In my e-mail in-box this morning was bad news from a friend who said that her company initiated a "major layoff" yesterday. The good news? She survived—at least this round. Two of her friends/co-workers were among those laid off. She's concerned about them and is doing what she can to help them find other jobs—no easy task. These days, finding a job is even tougher than finding that needle in a haystack. And it likely will get worse before it gets better.
In a report released today, outplacement company Challenger, Gray, & Christmas said heavy job-cutting could continue through at least the first half of 2009, and the outlook afterward depends on President-elect Barack Obama's plans to stimulate the economy through increased government spending.
"The economy could begin to mount a comeback in the second half of the year, if the new administration can achieve quick passage of its proposed economic and job-growth stimulus package," said John Challenger, CEO.
"The plan to rebuild the nation's crumbling infrastructure will benefit not only laborers on the front lines, but it will push up through the economy, creating jobs for manufacturing workers, engineers, architects, technology specialists, etc.," Challenger said.
Samuelson cautioned that "we should resist the temptation to see the forthcoming 'economic stimulus' package as a panacea. It won't be. At best, it would represent traditional 'pump priming.' This familiar metaphor is worth pondering. To get the pump started, you add water; then the pump operates independently. Similarly the stimulus will succeed only if the economy resumes spontaneous expansion and job creation."
Samuelson described the present crisis as representing "a fundamental break in the recent pattern of American economic growth. For the past quarter-century, the economy has advanced on an ever-rising tide of personal borrowing that supported expanding purchases of consumer goods—contributing to U.S. trade deficits—and a housing boom. But lending became reckless, and many households overborrowed. In its simplest terms, the 'stimulus' substitutes the federal government's superior credit for damaged private credit."
Samuelson purported that this method of stimulating the economy can't continue forever. "Nether rising household nor government debt provides a plausible foundation for future economic growth."
What's needed is export-led growth, something all other countries seek as well. Samuelson said that "the future of the U.S. economy depends on finding new sources of productive demand. That is partly a domestic exercise, but it also requires that other societies reduce their oversaving and reliance on exports. This is a tall order. Our fate is not entirely in our hands—or Barack Obama's."
While world leaders and economists struggle to find a way out of this mess, workers continue to worry about layoffs. According to The Conference Board, consumer confidence fell to an all-time low in December. Among those who responded to the Board"s most recent consumer confidence survey, those saying jobs are "hard to get" rose to 42.0 percent from 37.1 percent in November, while those claiming jobs are "plentiful" decreased to 6.2 percent from 8.7 percent.
Unlike the Alcoa layoffs announced this week, the layoffs at my friend's company did not make national headlines, but the event had a great impact on those affected, those who depend on them, their communities, and the country at large. These displaced workers now are facing what may be the toughest time in their lives, and many employed workers fear the same fate.
Quite honestly, there is no such thing as job security anymore. There hasn't been for quite some time. If you are employed, it always pays to be prepared for a possible layoff. Here are Web addresses for information that can help you prepare:
But remember, while you are employed, it behooves you to do your job well. As companies scale back, more may be needed from existing employees to help the company survive. No one benefits when a company goes out of business—except maybe its competitors.