"Joy cometh in the morning" scripture says. And as much as we all would like it to be true, we know that we are in for some very tough times ahead. For the American workforce, we may have yet to see its darkest hour.
Statistics released Friday indicates that 524,000 jobs were lost in December, and the unemployment rate is currently at 7.2%, a 16 year high. In 2007, 15 million Americans were out of work at one time or another. But this takes into account people changing jobs, or taking a brief sabbatical before taking a new job. This measures a so call "rolling unemployment." The difference now is that 11.1 million Americans are unemployed at this very moment (50% up from last year), and this number is expected to increase up to a conservative estimate of 8% by mid year.
And as staggering as these numbers are, they barely scratch the surface of the current economic stagnation. The so called "total unemployment" figures takes into account those wishing full time work, but taking part time work because that is what is available. Over 13.5% of the American workforce is officially classified, either voluntarily or not, as a "part time" employee, which by law means they cannot work in excess of 29 hours per week. These workers are not guaranteed any benefits, generally have the worst schedules, the lowest pay scales, and have as a side benefit; very little to no employment security. Clearly, these are the ones to go should additional cuts be deemed necessary.
As corporations struggle to survive in this economic environment, some employers are taking the chance to sever ties with their perceived "bottom performers," and this is a good thing, a good first step. This is a healthy thing for corporations, and American business as a whole. Call it a downsizing, a force reduction, or layoffs, the emphasis is on making the workforce healthier, and this is an ongoing process every year for many well run corporations. These reductions are usually slight, and cause the least amount of employee upheaval within the workforce environment. These reductions are accompanied with management directions to "do more with less" or "work smarter, not harder," colloquialisms meant to justify not replacing the departing employees.
Step two in troubling times are to cut back, or eliminate employee incentive programs, eliminate yearly bonuses, eliminating overtime, curtailing employee events (picnics, after hour meetings, weekend out of town management functions, and the like), and to freeze hiring and wage increases. All prudent measures, to be sure, and accomplished with little or no fanfare, or employee blow back. However, most corporations are not finding these measures to be adequate in remain financially viable. Many are reclassifying their employees from a full time, guaranteed forty hour status, to a reduced full time status, and cutting their hours. In fact, the average American worker is now averaging only 33.3 hours per week. This too is a positive step, as it spreads the loss over all of your hourly workforce, and may eliminate the need for closures and layoffs.
However, for many corporations, these measures were not enough. Massive store closures and force reductions are so common place they hardly make page one of our local newspapers any more. Clearly, the leadership of these corporations are facing drastic measures in order to remain "healthy." The steps for a business in financial turmoil are as basic as economics 101. They must drain their inventories and reduce payroll, and we are seeing this with many retailers at present. Obviously, in making their corporations healthier (or at least staying alive), there is a devastating effect on the slowing down of the economy. No new jobs are created, corporations are not purchasing for, or anticipating growth, and the American work force tightens its grip on what resources they do have. The phrase 'disposable income" is all but a distant memory for most Americans at present. These lead to further slow downs in production, reductions in overall sales, and increases in unemployment. Our steps to stay afloat individually are proving cataclysmic to the very economic environment we so desperately need to stay financially viable.
And these are just the hard numbers. What also should be discussed is the effect this is having on the employee and management environment and cultures at present. To be clear, any former positive corporate mantra, or business statement has been replaced by six simple words, "at least I have a job." And this is true from the stock rooms, to the board rooms.
Management, formerly the ones responsible for spreading the positive messages and visions of hope and growth for the corporation, are becoming eerily silent. Their minds and attitudes have been stricken by the "emotion contagion" of the times as well. All reports of other corporations demises have created a culture of fear and paranoia among the healthy corporations, which may lead to overly drastic measures.
For management, this means a rapid willingness to commit "corporate anorexia," a sudden and drastic downsizing meant to stay healthy, which could have far reaching effects on the corporation, most of them unhealthy. This is understandable, as in these financial times, no one wants to add any risk to their dinner plates. The irony being that their rush to risk aversion comes at a time when creativity and optimism is needed most in the workplace.
For the workers themselves, most are in desperate fear of unemployment. Nights are spent reassessing their household budgets, and running the numbers involved if the worst happens, and they become one of the statistics as well. And in this climate of fear, their performance at work deteriorates.
The current culture of fear and anxiety creates a cognitive distortion, and hinders their abilities to concentrate and process information. And while their performances erode, the rumor mill flourishes with every cut, actual or anticipated. Paranoia for their personal futures abounds, and any healthy candor in communication quickly fades away. New ideas are quickly squelched, or not offered at all as corporations are loathe to consider investing in any new program, even when it is aimed at increasing revenues.
Clearly, these times call for the American worker to "keep their heads down, don't rock the boat, and stay under the radar," and this is of course, is as understandable as it is inevitable. But when this paradigm shift in attitude infects the board rooms of America, we insure that the financial obstacles of today will last even longer into 2009, and possibly beyond. I have seen the economic enemy, and to a certain extent, it is us.
I for one, do not see the Obama stimulus package doing much to increase economic confidence whatsoever. As much as I would welcome an extra $1500.00 from the government, as much as an extra $300.00 for employer job creation might sound good in total, the cumulative effects will be slight, indeed. What we need is to remember who we are, and what we can accomplish together. We need to get our swagger back, our collective confidences recharged, and move forward. And yes, we need to spend....but not frivolously. Spend.....on things that are necessary, and produced domestically. Spend........our times not living in fear, but with an appreciation for what we do have, and what we can still acquire. And, spend.....our efforts towards helping others, and asking what you can do to help your fellow man. We will get through this, sooner or later. The choice is largely up to us.
And that is the world...."The World According to Kimba." Thanks, as always, for spending your time........reading my blog.
On February 3, the Indian government will unveil a $10 educational laptop intended to bring computing to the masses, reports the Times of India. Like a lot of cheap PCs, the device will sport 2GB of RAM, Wi-Fi and expandable hardware, and operate on a modest two watts of power. The current prototype can be produced for about $20, according to India's Secretary for Higher Education, R.P. Agarwal. Large-scale production runs should cut that price in half, he said, resulting in the $10 figure the government is touting. According to the Times of India, the $10 laptop is a direct response to the MIT-developed nonprofit One Laptop Per Child program, that was viewed as grossly expensive in India.
