The economy - a random discussion - Page 3

[LionTigerBear]

The people at DH's company who are getting severance packages are entry-level and just-above entry-level. Just FWIW.

[holyhelianthus]

Originally Posted by Azuralea

I have quite a bit of experience with organization of large companies and layoffs, and I can state unequivocally that this statement is quite misleading. It is true that there are backfill positions that are included in the numbers but generally the percentage is relatively small. Eliminating 10,000 jobs, in my experience, generally means eliminating perhaps about 9,000 real positions, 1,000 backfill positions.

Also, regarding contractors, the percentage of contractors paid significantly more pales in comparison to the number of those hired because the company could get away with not paying benefits and paying a low wage. Therefore, even if the job cuts are to contractors, they still represent a real loss for the person cut, because most contractors are not in the higher salary category in the first place.



My DH's family is not from here, but they're seeing the same problems where they live. I also don't think that the expensive protections in place in other countries are going to last long in the face of sharply declining tax revenue. This isn't just a U.S. problem, nor is it solely originated or caused by the U.S.

Then again, I know many, many people who are seriously suffering now, so I find it hard to consider this academic.

:

Be cynical all you want about the news stories- heck! I don't blame you. But take a walk outside. We have known several families who have lost their jobs, we're one of them (DH was laid of twice last year for several months). The news may be all about shock and awe but that doesn't mean that there aren't a lot of real people out there suffering losses.

As for severance and absorbing the job losses- that's all well and good but that happens in bigger companies and with the higher-ups 9 times out of 10. The majority are not being helped by those practices.

[Denvergirlie]

Originally Posted by Sonnenwende

I've been laid off several times and have never gotten a severence package. The only people I know of who got them were in much, much higher positions than I am.

I work for a small company, maybe up to 50 employees. When they laid people off in November (we were overstaffed - not directly correlated with current economy, indirectly influenced perhaps), severance was given to everyone, no matter their title or level. They all got one weeks severance for every year they worked with the company. Granted for most it was 3-4 weeks of severance, but it was at last better than nothing. They also got paid out on unused vacation time.

Every company is different and severance isn't spelled out as a "benefit" at least not with our company, but they gave none the less.

[dancebaraka]

I don't feel numb or overwelmed really, but I think that is a very natural response. I have been feeling very cautious and protective of my family. This whole mess has activated major problem-solving thinking in us. We are looking at things in a way we have never looked at them before. I have been needing to feel productive and "in control" of our families finances in a way I have never felt before. We are really watching our spending. I have cut out lots of luxuries and am couponing & stockpiling which has saved us a ton of money. We have always lived pretty simply, but we are taking that to a whole new level. DH and I love to learn about history and international affairs, and I think that knowledge, paired with news, feels like... well... for lack of a better analogy, a fire being lit under our a$$.

[Juvysen]

IBM apparently almost always manages to re-absorb people who want back in, but you have to be willing to move across the country to where they need people.

Also, when DH was laid off as an intern in college, he got paid for the rest of the time he was supposed to work there. So, basically, he got 4 weeks paid, which, is about the coolest thing ever when you're just doing it as a summer job, but obviously not as cool if you're trying to support a family.

[holyhelianthus]

Originally Posted by annethcz

On one hand, I feel similarly to Denvergirlie. I do think that the course we were on previously was unsustainable. The bubble had to burst sometime. Our current economic situation doesn't surprise me, but I do have empathy for those who are having a difficult time right now.

So true. Dh has been telling me forever to be prepared for this societies previous (I cant really say 'previous' though can I?) way of life to turn on them and I agreed with him but didn't think it'd be *this* bad *this* fast, ykwim? I guess I am still naive.

I guess I should answer the OP~
I don't feel numb I feel scared. We have already gone through this twice and I just don't want to again. But at the same time I feel an eerie calm like if it comes it comes like anything else and we will always prevail because we always do. I am also angry. I'm angry that people are still bent on pushing the old ways that got us into this mess and angry that it's even happening to those who protested to begin with and to children and people who just deserve all the happiness in the world which is everyone...

Ack! Sorry I am just rambling now.

[velochic]

There is a lot I'd like to reply to here, but don't have the time right now.

I do want to say that the current unemployment numbers are under reported because it does not take into account many factors including those who have exhausted their unemployment insurance, those who have taken multiple low-paying jobs to make up the difference, and those that were part-time (and really contributing to the household budget).

In the end, while the numbers themselves that are reported (of lay-offs, that is) seem high, it is a pitiful representation of the current situation.

I'm afraid that the situation is much worse than even is reported.

[Hazelnut]

It's kind of strange to me period how little it's talked about in everyday life, at least for me in my circles. Although people are losing jobs around here. So far I mostly hear about wealthy people losing jobs and being stressed about the expensive mortgages, so it's odd. I think I'm probably a little too complacent myself, just b/c I think of my dh's job as fairly secure and I have some freelance work that is as well. I mean I am frugal, for sure, trying to save, but not in hardcore penny pinching. I probably should be, as we all should.
I know what you mean though- it's just more news about job losses every time I turn it on.

[Juvysen]

Originally Posted by velochic

There is a lot I'd like to reply to here, but don't have the time right now.

I do want to say that the current unemployment numbers are under reported because it does not take into account many factors including those who have exhausted their unemployment insurance, those who have taken multiple low-paying jobs to make up the difference, and those that were part-time (and really contributing to the household budget).

In the end, while the numbers themselves that are reported (of lay-offs, that is) seem high, it is a pitiful representation of the current situation.

I'm afraid that the situation is much worse than even is reported.

I have to agree. Chris Martinson has been talking about that a lot. I believe a section on the crash course is about it (fuzzy numbers?). It's really shocking when you hear the reality of it.

[shayinme]

Originally Posted by velochic

There is a lot I'd like to reply to here, but don't have the time right now.

I do want to say that the current unemployment numbers are under reported because it does not take into account many factors including those who have exhausted their unemployment insurance, those who have taken multiple low-paying jobs to make up the difference, and those that were part-time (and really contributing to the household budget).

In the end, while the numbers themselves that are reported (of lay-offs, that is) seem high, it is a pitiful representation of the current situation.

I'm afraid that the situation is much worse than even is reported.

I agree with you. I know personally that folks like my dh & I who have been self employed for years (at least dh since I now have a regular gig) don't get counted. My dh has seen his client load drop substantially yet as independent contractor types he isn't counted in official stats. I know many others in the same boat.

While I now have a job, its only pt but I would rather have it be ft. So again, we technically are working, technically we are still middle class but we are handing on by a thread and struggling. I have said for several years there are alot of folks like us that I think fall through the cracks and aren't seen.

[Storm Bride]

Originally Posted by ChetMC

We're also not from the US originally, and don't know anyone who has been personally impacted by the economy and the layoffs. Because of this, what we know about the crisis is mostly academic, and I admit that there's a sense of "holy crap, you people did this do yourselves." I don't mean that so much on an individual level. We aren't blaming working stiffs and young families. Rather, in Canada, there are systems in place, and a culture that better protects people from swings in the economy.

I'm in Canada. My mom is struggling to pay her mortgage, because her field has collapsed. My brother is a partner in a moving company, and may end up going under, after...15? 16? years...because the housing market has crashed, and nobody is moving.

People in Canada are being affected, too. It may not be as bad, but it's still happening...and there's no way to know how bad it will get.

And, while Canadians aren't as debt-dependent and savings-averse as Americans, statistically, we're hardly superstars in either department, ourselves.

[kmeyrick]

Originally Posted by Storm Bride

I'm in Canada. My mom is struggling to pay her mortgage, because her field has collapsed. My brother is a partner in a moving company, and may end up going under, after...15? 16? years...because the housing market has crashed, and nobody is moving.

People in Canada are being affected, too. It may not be as bad, but it's still happening...and there's no way to know how bad it will get.

And, while Canadians aren't as debt-dependent and savings-averse as Americans, statistically, we're hardly superstars in either department, ourselves.

When I lived in Canada I noticed that you guys had some perks we don't have- health care, affordable colleges, etc that explain the discrepancy there. My guess is we're both pretty savings-averse, but you guys are better with social support than we in the states are. Lucky Canadians, darn it!

[holyhelianthus]

Originally Posted by kmeyrick

When I lived in Canada I noticed that you guys had some perks we don't have- health care, affordable colleges, etc that explain the discrepancy there. My guess is we're both pretty savings-averse, but you guys are better with social support than we in the states are. Lucky Canadians, darn it!

Because Canada invests in it's people more then the US. Hopefully that will change for us soon! :

[Azuralea]

Originally Posted by ChetMC

I was under the impression though that most of the economic downturn was the result of the American subprime mortgage situation. What factors outside the US have been significant contributers?

Subprime mortgages are only a relatively small percentage of the bad debt out there these days. It gets the most press, and it's the most visible because people lose their houses, but it's not the majority of the problem, nor was it ever the majority of the problem.

The problem in general is that bad debt--risky loan vehicles repackaged for consumption around the world--is everywhere and worldwide financial systems operated as though there was real money there. Lending standards around the world were substantially loosened for all sorts of loans, not just subprime mortgages. Investors (and countries) with capital loved the loosened standards because they got good returns, so they in turn encouraged the loosening standards.

It never was an only-in-the-U.S. problem in origin, although that's a very popular mantra in countries around the world because it lets their leaders deny any culpability. The origins of the current crisis are in reality very widespread. For instance, there are a lot of risky debt strategies that are currently collapsing or collapsed that are tied to the collapse of the Asian economies in 1997.

Individually, in various countries, the repercussions took different forms, of course. Ireland, for instance, has seen its housing market collapse. Iceland's banking system is collapsing.

Also, velochic is correct regarding the unemployment stats. The problem is much more widespread than unemployment would indicate.

[KatWrangler]

Originally Posted by ChetMC

I was wondering about severance packages. There's been no mention of them at all in the news, but when DH got laid off at AOL the packages were wonderful and people wanted to get a lay off notice. We know people who got what amounted to a year's salary. They were talented people, all found new jobs within a couple months, and had a nice nest egg from AOL.

My husband was layed off Feb 1st, 2008. The severance package was 1/2 month pay. That really sucked when I was 28 weeks pregnant and we have a child with special needs and were losing her health insurance the end of that month.

[A&A]

Originally Posted by bongoblue

We're not still living in the Great Depression.

The unemployment rate in 1929 was just over 3%. They didn't know what they were about to experience, either. (I think 2008 was like 1929 and 2009 is like 1930.)

[Staceyy]

I've had a strange reaction to everything going on. I've been seemingly oblivious to everything going on lately. I was laid off several years ago. One day several weeks ago, I broke down and cried not for myself, but for all the pain everyone else is going through. Now I'm seemingly oblivious again. I think its just too overwhelming for me to dwell on, as I'm helpless as to what I can do for anyone. The only thing I know to do, is to pray.

[Storm Bride]

Originally Posted by kmeyrick

When I lived in Canada I noticed that you guys had some perks we don't have- health care, affordable colleges, etc that explain the discrepancy there. My guess is we're both pretty savings-averse, but you guys are better with social support than we in the states are. Lucky Canadians, darn it!

Yes. If nothing else, we're not going to have too many people racking up credit card debt because it's the only way they can pay their medical bills. (I don't know how common that is down there, as I'd tend to think that the people with no health coverage are often going to be the ones who don't have very much credit available, either. I could be way off base on that, though.) I've known a couple people who have had a lot of trouble paying their medical costs, because there are things that aren't covered...but it's not rampant here.

[sanguine_speed]

In everyday real life I don't think I have that sense of numbness or normalcy about the job loss announcements. I am sad for the families who are affected and I realize the situation could get much worse and negatively affect many more people.

But, in the F&F forums here, I do tend to get that glazed over feeling because every other thread is about doomsday and the next great depression. In general, I try to sort through them based on titles, and visit the threads about pending doom less often.

[Morgana]

DH and I feel pretty safe in our jobs. Our parent company has laid off quite a few people but our departments are actually turning a profit and are staffed very thinly. Our savings is quite good and we have no credit card debt. We started saving like crazy three years ago and we haven't stopped. I have tons of sympathy for people who've fallen on hard times because they got laid off. It's a shame that these companies can make horrible business decisions and it's the average worker who'll pay the price.

However, I don't have any sympathy for people who've fallen on hard times because of their spending habits. I don't have sympathy for people who're losing their homes because they didn't understand the loan they were getting into or because some lender convinced them that they could afford more than they really could. I don't have sympathy for people who spend above their means especially those who continue to do so now that's it's so clear the mess our economy is in. One of DH's employees has an ARM that's going to reset in a year and has know for at least a year that he'll probably lose the house. He has a newborn plus two other kids. All were planned so no surprises. He's known his job is at risk for some time. And still, he went out a bought a motorcycle because it makes him "feel better". Blows my mind how stupid people can be. We have many friends who are in similar positions.