Tags: Economy, Jobs, Recession, unemployment

Posted in Economy on December 26th, 2008 by Ryan Kazinec | 9 Comments

It is often said that life can change in the blink of an eye. What isn’t said is why, when, and how many times life can change. When I stop and think back a few months, a few years, or even a couple of decades one thing always holds true, I have constantly changed, sometimes for the better and sometimes for the worse. More recently my focus has been directed towards the US economy and what it’s downward spiral means to my wife and I. Looking back as recent as six months ago our perspective on employment was significantly different than it is today. The wounded and vulnerable status of the United States economy has forced employers and employees alike to take desperate measures and begin operating on a defensive front.

The current and probable future state of the U.S. economy isn’t good for either the employer or the employee. Most people are familiar with the real estate terms buyers and sellers markets and to create a simple analogy the U.S. job market has transformed from a workers market to an employer’s market. Just six months ago the average American worker would probably consider experience, education, and skills as a weapon for landing the bigger, better, deal (job). In what seems like a blink of an eye the average American worker is now coveting that same resume’ to increase job security instead of utilizing it for greener pastures to graze.

It’s getting to the point to where anyone who has a job is grateful to be employed as we should be; there are a lot of families up against the ropes due to layoffs and there are even more families out there that are one unfortunate event from being there themselves. Along with the altered perception employees have regarding their jobs comes some obvious side effects. First, employers will see significant increases in job retention rates meaning people are a lot less likely to move from job to job (the employees who aren’t laid off). I would also venture to guess that there will be a large drop in employee complaints about work policies, schedules, environment, etc… in an effort to increase job security. Let’s be realistic, you’re going to have to be willing to put up with a lot more B.S. on the job now because there are herds of people who are willing to fill your position without complaining about it. This may sound like a golden situation for employers but it’s not. They may have more loyalty from their workers with less complaining but there are significantly fewer jobs to fill and a lot less money in consumers’ pockets which will continue to kill company profits.





An employer’s defense mechanism is slightly different but with the same ultimate goal, to stay in business (employed). Of course the number one cost for employers is the expense of labor which comes with additional costs of employee benefits (health care, paid time off, pensions, etc…), so it’s easy to see why jobs are usually the first thing to go. How far companies will have to go to stay alive will depend on just how bad the economy gets. It really is a case of survival of the fittest for both employees and employers.



On the extreme side I can see companies streamlining product lines, which means there will likely be a much smaller variety of goods or services to purchase. I’ve worked in the grocery business for well over ten years and have worked for a cookie/cracker company for the better part of the last four of those years. To give an industry specific example companies may be forced to direct their focus to the core items they sell. Due to the Wal-Mart trend of streamlining all levels of business operations to function on the most efficient level, companies have shut down manufacturing facilities forcing more and more products from the dwindling numbers of facilities still operating in an attempt to cut costs. This process has been successful with the growing economy but what happens when the demand for products drops dangerously low? Suddenly the random varieties of products become a burden and companies have to go back to what has always worked, their core items/services. In the cookie and cracker business let’s stop and look at what takes place at the bakeries. The production lines are setup to bake a certain product and once they have baked an adequate supply of that one particular product the entire line shuts down so it can be thoroughly cleaned and prepped for the next product. As they say time is money and every time the lines shut down money is lost due to nothing being produced. Streamlining product lines will allow companies to keep manufacturing lines up and running for longer periods of time without having to shut them down for reconfiguration thus producing more products with less down time.

As we have seen throughout the last several months companies have a multitude of options to keep their doors open but most of them aren’t very appealing. We’ve seen companies shut large numbers of stores down, lay off employees, and file for bankruptcy protection, all of which are worrisome situations. One of the things that really started worrying me was when Home Depot announced they were shutting down a large number of their stores. Anyone who has witnessed the time, money, and labor it takes to erect a Home Depot building knows that it is a serious event to have one shut down.

I suppose I’ve drifted away from the premise of this article a bit so let me step back and ask this question, at this point are you more concerned with job security or the perks of your job (pay, benefits, etc…)? I’m guessing your answer will greatly depend on your experience and the industry you work in but I am curious to see all of the different perspectives and opinions. I look forward to your comments and feel free to participate in the rivalry that was created for this very topic.