(AP Photo/The Day, Sean D. Elliot)
By Greg Burns
| For millions of Americans laid off in the devastating recession, the job
search just isn’t clicking.
And here’s the really bad news: Almost no one will be able to recover
the financial ground they’ve lost.
That’s the inescapable conclusion from years of academic research into
the last big recession of the early 1980s, and job shocks thereafter.
The findings have trickled out in scholarly papers, gloomy facts buried in technocratic detail.
Perhaps knowing the truth will help frustrated job seekers recognize that their struggles are the norm. “They should not take it personally,” advises Till von Wachter, a Columbia University economist who studies the dismal aftermath of recession.
Understanding the economic and social toll of sweeping job cuts also puts a spotlight on government policy — and American culture. In Europe, regulation slows the quick-on-the-trigger impulse to fire staff when the economy tanks. But the U.S. has made layoffs easier for employers, on the theory that flexible labor markets propel growth in the long-run.
Exceptions exist, of course. Everybody knows a fortunate soul whose career blossoms post-layoff. Most, however, pay a butcher’s bill, as reflected in the data:
Involuntary layoffs result in lower lifetime earnings.
Using Social Security and other government records, von Wachter found that workers who lost stable jobs in 1982 suffered an immediate 30 percent drop in their incomes. Even 20 years later, earnings never bounced back. And it’s not as if those losing their jobs were only the less productive, or refugees from failing industries, von Wachter said.
Income lost in a layoff mostly stays lost forever.
Taking longer to hunt for a job doesn’t translate into a higher paycheck.
Data from Germany, where different benefit levels encouraged some laid-off workers to remain unemployed longer than others, show that additional time for conducting searches and awaiting an economic rebound rarely yields a higher-paying job. Over time, pay is unrelated to the length of joblessness. Compared to their peers, those out of work for longer periods aren’t particularly worse off when they finally re-enter the workforce, von Wachter said.
Almost everybody makes less.
Layoffs result in devastating health consequences.
High-seniority male workers were 50-to-100 percent more likely to die in the immediate aftermath of a layoff than colleagues who were spared the ax. Even 20 years later, those who were dismissed ran a greater risk of death, reducing life expectancy by 12-to-18 months. A separate study shows that for men, layoffs lead to higher blood pressure, and for women, depression, hostility and loneliness.
Families suffer.
Job loss of a parent leads to higher dropout rates and lower test scores in their children. Even among wealthier families, where the economic impact of a layoff is cushioned, kids underperform, noted Ariel Kalil, professor at the University of Chicago’s Harris School of Public Policy Studies. “It’s not just about the money,” she said.
Landing a job after a layoff is only the start of rebuilding.
It can take as long as a decade for a dislocated worker to finally settle into stable employment. Changing jobs is common — and not necessarily for higher pay. “Most people underestimate how long it will take to rebuild the career,” said von Wachter. “It’s not over after three or four years.”
Despite the sobering conclusions, laid-off workers need not despair. Many opt for more satisfying work than the higher-paying jobs they held before, and many take the initiative to launch their own businesses, noted Anne Edmunds, regional director of the Manpower Inc. staffing firm.
With the economy slowly improving, the unemployed are becoming a little more selective, choosing jobs that build on their personal strengths instead of merely jumping at any work that comes available.
Though it may not be obvious from the data, she said, “There is some good news out there.”
Here’s some more bad news…the new taxes on payroll and income form the health care bill will only make it worse. Rumor is the IRS is hiring 16,000 new agents though…
The author concludes the article with this stunning statement:
“Despite the sobering conclusions, laid-off workers need not despair.”
That’s a joke, yes? Everything in the article points to a devastating loss for the worker, their families, their social circle. Need not depair?!
I was waiting for the good news in this article and it never came
The problem is the law in this country called “Employment at Will”. That is the law that allows an employer to fire an employee at will for any reason or no reason.
No other modern, industrialized country has such a law.
Wear the wrong color shirt to work? Fired. Comb your hair the wrong way? Fired. Boss have a fight with the spouse? You’re fired. A person can be fired for any reason or no reason.
Employment at Will is also used as a cover for discrimination. People can let go because of their race, gender or age. The employer just claims “Employment at Will”.
This article shows the horrible consequences on society of this terrible, inhumane law.
Let’s repeal this law immediately!
But big government will save us all. Just ask the sheeple who voted them into office.
I am unemployed but not a victim of “the economy;” rather, peremptory job discrimination. I’ve never been allowed to start my career or do any job requiring any college education. My reaction to this is, please don’t say anything to make a layoff look like a blessing in disguise. It might be for some individuals, but they can tell their own stories; the big shots shouldn’t be allowed any rationalizations for what they’re doing to people who need good incomes. We’re all stuck in a money economy. And many who’ve been thrown out of jobs were already doing their dream jobs. People don’t need to be unemployed and broke to “find themselves” career-wise. Our response to all this unemployment should be anger, not depression. We’re the ones who should be marching on Washington to demand the change we need and aren’t getting. Internalizing the oppression is just what the powerful people want. When all the government offers is “training” and “education” even for job-seekers who have the right stuff and need only fair treatment, they want us to take the blame for what employers are doing. More ideas are already online here: http://www.whitehouse.gov/sites/default/files/webform/How%20to%20Put%20America%20Back%20to%20Work.doc
News thrives on conflict and controversy. In other words, bad news sells, good news does not. After I was laid off last March I started looking for jobs (plural) but didn’t have much luck. Now and then I’d get a one-day gig thru a temp agency. I always felt most hopeless about the situation after reading the paper. As long as I wasn’t reading all the bad news, I kind of enjoyed not buying things, economizing, getting up AFTER the sun had already risen, etc.
I finally found another job, thanks to one of the temp agencies I badgered every week. It pays a little more than half what my other one did, it’s only part time, but it’s in a more stable industry. Making less money means I won’t buy useless crap. And what’s wrong with that? Also, unemployment insurance has been extended for those who need it. I have a sneaking suspicion that attitude is at least part of the problem.
There will be a whole generation that come into a job market with no jobs. Could last ten years…
@ The Truth | March 24, 2010 4:55 PM | Reply
“Employment at Will”.
Let’s repeal this law immediately!
Agree 100% … Best comment I have ever read! Thanks
Great news! I don’t have a job and I’ll never recover financially from this mess. That’s what you get because Barry focused on healthcare instead of the things we really need.
“Employment at Will” also allows the employee to leave at any time, for any reason. It’s a two-way street.
The only upswing to any of this, in my opinion, is the notion that horrible times like these inspire innovation. Despite everything…I keep reading about an occasional entrepreneur giving it a shot here and there. Honestly, I think it’s the only way we’ll climb out of this slump—returning to the small business mentality. I work for Regus, a company that can help some folks get on their feet. We’re hosting a sweepstakes that gives a small business or entrepreneur a free, fully-equipped office space in Chicagoland for one year. Give it a shot. Maybe it’s the boost your idea needs to get going. Enter here: http://www.reguschicago.com And, good luck!