Archive for March, 2010

The Long-Term Pain of Being Laid-Off

Tuesday, March 16th, 2010

Michael Winerip, a long-time reporter at the New York Times, had an excellent piece in last Sunday’s paper detailing the pervasive long-term personal suffering caused by layoffs, focusing on the difficulties of finding¬† a new job that pays remotely what those affected used to earn.

In a piece called “Time, It Turns Out, Isn’t on Their Side,” Winerip tracks down people he’d interviewed at a job fair a year ago, soon after they had first been laid-off,¬† to find out how they were doing.

“The short answer is, of the 16 I interviewed again, 9 describe themselves as struggling. Eight continue to be unemployed or are working part-time jobs that pay near minimum wage. Several were so concerned about bias, they did not want to give their ages.”

The frustration expressed by those he interviews – mostly middle aged New Yorkers who used to earn salaries just on either side of $100,000 a year – speaks to the sad reality of the layoff experience chronicled in recent years by researchers such as Hank Farber at Princeton and Till von Wachter at Columbia.

If you lose your job in a layoff, it can lead to what von Wachter describes as “large and persistent earnings losses that last over twenty years.” In fact, as I note in SPARK, depending on how old you are when you lose your job, you may never earn what you used to, even decades in the future and there is little you can do about it.

That’s why the task of creating more jobs which hold out the opportunity for stable employment, of course in return for hard work, shoud be such a high priority for the business community, MBA schools and governments at all levels.

The Lincoln Electric example suggests that it is possible.