Welcome To Poverty

If you can't read it, the sign says, "will design web pages for food!". Need an employee?

It seems GM will announce today it is going to cut some 500 salaried workers from its workforce. They want to cut 30,000 hourly workers, but this is equally devastating. Hourly workers have mechanical skills that translate to other occupations. Hell, they can go work for arms manufacturers who'll need more help just to keep up with demand.

No, that number of workers is the problem. Can that many be absorbed in the job market? Probably not locally and now you throw families into turmoil and flood the housing market because houses must be sold so the worker can relocate.

On the other hand, salaried people often have impressive, but less transferable skills. I've been there and can tell you corporations view salaried people as dime-a-dozen resources. It is difficult to stand out and impress the HR person in charge of hiring.

Now lets imagine you are in charge of laying off 500 people because your company is nearly tits up. Where would you start? Hmmm. Jack there is green because he's been with you for 5 months, but he's reliable and intelligent. On the other hand Leonard has experience. He's been here 16 years, knows the ropes and efficiently produces. Leonard is also an intelligent guy. Wow! Tough decision. But wait, Jack is paid $14 per hour and Leonard is paid $23 per hour. Hmmm. Toss in the benefits which raise those costs to twice as much and the decision is easy.

This is where everything gets very bad for all laid-off employees. They are probably too old for the job market. The oldest, higher paid workers go first. Age discrimination is unlawful, but there are hundreds of ways to "justify" yourself. I once worked in an organisation that was top heavy on experienced, high paid people so the whole organisation was eliminated because it was no longer needed. I admired the ingenuity of the move, but not the consequences.