termination ready for the employer to sign. The other is a letter of resignation that reads as if it is from you and is ready for you to sign. There may be a third document, a contract for the resignation arrangement spelling out the conditions under which you are leaving. These conditions might include a voluntary resignation, an agreement to hold the company harmless, any monetary agreements contingent upon your submitting a resignation, and an agreement not to discuss the contents of the agreement with anyone.
This setting is a “resignation or else” environment, with the employee having little, or no, leverage. Usually, under these circumstances, you can expect not to return to the job site, except to pick up personal belongings under the supervision of a manager or a company security officer.
Special considerations: In some cases, laws may allow the employee to have a specified time in which to respond to the options, usually a matter of hours or days. Laws may also allow a number of days in which the employee may reverse the choice of the option. If you live in a state where such a window is required, this window allows you to have your options reviewed by your attorney before you sign. If you are reading this chapter and are presently in or suspect a similar circumstance is in your immediate future, you might benefit from legal advice from your attorney.
Single Action Separation - The Firing
There is the simple, unpolished process of simply firing an employee on the spot or in a private setting with immediate consequences. Usually, if the company has done its homework, there is ample evidence for the company to be justified to take such immediate action. At best, the company considers the liability of retaining you for any period to be a greater risk than the consequences that might later occur if you opt to file a wrongful termination suit.
Single Action Separation - Employee Initiated- “I quit!”
The single action or individual separation that gives the most control to the employee is for the employee to decide to quit. It can range from notifying the employer that you are leaving in six days, six weeks, six months, etc., that you have a much better offer from a competitor and your company needs to match it, or “You can take this job and shove it…. right now!” with an immediate walk out the door.
These are bold actions to take and each has its own set of consequences. The employee who thinks that an employer is going to respond positively to a demand for higher pay or a threat of leaving can be severely surprised when the employer is unresponsive to the attempted maneuver.
Resignation Rule Number One: Never threaten to resign until you are actually ready to resign. Be prepared to have your offer to leave accepted by your employer.
Resignation Rule Number Two: Do not over work your resignation. Rule of thumb: figure out how many days it will take you to pass off your responsibilities to someone else then divide that time by ten. In many cases, the employer will accept the resignation and expect you to be an increased liability from that point forward. Your presence and known resignation can be perceived as detrimental to the work environment. If you resigned, you should not be surprised if the employer accelerated the separation by waiving the notice of resignation policy or offering you paid time off.
When You QUIT!
When an employee decides to quit, some options and control shift in favor of the employee, such as when the last day of employment will be and how the employee will leave the premises. Usually, the employer has a policy of notification for resignation. The requirement can be from days to weeks of notification. This policy usually is one sided, i.e., the employee has to give x days of notice to the employer, but seldom does the employer have an obligation to give any period for terminating a employee. The notification policy has no value or power if there are no consequences for lack of notification. However, if an employee decides to quit, the employee should examine the policy carefully and be prepared to accept the consequences of violating that policy. For example, the policy could state that an employee give 30 days notice, leave all keys and company property in a certain manner, and work cooperatively with management in preparation for the separation. Failure to comply could mean loss of vacation pay, or inability to be re-hired by the company at a future date. The employee must carefully weigh the cost of losses when leaving in violation of policy.
In actual practice, the requirement for notification is frequently voided. For example, the employee gives notice, but the employer relieves the employee of the notice obligation. The employer may see more benefit to have a resigned employee leave sooner than later.
I observed this lesson years ago in a most unusual place, the church. A minister had the habit of resigning about every twelve months or so, or when something did not go his way. This procedure had proved to be very productive for him. The congregation was small, not very attractive to other ministers, and the pay was below average for the congregation’s size. Each time the pastor resigned, the congregation took a vote not to accept his resignation. However, each time, he was able to bump up his salary a little bit and win his way for the day. One year, he played his resignation notice as he had always done in the past, submitting it to the congregation at the end of a Sunday service. The deacons immediately called the congregation into an official business meeting. The minutes record that the resignation was accepted unanimously. A layman had to pronounce the benediction because the pastor was out of a job and had not prepared to be moved out of the parsonage by sunset. Sunday School lesson for the day, “Ask and you shall receive”.
Health Issues In Job Loss –
Employment can be lost in ways that have little to do with an employer. For example, an employee can be injured off the job on a vacation, in an auto accident, or during a home improvement project. That injury can leave the employee physically or emotionally unable to return to work. No one can do anything to change that situation. The same can occur, sometimes at a slower pace, when a person faces a serious illness that diminishes the ability to perform the normal tasks associated with the person’s job. When illness or injury is the cause for unemployment, the psychological blow of unemployment can be a double whammy. ‘Not only do I have a serious health problem, the health problem has led to my unemployment’.
When health issues leading to unemployment (temporary or permanent) are directly related to employment, a different set of rules come into play. If a person has a work-related illness or is injured on the job and becomes unemployed or unemployable, the impact of being unemployed is still very powerful. You may be eligible for worker’s compensation, but you are unemployed just the same. The trials and consequences of such separation are governed by employment laws and workers compensation insurance regulations.
Mass Lay-Off Separations With and Without Notices
In mass lay-offs, the news of unemployment can come directly or indirectly. You read a report in the newspaper, a journalist quoting a corporate executive. It goes something like this: XYZ Co is forecasting a third consecutive quarter of losses for shareholders. The losses will require severe cutbacks in production. CEO Smith estimates that approximately 3,000 employees will be laid off. The news can come quietly after the fact, sometimes without warning. “CEO Smith announced Tuesday that Monday afternoon 3,000 employees were given notice not to return to work.” The two most widely used notice methods for mass lay-offs are as follows:
Many unemployed reel from the shock of being informed that they are no longer employed. You can be standing at your assembly station. The announcement comes over the public address system: “All employees of section C please report to the cafeteria in twenty minutes.” Or one by one, the supervisor comes to your side and requests that you follow her into the office. Behind closed doors, you are told that your position is being eliminated. A company security officer meets you outside the office and is your shadow as you clean out your locker or desk. You are then escorted out of the building to your automobile and bid farewell after five years of service.
In some circumstances that are usually rare, the employee is given some notice. The notice can be as subtle as strong hints from your supervisor. Body language, or, off-the-cuff comments, signal that all is not well in the employment relationship. The company newsletter or the coffee break discussions warn that the company is facing some serious challenges that will only lead to reduction in staff. Sometimes, for the fortunate, both the employer and the employee see what is coming and reach an early agreement about how to handle it. The alert employee notices the clues and will take the initiative at the right time. This can mean the employee and employer work together to reach an agreement of separation at a particular time under certain conditions. For example, the potential separation is obvious to both parties. The employee agrees to work the remainder of the week, and put in for remaining vacation time beginning next Monday. The employee announces the vacation to colleagues, leaves for a period of time-off, but does not return to work.
Mass Lay-Off Separation Can Occur with Severance or Without Severance
Many employees terminated from their positions are fortunate to have a severance package included in the departure. The severance package usually works to the advantage of both the employer and the employee. The package can contain
Pay for remaining vacation time, or earned time off
A period of actual employment-type pay, but the person is not present
Negotiated coverage for insurances beyond point of active work
Method and timing of departure (typical escort by company security is waived)
Transfer of unfinished responsibilities to another employee
Time and method for saying farewell to colleagues
Extra compensation for leaving quietly
An agreement for both parties to hold as confidential the terms of the separation (a gag order)
Separation with no severance can be severe and usually occurs when one of the following conditions exist: The employee has been separated because of action deemed extremely harmful to the company or its employees, or the company is flat broke and cannot pay any severance benefits.
The Mass Walk-Out as the The Other Side of Mass Lay-Offs
Mass lay-offs can come about through union strikes or other less organized employee movements. In union strikes, union leadership and voting union members determine that contract renewal conditions are unacceptable. By vote, the employees determine that being unemployed is a better option, for the moment, than working with an unacceptable contract. Sometimes the employer triggers the mass lay-off by taking the initiative and locking out the union workers. Regardless, mass lay-offs produce a dramatic impact on a community. Of particular concern are instances where the community is small and the company is a major employer in the community. When mass lay offs occur, everyone, it seems, is unemployed. In such cases, the chance of re-employment with another employer is a ‘roll of the dice’ as hundreds apply for the dozens of jobs that may be available.
Chapter 2: Seven Questions About Employee Separation You Want To Ask And Some Possible Answers
Why do employers behave the way they do when it comes to separation? Employers do not like releasing employees for any reason. It is the toughest job management has to perform. Because it is unpleasant for management, sometimes they bungle the process and perform poorly as human beings.
Are employers just insensitive jerks when it comes to the way they remove people from employment? In some cases, this is unfortunately true. In most cases, the answer is ‘NO’. Admittedly, there are examples where the removal process could have been handled better, particularly from the perspective of the one who lost the job. Human resource professionals are beginning to address this issue in several ways. Sensitivity training is becoming a more common requirement for managers and supervisors. Other signs of improvement include professional support personnel brought in to coach both the executive leadership and the management levels through the unpleasant process of job terminations. All of that said, losing a job remains a painful process to experience. The person suffering the loss and feeling the pain may interpret the entire process as insensitive and inconsiderate. In times of such pain, even the smallest gesture of understanding from others may be unnoticed by the one in pain.
Why do employers seem so insensitive and inflexible at times of separation? Over the past decade, most companies of any size have established policies and procedures for handling employee separation. The average manager or supervisor is trained in the technical specialty of the job he or she supervises. The average manager or supervisor has had little or no training in termination of employees. Policies and procedures are in place for two reasons: To provide management with an approved method of how to handle a difficult action, and to provide the company with liability protection. Consistently following its own policies and procedures lessens a company’s liability.
Why do employers not provide more notice to employees that employee separations are coming? (Short answer) Employers do not trust employees and vice versa. (Longer answer) Practice has shown that employees have a predictable behavior when too much emphasis is given to the threat of lay-offs: employees’ anxiety levels increase, productivity decreases, and injuries increase. Some employees, hearing of a possible downsizing, will unreasonably abandon their jobs and thus threaten the productivity of the company. If employees, as a group, and where applicable, as individuals, could assure employers that level heads will prevail in the workforce and productivity will remain high, management would be more inclined to keep the employees up to speed with the current crisis. The problem is that employees frequently act out their anxiety with negative consequences for the company. When this happens, if the company is having a crisis, the crisis is only worsened. Until management is convinced that the rank and file employees show a maturity about the plight of the company and its challenges, the rank and file will be kept in the dark. That is the unfortunate truth.
Why do employers escort good mannered employees away from the job site after separation? The really bad actions of a few bad employees in our society have forced employers to take a defensive posture. Remember, every policy that seems unreasonable now was created because someone in the past did something that was unreasonable. The policy, as stupid or harsh as it may seem, is the result of a more stupid or harmful action that preceded it. Believe it or not, where companies are current in human resource laws and practices, serious thought has gone into establishing a process for dismissing employees. Here are a few rational arguments for current procedures frequently found in human resource manuals.
Standard procedure. Companies establish policies and procedures to standardize their responses. Good and bad employees get the same treatment so no stigma is attached to anyone.
Safety and liability concerns for the other employees. Our communities have been shocked at the outrageous and sometimes deadly reactions of a few employees during separation processes. Smart companies are mindful of the need to protect the remaining employees as much as possible from unnecessary harm or danger.
Security concerns for company property. One of the highest budgeted expenses for many companies is internal theft or abuse of company property. Employees are frequently closely monitored as they move through the separation process because there are too many occasions where employees have acted out their immediate anger toward the separation by stealing tools, sabotaging machinery, damaging computer or computer data, destroying or stealing proprietary paperwork and files, lifting supplies, and other revengeful acts.
Buffer to shield the emotions of those who are leaving and those who are staying. Notice of separation, particularly when unexpected by the employee, can be a traumatic and emotional experience. It can have all the elements of a sudden grief experience. Those leaving as well as those staying are experiencing losses. It is usually best for those sad experiences to be shared with co-workers in another place, at another time.
Least interruptive to production. In some instances, having an employee who is emotionally distraught from learning of a separation on the job site can be dangerous for the employee, other employees, or persons serviced by the employees. An emotionally upset person cannot think clearly and could unintentionally cause serious damage to machinery or persons. For example, if a nurse is terminated and obviously upset by that action, the patients that nurse serves will probably not receive the best care possible.
Why do employers play games, e.g., announcing the retirement of an employee as though it is a dream come true for the employee, when it is actually a termination dismissal? It boils down to internal and external public relations, a PR game. Sometimes the employee would prefer to be seen as departing toward retirement. If the company can put a retirement label on it and get most of the company and community to believe it, the company retains an image of caring for its employees of long standing. Unfortunately, most employees see through this sham and the employer loses credibility anyway.
Why are employees sometimes not given an opportunity to say farewell to colleagues? Saying good-bye is a tricky business. Some employees can carry it off well; maintain a sense of decorum and dignity about themselves, even in the midst of bad news. Other employees, when faced with the same news, unravel into an emotional puddle, or go on a rampage of anger. The discharged employee who lacks emotional self-control can bring much harm to the work environment. Being distraught can be contagious in the work place. In many cases, employees prefer to return to the workstation after hours to collect their personal items, precisely to avoid the embarrassment of being let go.
Chapter 3: Fourteen Causes for Lay-Offs
Who cares? You might not give a rip about why you, your parents, your grandparents, and perhaps your children run up against unemployment from time to time. Perhaps you should. Perhaps you want to pin the blame entirely on a favorite target, like China, Mexico, or the supervisor who handed you the pink slip. This chapter won’t help you find a job. It just might help you understand why you are in the predicament of unemployment. If you expand your knowledge about employment and unemployment just a little bit, it just might give you an advantage above those who wish to remain uninformed. Who knows, the information learned in this chapter could help you put on a different attitude about working in a free economy. If you are game then read on. If you would rather get on to the next job, and then the next job, and the next, skip this chapter. After about three more jobs my bet is that you will come back to look at this chapter more closely.
There are many reasons why people lose their jobs, why there are periods of high and low employment and unemployment, and why mass lay-offs occur. This chapter outlines the major causes for disruption of employment. The challenge is to see where you fit in, where the current trends are, and what effect those trends have on getting through the jungle of unemployment and successfully returning to employment. Fourteen causes for unemployment! They are not necessarily in any order. Here we go!
Overproduction. When a company produces more than consumers can purchase, there is overproduction. If the ACME Company is building widgets and now has a three-year supply of widgets in inventory, and ACME is only selling about one fourth of its inventory per year, look out! Lay-offs are already long overdue!
While in graduate school, I pieced together several part-time jobs to provide an income for my family, yet remain a full time student. One of the jobs I had was as an offset press operator for a small business. This business was a consultant company that taught other businesses how to train and motivate employees. The owner was my boss and the consultant. As a savvy businessman, he would convince these businesses to subscribe to a series of small training manuals supposedly designed just for their company. The training manuals were binders filled with pages of advice, a few entertaining cartoons, and some bullet points for emphasis. This was before the days of wide use of copy machines. By owning his own printing press and small shop, my boss could produce and sell these manuals at a price lower than a business could reproduce them, and distribute them.
My job, as a press operator, was to print the batches of different types of manuals and have them ready for mailing at the proper time. I worked alone, recorded my hours, and the volume of printing, and then submitted the report for which I was paid good wages. It was a cool job. I could have the radio on full blast tuned to my favorite station and could actually hear it above the roar of the presses. I learned ways to increase production speed. I positioned the two presses in such a way that I could monitor the ink and water, and the production of both presses as they ran at top speed, about 6,700 impressions per hour each. Several months passed as I worked this improved production method several days a week at my own schedule.
Meanwhile, my boss, a man of senior years, was beginning to have health problems and missed several weeks of work. Sales of manuals began to decline. Soon, there were manuals everywhere, floor to ceiling, wall to wall. The owner’s son, stepping in for his dad, toured the print shop and surveyed the inventory. There was enough printed inventory to last two years. I had worked myself out of a job. My first child was born that week
Decreased Demand. Two things are constantly changing and adjusting in a free economy; supply (what companies and employers produce) and demand (what consumers purchase or use). Experts (i.e., CEOs and business owners) try their best to predict both. If they overestimate either way, it creates a surplus. In order to get rid of the surplus, the selling price must be lowered. Each time the price is lowered, the profit for the company is directly reduced. If management underestimates the supply or the demand, they miss opportunities to sell the product and make more profit. Unemployment is the natural consequence when consumers reduce their demand for a particular service or product. It is true in manufacturing. More widgets than the consumer wants or needs, the front line widget maker is out of a job. It is true for farming. Too much corn for several years, the price of corn crashes, and the local corn grower is out of business.
Recession or Depression. These are terms used to describe trends in the economy that may affect an area, a region, a state, country, or the entire globe. In laymen’s terms, recession is when the system of production, selling and buying begins to lose steam. There is a serious slowdown in successful new business start-ups, and an increased trend in business failures. Investors that put up the money to make companies work become cautious. Recession is when your neighbor loses his job at the factory. Depression is more severe. It is at the lowest point in a recession. The system of production, selling and buying, is no longer losing steam. It has no steam. Everyone owes everyone else. Investors have no money to put into new projects or to rescue failing businesses. Depression is when you are out of employment. American employment, and more frequently global employment, are directly affected by recession and depression. People cannot find work because there are dozens, sometimes hundreds of people seeking employment for every job available. The latest most severe depression to occur in the United States began in the late 1920s and extended throughout the 1930s. It was a time of severe poverty for millions. Millionaires committed suicide over their loss of fortunes, while the poor wasted away. Thanks to the efforts of national governments, and in many cases international diplomacy, the industrial world has not experienced a repeat of the 1930s Depression. Regulations of economy have so far successfully warded off a repeat of that period that permanently scarred our parents and grandparents. Recessions, however, are always just around the corner. They usually occur in the United States two or more times in a twenty-year period. As of this writing (2012), we are recovering from the worst recession since the Great Depression.
Employer Bankruptcy – Outside of a depression, the number one cause of lay-offs are businesses (employers) who experience several cycles of losses, i.e. the revenue for the business falls short of the amount needed to pay the expenses to remain in operation.
Relocation of Employer - To avoid bankruptcy, a business may seek to relocate to an area or country in order to access cheaper resources needed to make a product. That cheaper resource could be raw materials, such as steel, or minerals. It could be a cheaper climate, reducing costs for expensive heating. Lower taxes for property and inventory can also motivate relocation. More frequently, the main cause for company relocation has been the pursuit of a cheaper labor force. Sometimes this is a matter of relocating from a union controlled labor pool to a non-union labor pool. Sometimes it is simply the availability of a willing labor pool. In increasing numbers, companies are taking their production systems to countries that have a labor force willing to work for lower wages. Foreign trade is one of the favorite targets of the unemployed. They want to blame the Chinese, the Indonesians, the Mexicans, anyone who will do the work for less than they were paid. “All the good jobs are going overseas!” (or across the border.) This leads naturally to the next scapegoat commonly blamed for unemployment.
Foreign Trade Issues - A colleague of mine had a favorite saying during discussions around the lunch table at the company cafeteria. When we would get in a moaning, bitching, whining tone about the plight of our company, he would ask: What is the first thing you need to do when you realize you are digging yourself into a deeper hole? After several stabs at the right answer, he gladly advised: “You put the shovel down!” If we have a problem with jobs going overseas, it is our own making, our own hole we have dug. As prolific consumers, we want the best of everything at the lowest possible price. The lowest possible purchase price is impossible if we pay ourselves wages that are not competitive. We have contributed to our own CATCH 22! In a new world economy, we must stop blaming the other countries. Why deny those citizens a chance to improve their economy by working hard and in a competitive manner. They are willing to take our raw materials, shipped to them by boat, put it all together in their own back yards, and send it back to us on a boat, cheaper than we can produce it in our own back yard. Ya gotta ask, “Why?” The favorite answer is that the employees in the other countries are working for slave wages. We love to complain about the pennies for the hour labor rate. But the economy of pennies for the hour buys more, provides more, for hard working persons who are frugal and waste little. Sounds like the same virtues of the working class that founded our country. Lesson for this section: You’ll never be freed from the agony of your unemployment if you spend your energies blaming some other worker in another country.
Overpriced Labor. Relocation of employers and foreign trade go hand in hand with the issue of overpriced labor. Two companies produce the same product; the only difference is the brand. Company A is made up of a labor force willing to work for $ 15.00 per hour. Company B is locked into using a labor force that demands $ 18.00 per hour. You, the consumer, are only willing to pay for Company A product because it is 10% cheaper than Company B. Company B, if locked into a price for labor, must reduce its labor force to match the total cost of labor put out by Company A. Jobs are consolidated, employees laid off.
Poor Management. Many jobs are lost because managers and business owners do not know how to operate their companies using good business principles. They make business decisions that are beyond their abilities or without any accurate information. They are guessing, hoping, gambling with resources, including the personnel they employ. Poor business management eventually runs the business into the ground where it cannot sustain the payroll. Employees are released, not because they were not productive, not because the product or service produced was inferior, but because the leadership of the company, the employer, did not know how to keep the business out of trouble.
Corporate Vice. The cousin to poor management is corporate vice. In corporate vice, the management is usually very skilled, but becomes very greedy. Driven by a desire to have more than the reasonable leadership salary, occasionally a business leader will get involved in some stupid, unethical, or unwise activities. Only when it is too late is it discovered that management has single handedly wiped out a company and left the employees with nothing. The scandals of major corporate executives are announced daily as I write this.
What is happening at the corporate level also goes on too freely at the local small business level. As a small business analyst, I witnessed first hand business owners taking dangerous liberties with tax avoidance and unrecorded financial transactions. My own neighborhood is not exempt. A neighbor of mine reports dining with friends at a favorite restaurant in our area. Toward the end of the meal, the waiter suggested they each immediately order a dessert, on the house. It turns out that while the diners were eating, the business was being raided by tax officials for failure to pay taxes. Within the hour, the business was closed and all employees lost their jobs through no fault of theirs.
End of an Era. Sometimes jobs are lost because the jobs just die. My late brother-in-law, Binion Beck, often proclaimed that the two things that actually freed the South were the backhoe and air conditioning. I am personally grateful for both. Cultures change, inventions bring new methods. Jobs that are stuck in an old method of doing things cannot expect to survive in a free economy. My craft in late childhood and early adulthood was the printing profession. At that time, computer generated typing machines that operated much faster and without the harmful fumes of melting lead were replacing linotype operators. Today, I am able to type this book on my own personal computer screen and make corrections at fantastic speed as I type. When I finish this book, it will be camera ready for the printer. It can be uploaded to the Internet and be downloaded directly for immediate reading on your hand-held device. Alternatively, I can print it on demand, one copy at a time. The new methods of page preparation forced thousands of linotype operators out of work. That era ended. In looking back at your former employment, and looking forward to future employment, part of digging out of unemployment is coming to grips with what jobs are essentially dead, and which jobs are springing to life.
Unproductive or Counterproductive Employee. On a one to one basis, two major causes for much unemployment are (1) the employee’s inability to be productive and (2) the actions and behavior of an employee who disrupts the production of others. Tardiness, lacking of dependability, meanness, substance abuse on the job or affecting your job, rudeness to fellow workers and customers; employees with these traits cannot expect to remain employed for long. In some cases, where employees are scarce, an employer will tolerate a misbehaving employee. However, the first opportunity to replace that individual will be acted upon with great haste. If you have poor work habits, or a bad attitude, think the world owes you a break or a living, are disrespectful, or are a reckless danger to yourself or others, you will be a frequent pilgrim in unemployment.
Workplace Politics. When there is no rational logic for your dismissal, a prime suspect is workplace politics. You know they exist. Politics in the workplace have always been and will always be contributing elements from time to time for unemployment. You, the unemployed, may find your current unemployment status the result of not being on the winning side of a political decision, pure and simple. It happens. Frequently, the least competent people will be retained and the more competent persons will be let go. In such cases, the more competent person is released because her greater competence will eventually expose the incompetence of the current leadership. Workplace politics can be evident in the threat (or insinuation) of blackmail by an employee who, if released, can cause serious damage to the company or company leader. Other times, being retained can be a favor owed for a favor given. Sometimes it is simply a matter of watching out for relatives. Agonize over it if you wish. Cry that it is not fair. Being upset with the seeming injustice of it all will neither change anything nor get you out of the jungle of unemployment. Prepare to move on to higher ground.
Acts of Terror and War. Before September 11, 2001, the American culture never entertained the probability that overt actions of terror and war could so dramatically affect the workforce of our country. The statistics immediately surrounding the terror attack of 9/11 is a sober reminder of our vulnerability to acts of sabotage. In the weeks immediately following the attack, the national unemployment rate increased significantly. In the destruction of businesses and property, not only did thousands of people lose their lives, tens of thousands of people lost their jobs.
Acts of God. Natural disasters can wreck havoc on employment. I lived in South Florida at the time of Hurricane Andrew. In the years that followed, I encountered numerous people whose businesses or jobs were wiped out and they were still unemployed months and years later. Draughts, famines, floods, storms, fires, can destroy hundreds of businesses, and leave thousands without employment for indefinite periods.
This overview of some causes of lay-offs intends to illustrate one point: For the most part, lay-offs are beyond the direct and immediate control of the people who lose their jobs. Identifying the causes for your lay-off can be either helpful or harmful. On the one hand, you can gain appreciation for the shakiness of employment. With so many issues that can work against employment, it is a wonder at times that anyone is employed. On the other hand, you can become obsessed with finger pointing and blame for your lay-off. When this occurs, you expend and waste valuable energy that could be better used toward your survival of unemployment and finding a new job.
Chapter 4: Six Common Myths About Employment Security
If you are new to unemployment, then you have probably entered this experience with some perceptions that may or may not be true. You might also have some attitudes toward your former or future employer that could benefit from some information. In this chapter, we will examine six common myths about employment security. A myth, for the purposes of this chapter, is a concept or idea that is held to be true, when in fact it is at best only a half-truth, or has no truth at all.
Myth No. 1- The security of my employment depends on how good I do the job.
FACT: You can do a good job and still find yourself unemployed. Good job performance may increase your chances of being the most desirable employee, but it is no guarantee that you will not be laid off. Review Chapter 3 again. There are a dozen reasons unrelated to the quality of your work, which will dump a good employee into the pool of unemployed.
One of the employment fields considered the most secure is the military. Let us look a little more closely at the military as an occupational field. The number of persons “employed” in the military, both civilian, active duty, and reserve, is directly impacted by several factors.
National security budgets (which you have little control over). Federal budgets directly determine the number of persons who are “employed” in the military. Additionally, the current President and Congress directly affect the federal budgets. Get a hawk in the President’s office and hawks in Congress, within 18 months the military will increase their ranks and pay scale.
The nation at war or considered threatened by war (which you have little control over) also affects employment. Unemployment rates drop whenever we engage in conflict, cold or active war, with another country or countries. The reason— military defense spending goes up. More troops are enlisted. Military hardware manufacturers gear up for mass productions and must hire more employees. Conversely, when peace is achieved, when the threat to national security is lessened, the military downsizes and dumps hundreds of thousands of ex-military into the employment pool. Unemployment jumps up again as these former soldiers compete with a smaller pool of jobs available.
Finally, military employment security is vulnerable to The “Passover” rules leading to dismissal. All military personnel are subject to a numbers game that may or may not have anything to do with the individual soldier’s performance. Passover rules, for those who may be unfamiliar with the military practices for promoting and retaining personnel, can be summarized in three words—‘up or out’. Many years ago if you were in the military, did your job adequately and kept your record clean, you could fulfill an entire career of twenty or more years and be assured of a nice retirement at mid-life. If you were not promoted for any reason, you could remain at a pay grade or rank indefinitely. If you are passed over for a promotion, you get a few more chances at promotion, and then you are out. Even if you have 18 months left to make 20 years and a secure retirement. Up or out. Your performance record in the military can show good, dependable work, yet have very little bearing on whether or not you stay in, or get the boot. In the military, as perhaps more than anywhere else, politics play a major role in who goes up and who goes out. The politics referred to here are not necessarily in reference to the political parties in power at any one time. Although, in the upper ranks of the military, i.e., Generals and Admirals, powers of the reigning political party do play a role in who gets the prized promotions. The politics that affect the rank-and-file of the military are based on how well the individual gets along with the superiors in charge of promotion recommendations. A slip of a word here or there in an annual performance review or review for promotion can mean the kiss of death for a continued future in the military.
What is true for the military is also true for the private, public, and the not-for-profit sectors of industry. A good performance does not guarantee job security.
Myth No. 2 - The unemployed were let go because they were the least productive.
FACT: Employees with excellent production records may be released precisely because they are very good. If we were to assume that Myth Number 2 was correct, the assumption would lead to a belief that the pool of unemployed are actually the dregs of the employment market. This is just not so. Indeed, there is justifiable argument that some who are in the unemployment pool are there because they make very poor employees. They cannot stay hired because they lack a needed skill level, basics in intelligence, or have very poor work habits. My guess is that less than 5% of those in unemployment are there because of these negative factors. In fact, the majority of those in unemployment have good to above-average skills. Persons can become unemployed because they have developed skills that exceed the requirements for the job they had. For example, let us consider Tom, who works a job as an assembly line worker in a factory and attends college at night. In a few years, Tom graduates with a degree in business, management, accounting, or human resources. Tom is now “over-qualified” to perform the work. Management can see a potential threat on the assembly line: a line worker who now knows more than the next two levels of supervision over that employee. Tom, having acquired a lot of knowledge and experience, may feel entitled to the next promotion available. When there is no promotion available, or the upper levels of management would feel threatened by the presence of Tom in their ranks, Tom (with the degree) is now more likely to be let go when an opportunity presents itself.
Another angle on this myth and fact is the issue of seniority and length of time in service. The normal rule is that an employee is rewarded for staying with a company by receiving annual increases in pay scale. Let’s say the average increase is 4% a year. Year one, Rhonda starts at $10.00 an hour (the current market rate at year one). At year ten, with 10 years of 4% increases, Rhonda is now making $ 14.23 an hour. However, the current market for an employee with 10 years experience in the same industry is only $12.00 an hour. If Rhonda, who has been with the company for many years, can be replaced with an employee for $2.23 less per hour, the company will save no less than $ 4,638 on that one position. Multiply that position times 15 positions and you have a savings of nearly $70,000 without considering the lowered costs of taxes and benefits, which would bump that figure closer to $75,000.
The point: many good employees, excellent employees, are unemployed because their position could be eliminated or a lower cost employee could take their place. The lesson for the unemployed: do not get down on yourself or consider yourself a lesser person or employee because you are on the unemployed list. Look around you and you will find very competent persons like yourself in the same jungle.
Myth No. 3 – My company’s number one concern should be honoring my loyalty as an employee.
FACT: The company’s number one concern is to stay in business so it can provide a profit to its investors owners and sustain a service to its customers. True, a company is only as good as its product and its employees, in that order. Good employees, alone, do not make a company good. Everyone who continues to live and work by the myth that the company has an obligation to honor loyalty above all else will forever live in employment trouble. If there is no business, there are no employees. Okay, you say, the flip of that is also true. If there are no employees, there is no business. This totally ignores the fact that there are millions of businesses whose only employee is the owner.
Myth No. 4 – If I give myself to my employer for my entire working career, my employer owes me for that loyalty.
FACT: Unless you have a contract that states otherwise, your employer only owes you the amount of work you have performed since your last paycheck from the company. Yes, loyalty (translated ‘seniority’) is frequently rewarded when downsizing occurs. The last hired are usually the first to be let go. However, there is no such thing as a loyalty–bond in the current economy and industry standards. You may hear companies and CEOs talk about loyalty to the employees, and you may hear a person described as a ‘company-employee’. However, when it comes to crunching the numbers, profit and financial security of the company take precedence over any implied or explicit expression of obligation to employees.
What is the origin of this ‘loyalty’ expectation myth? There are eras and settings having a sense of obligation on the part of the ‘employer’ for the ‘welfare of the employees.’ In pre-industrial Europe, where lords governed their personal serfdoms, the serfs labored for the lord and the lord took care of the serfs for their entire lives. In cultures with slavery, with all its negatives, the one positive attribute, which is a stretch, is in the slave-owner taking care of his slaves for their entire lives (unless otherwise sold off to another slave owner.) In modern times, industry giants in railway services, telephone services, retail chains, and automobile manufacturers practiced a certain level of ‘loyalty’. A person once in the company could be expected to retire from that company if he or she performed adequately. Many of our parents found employment with these major employers and indeed worked 20-50 years for one employer. It was not unusual to see persons graduate from high school to accept jobs they would stay in until retirement. Today, however, the rule of thumb is that a person will change careers numerous times in a lifetime and have perhaps twice as many different employers. The shift toward multiple careers and employers is as much the choice of the employers as the employees who desire change in their lives.